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TORONTO, ONTARIO--(Marketwire - Oct. 19, 2012) - For business owners planning to invest more in 2013, hiring employees is a top priority - second only to upgrading and purchasing equipment - according to the Hiring Outlook Report released today by BMO Bank of Montreal. However, businesses that participated in the poll said the number one challenge they face is finding and retaining talented employees.

The Hiring Outlook Report showed:

• 73 per cent of Canadian businesses are confident looking ahead to 2013
• Nearly one-in-four plan to increase the size of their workforce
• Large companies are twice as likely as small businesses to be planning to hire more employees (45 per cent vs. 22 per cent)

The biggest long term and short term challenges businesses face include:

"Over the past year an increasing number of Canadian companies have made strategic investments to upgrade technology and processes, open up new markets, and invest in people," said Steve Murphy, Senior Vice President, BMO Commercial Banking. "As the economy recovers, businesses are looking to become as productive as possible, and that may mean taking advantage of historically low interest rates to finance their growth plans and upgrade their talent pool."

Attracting and Retaining Talent:

• Nearly half of Canadian businesses (47 per cent) say it is now more difficult to attract talented employees than before the economic downturn
• Manufacturers (60 per cent) indicated that hiring talented people has become more difficult, while retailers (58 per cent) responded that retaining talented employees has become harder since the recession
• Alberta businesses are the most likely to say it's difficult to attract talented employees (63 per cent). Businesses on the Prairies and in Alberta are most likely to say retaining employees is the most difficult challenge (51 per cent)

According to BMO Economics, Canadian workers have it relatively good compared to their American and European counterparts, as the Canadian unemployment rate is one-half percentage point lower than the U.S. rate and four percentage points lower than the Eurozone rate. "Canadian job security is fairly good, with our 7.4 per cent unemployment rate below historic norms," said Sal Guatieri, Senior Economist, BMO Economics. "The resource-driven provinces of Alberta and Saskatchewan will continue to offer the best job prospects in 2013, with unemployment rates below five per cent."

Hiring Plans

While 71 per cent of Canadian businesses plan to maintain their current staffing levels next year, almost on-in-four plan to increase their hiring in the year ahead. Only four per cent plan to shed employees.

Compared to 2011, among those companies that plan to invest more in their business in 2013, 48 per cent plan to hire more employees - an increase of nine percentage points from last year.

Intentions to grow the workforce are similar coast-to-coast, but are slightly lower in Quebec where just 17 per cent of businesses plan to hire more employees next year.

The survey also found that small companies are more likely than large companies to be turning to contract employees (small: 24 per cent more, 5 per cent less; large: 20 per cent more, 10 per cent less) for their new hiring, while large companies plan to focus more on hiring for junior positions (small: 20 per cent more; large: 44 per cent more).

The telephone survey was conducted by Pollara Strategic Insights between August 13 and September 5, using a sample of 500 Canadian business owners. Results carry a margin of error of ±4.4 per cent, 19 times out of 20.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at July 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.