Canadian Fast 500 CEOs Have More Optimistic Economic Outlook than North American Peers
Search underway for 2001 Canadian Technology Fast 50 Companies

TORONTO, May 22, 2001 – Many CEOs from Canada’s fastest growing tech companies are contemplating some form of financial market activity compared to their North American peers who are opting to maintain the status quo, according to a survey of CEOs from 2000 Deloitte & Touche Technology Fast 500 companies. More than 200 CEOs from across North America responded to the Fast 500 survey conducted in first quarter 2001.

The Deloitte & Touche Technology Fast 500 CEO survey found that 40% of Canadian respondents plan to acquire another company while one-third expect to proceed with an IPO in the coming year in contrast to North American peers (37%) who plan to stay the course.  While acquisitions figure highly on the minds of North American CEOs, only 10% are looking toward taking their company public this year.

“In these economically uncertain times, CEOs of Canadian fast-growth tech companies are not content to sit idle and are positioning themselves to take advantage of the current market situation,” said Doug McDonald, Partner, Corporate Finance, Deloitte & Touche.  “They are focused on fueling growth by raising capital or getting bigger, and with valuations relatively low, it makes sense for many to take action now.”

Raising Capital Biggest Challenge for Canadian Firms

Despite their plans to make acquisitions or go public, a lack of capital was cited by Canadian respondents (27%) as the biggest obstacle in growing their business and more than one-third (35%) indicated that raising capital is the single biggest challenge in managing their company’s rapid growth.  According to McDonald, “With the state of international markets, Canadian technology companies need to look as enticing as their publicly traded competitors to get access to financing from investors.”

Help Wanted

Although there has been much evidence recently of corporate downsizing, fast-growing companies are in a hiring mood.  A full 63% of the Canadian CEOs surveyed said they planned to add between 25 and 100 employees this year with a further 19% stating they plan to increase staffing by more than 100.  This contrasts to responses from North American peers who indicated one-half (51%) expect to hire between 25-100 employees in the next 12 months, with 30% recruiting less than 25 and 18% hiring more than 100 staff.

“With competition as fierce as it is in most every sector of the economy, if you stay put you’re going to get run over by your competitors – clearly not the case with Canadian tech firms” said Garry Foster, National Director, Technology and Communications, Deloitte & Touche. “They are not resting on their laurels and plan to fuel growth through investment in human capital.”

Qualified Employees Are Hard to Find

While many Canadian respondents forecast significant growth in human resources, nearly one-third cite finding and retaining qualified employees as the single biggest challenge in managing their company’s growth. This is further compounded by three in five Canadian CEOs who stated their geographic market needs an adequate talent pool from which to draw employees.

These figures were echoed among North American peers, with 39% stating that attracting and retaining qualified employees was their single biggest challenge and three-quarters (74%) indicating that geographically, a larger pool of tech talent would ease their growth plans.

What Attracts Employees

How are fast-growing companies attracting and retaining employees?  The vast majority (65%) of Canada’s Fast 500 CEOs stated bonuses, equity sharing and company vacations are the most effective in enticing new hires.  Smaller numbers of those surveyed noted that perks like complimentary health club memberships and on-site fitness facilities are also effective.

“In a market of economic uncertainty and seemingly worthless stock options, companies have to be even more creative in offering perks that will make their best employees want to stay on board,” said Foster.  “Technology firms today have to think outside the box to entice people who, 12 months ago, may have come on board for options alone.”

Canadian Firms Global Thinkers

Canada’s fast growth companies also have broader horizons when it comes to targeting growth internationally.  While Canadian CEOs continue to focus on North America as their primary market (28%), many recognize great opportunity exists outside the U.S.  Geographic markets they identified as the ones to watch in the next five years are Western Europe (20%) followed by Central and South America (16%), China (16%) and the Pacific Rim countries (16%).

“Canada’s technology industry continues to deliver phenomenal growth rates creating more opportunities to be a dominant force in global markets,” says Foster.  “Last year, 46 of the Canadian Technology Fast 50 recipients earned a place on the 2000 Technology Fast 500.”

About the Technology Fast 500 CEO Survey and Program

Findings resulted from a survey conducted by Deloitte & Touche of CEOs at companies listed on the 2000 Deloitte & Touche Technology Fast 500, a ranking of the fastest-growing technology companies in North America as determined by percentage revenue growth over five years (1995-1999).

Canadian technology companies are invited to enter the 2001 Deloitte & Touche Canadian Technology Fast 50 program. The nominations deadline for the 2001 Deloitte & Touche Canadian Technology Fast 50 program is June 22, 2001.  Entry criteria and nomination forms are available online at www.fast50.ca.

The 2001 Deloitte & Touche Canadian Technology Fast 50 will be announced at a Gala on September 20, 2001. All recipients of the 2001 Deloitte & Touche Canadian Technology Fast 50 will be automatically eligible for the 2001 Deloitte & Touche Technology Fast 500, the results of which will be announced in November 2001. The fastest growing technology companies will be identified based on their percentage growth in revenues over a five-year period (1996 – 2000).

Deloitte & Touche is one of Canada's leading professional services firms, providing a full range of assurance and advisory, tax, and management consulting services through 5,400 people in more than 44 locations across the country. Our firm's professionals have been developing effective business solutions for Canadian and international companies for more than 150 years. We are dedicated to helping our clients and our people excel, and have been recognized as one of the 35 best companies to work for by the Globe and Mail's Report on Business magazine. Deloitte & Touche is part of Deloitte Touche Tohmatsu, a global leader in professional services with more than 92,000 people in over 130 countries.

For more information: