Productivity remains one of the biggest challenges for Canadian businesses. The higher the cost of producing goods or services, the harder it is to compete. That affects profits, wages and growth.
The discussion around low productivity often focuses on tools, automation and digital upgrades. Those are important. But for small businesses and entrepreneurs, one of the biggest levers for improving productivity isn’t found in software or equipment. It’s in how people are hired, managed and supported.
The everyday staffing decisions business owners make have a direct effect on productivity. Even small choices around hiring or training can have a big impact on performance.
Here are four common ways small businesses may be limiting productivity—and what they can do differently.
1) Hiring whoever’s available instead of the best person
In lean operations, hiring often happens under pressure. Someone leaves, and the first qualified person is hired just to keep things running. But quick hires can weigh down the team if the person lacks key skills or motivation.
Many small businesses also hire from within their own network. While familiar, this limits options. With remote work now widely accepted, the best person for your team may be in another city or province.
Hiring someone who can contribute right away is one of the fastest ways to boost productivity. Take time to clarify what you really need and cast a wide net. The difference between “good enough” and excellent can mean hundreds of productive hours each year.
2) Relying too heavily on generalists
In small businesses, people often wear many hats—sales, marketing, admin, even human resources (HR). This flexibility can work at first, but it becomes a problem as you grow.
Some roles require real expertise. Marketing, bookkeeping, IT and HR are skillsets developed over time. Putting a generalist in a specialist role may seem cost-effective, but it often leads to mistakes, inefficiencies and missed opportunities.
As your business grows, decide which roles require trained professionals. This might mean hiring part-time contractors, outsourcing or investing in training. A versatile generalist can still play a key role, with the right support.
3) Putting people into roles they’re not ready for
Promoting a loyal employee into a new role can feel like the right thing to do. But being a strong team member doesn’t always mean someone is ready to lead.
Without preparation, people can struggle to make decisions or manage others. That slows down operations and can frustrate the team.
If you see leadership potential, start by giving that person small projects to lead or a chance to shadow a manager. Mentorship and training go a long way. Growth takes time: pushing someone too quickly can hurt both the employee and the business.
4) Moving people between roles too quickly
Some owners rotate staff often, thinking it will help them grow. It might—in training environments. But in a small business, where consistency matters, frequent job changes can break momentum.
It usually takes more than a year to fully understand a role and make lasting improvements. When people move on too fast, they don’t get to see the impact of their work. New hires are left starting from scratch, which slows things down.
Instead, let people dig deeper into their current role. Ask what they would improve if they stayed another year. Give them ownership over long-term projects and let them build real mastery, not just experience.
Other productivity killers to watch for
- Not providing feedback: People can’t improve if they don’t know what needs work. Even strong performers need regular, constructive feedback.
- Unclear roles: When expectations aren’t clear, people either overextend or underperform. Defined roles reduce friction and save time.
- Underused tools: Platforms like Slack, Teams or Asana only boost productivity if everyone is trained and using them effectively.
The bottom line: Canada’s productivity problem won’t be solved with software alone. For entrepreneurs, real gains often come from making better decisions about people—who you hire, how you support them and how long you let them grow.
Build a team that’s well matched to their roles, motivated and given room to improve. That’s when productivity becomes a natural outcome of good leadership—not just better tools.
Smarter people decisions aren’t just good for productivity. They’re good for business.
Rebecca Schalm, PhD, is founder and CEO of Strategic Talent Advisors Inc., a consultancy that provides organizations with advice and talent management solutions.
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