Leveraging talent effectively and investing in the right technology are top priorities in professional services—but pose unique challenges in engineering.
As sector leaders take stock of a challenging year and look ahead to 2026, cautious optimism is no longer a viable strategy to address these issues.
With the pace of change accelerating across industries, Canadian engineering firms need a commensurate sense of urgency to thoughtfully address labour issues and the proliferation of advanced technologies like artificial intelligence.
Maximizing technological investment
Integrating new technology like AI systems can be a boon to engineering firms—and the broader professional services industry—at a time of declining productivity.
Adopting these solutions can also help firms avoid paying steep premiums for talent—a practice that is both an advantage and a risk amid inflation and competition.
With the increased capabilities of personal productivity tools and generative AI, firms are excited to embrace these leaps in innovation—but are slow to tap into their broader benefits.
One potentially limiting factor is how firms structure and store their data. In many instances, data resides in disparate systems built over time in varying structures and locations, impeding an AI system’s ability to ingest and analyze it.
Compounding this issue is the reluctance of some leaders to fully embrace new technologies. According to Pew Research, employees over 50 years of age—many of whom hold leadership positions—are less likely to use AI in their jobs or be enthusiastic about its potential.
To get the most value out of technological investments, firms should start small and scale up. Creating a digital roadmap is essential to clearly define current IT and data processes, governance, and challenges; technology goals and strategic leverage points; and key milestones in achieving desired outcomes.
Other strategies to consider include:
- Using data-driven decision-making to overhaul firm priorities, communicated through AI agents and dashboards
- Defining a firm’s strategic priorities based on track record and team expertise
- Redirecting resources towards areas of the firm with the greatest potential for success in an effort to curb the decline in productivity
- Using data that uncovers historically weak areas to guide hiring and upskilling, refine market offerings and target services for expansion
Recent data from the Association of Consulting Engineering Companies (ACEC) suggests that larger firms—those with more than 500 employees—are gaining efficiencies from digital solutions designed to augment labour amid staffing challenges across the engineering sector.
This sets the stage for firms embracing AI adoption to gain a competitive edge over those lagging behind. While larger firms typically have more resources to upskill employees, handle change management (either internally or supported by an external advisor ) and implement sophisticated technology stacks, small and medium-sized firms can still be part of the digital conversation by employing an appropriately scaled strategy.
For these businesses, it’s about identifying the right opportunity and setting a clear objective—whether that is improving efficiency, optimizing internal processes or providing enhanced services. Maintaining a vision of what the selected technology intends to achieve can help firms stay rooted and act as a solid starting point for future development while remaining cognizant of limitations.
Incentivizing and supporting talent
A comprehensive digital strategy is key in addressing labour challenges, but additional measures are essential to tackle this complex issue.
Canadian engineering firms paid an average annual salary of $104,000 in 2024, according to the ACEC—approximately $37,000 more than the national average for all jobs. The data reflects a highly competitive environment in which firms are struggling with labour scarcity; meanwhile, external factors like inflation risks and cost of living increases could ultimately push payroll adjustments to unsustainable heights.
Engineering leaders must think creatively to keep current staff motivated and satisfied while appealing to new professionals entering the sector.
Maximizing non-financial compensation is worth considering when further pay increases are not viable. Non-financial benefits are less tangible but can be effective tools for hiring and retention, and firms can take concrete steps to offer them within the constraints of available capital.
Investing in an encouraging, supportive work environment is imperative; when professionals work in a setting that aligns with their personal values, nurtures their ambitions and makes them feel like their contributions matter, they are more likely to stick around.
Firms that are open to novel ideas and solutions will attract and retain more engaged talent—including new grads who trained on AI tools and are looking to utilize those skills.
A creative approach to connecting teams is key in ensuring staff feel motivated and supported. This includes balancing the benefits of in-person collaboration with the efficiency of self-managed remote environments, establishing collaborative shared spaces, and holding meetings only when there is a clear purpose.
Another strategy is to make the most of the different skill sets within the firm by cultivating skill-sharing opportunities. Newer employees exposed to AI tools in college may have valuable digital skills to share, while established professionals and owners may have acquired soft skills and industry relationships that new grads value highly. Cross-mentorship roles in which leaders can share their expertise and help prepare others for higher-level opportunities can revitalize a firm’s culture.
