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Let’s Talk: The top challenges facing small and medium businesses in 2023

From economic uncertainty and shifting market conditions to access to financing and talent acquisition and retention, businesses face a range of challenges as they navigate an unpredictable future.

Small and medium businesses (SMBs) continue to face the aftermath of the COVID-19 pandemic, including economic downturns and increased uncertainty. 

In addition, they must adapt to changing consumer behaviour and preferences and shifts in the competitive landscape to remain competitive in 2023. 

Technology can also pose opportunities and challenges for SMBs, as they may need to invest in new technology to stay competitive but also face the challenge of keeping up with technological change and adapting their business models.

In this week’s edition of Let’s Talk, our experts delve into the challenges facing small and medium businesses in 2023.

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Dr Richard George, VP Workforce Skills, Pearson

Richard George
Dr Richard George, VP Workforce Skills, Pearson

“Skills have been at the heart of business conversations this year, with heightened discussions around SMB’s struggle to recruit and retain tech talent as the tech skills gap is deepening.

“While tech skills are absolutely a priority Australian organisations should focus on solving in the new year, employers should also not forget to focus on the much more human skills that will more than ever be needed as our society continues to digitise.

“We just released new research that shows that job ads in 2022 were dominated by human skills. Our AI-based modelling suggests that looking ahead to 2026 the skills that will be most in-demand to meet economic needs are also human skills.

“Communication, attention to detail, leadership, teamwork, cultural and social intelligence – these skills aren’t replaceable by technology and are very much needed, but they also have to be applied to a much more tech-driven world.

“The challenge for Australian SMBs will be to find the right balance between tech skills and soft skills, and build learning and development programs that include both in order to empower workers with skills that are fit for purpose today, and ensure they are resilient for the year and decade ahead.”

Jacqueline Jayne, Security Awareness Advocate APAC, KnowBe4

Jacqueline Jayne
Jacqueline Jayne, Security Awareness Advocate APAC, KnowBe4

“An important consideration for 2023 is that small businesses are not immune from cyber threats. Cyber criminals are targeting every single organisation in Australia, every day with the goal to ‘breach the system’ and steal your data, intellectual property, customer data, personal data, deploy ransomware and more.

“As the large-scale hacks in Australia this year have shown, we can no longer rely on government or technology when it comes to combating or avoiding personal or organisational cyber incidents.

“Small businesses may think that criminals will focus on the larger targets such as Medibank or Optus, but small businesses often require less time and resources from the cybercriminals, so they’re seen as ‘low hanging fruit’.  In 2023 we will continue to see human error as the main attack vector for cybercriminals across all organisations including small to medium businesses, which is why it’s so important for small businesses to provide security awareness training and nurture a strong security culture among staff.”

Robert Le Busque, Regional Vice President of Asia Pacific, Verizon Business Group

Robert Le Busque
Robert Le Busque, Regional Vice President of Asia Pacific, Verizon Business Group

“There are two challenges facing small and medium businesses (SMBs) moving into 2023. The first is increasing costs of doing ‘business-as-usual’ which is burning budgets and leaving little room for innovation. The second is addressing the threat landscape while complying with tighter cybersecurity regulations. In a nutshell, scale, agility, and confidence in data will all be required over the next few years for businesses to make strong decisions.

“For all their variety, SMBs share some things in common – they are heavily dependent on technology, yet they don’t necessarily have the resources or expertise necessary to set up, run or maintain the IT infrastructure to run their businesses. This also partly explains why SMBs are potentially a more attractive target for cyber criminals. Facing budget pressures may incline some businesses to take an expedient approach by continuing to use aging or end-of-life hardware or software that is most likely less productive and less secure.

“As business and technology needs inevitably change over time, likewise technology infrastructure needs to be able to do the same. This means looking for flexible platforms and services that can grow (or scale down) as requirements dictate, without requiring SMBs to buy resources they don’t yet need or unnecessarily limit future flexibility.”

Chris McDonald, VP of Growth, Cloudstaff

Chris McDonald
Chris McDonald, VP of Growth, Cloudstaff

“All indications are that 2023 is shaping up to be a tough year. But for those small and medium businesses that can put their foot on the accelerator rather than the brake, 2023 could be the year to increase market share and turbocharge their growth.

“The twin challenges they need to navigate are: the global skills shortage and rising costs. While companies of all sizes are facing these issues, smaller companies are being hit hardest. They simply can’t compete with larger companies in trying to attract and retain talent without getting into a spiral of damaging wage inflation. As a result, Australia’s SMEs need to think more creatively to ensure they have access to the skills at a price they can afford.

“Recent research by Cloudstaff shows that, as 76% of Australian businesses admit that finding skilled staff is the single biggest issue facing their business, almost half (48%) are considering hiring offshore.

“I witnessed this first hand at a recent meet up for Australia’s fastest growing small and medium companies. Three quarters of the business owners  I spoke to were already using offshoring to underpin their phenomenal rates of growth. They realise it’s time to think beyond borders and look to the new global workforce for the cost-effective talent needed to drive their business forward.”

Marcus Marchant, CEO Australia and New Zealand, Vista

Marcus Marchant
Marcus Marchant, CEO Australia and New Zealand, Vista

“Vista recently conducted a survey to understand the sentiment of small business owners and found that the majority are mainly concerned about the economic landscape, namely rising inflation (86%), threat of recession (79%) and energy costs (79%). Despite being at the coalface of these issues, SBOs are powering ahead, with customer acquisition being their number one focus in 2023. This is important because typically what we see in small business is a high number of repeat buyers – the challenge in 2023 for SBOs will be attracting those customers, in a sea of competition. With social media and a 24-hour digital news cycle, consumers are exposed to new brands every-day, and in the current economic climate, consumers don’t have the funds to spend on every single brand that they like. This means that SBOs have to work harder to stand out. There is a good reason that companies that continue to invest in marketing, even in a recession, maintain growth on the other side. SBOs would do well to evaluate their public facing identity and take measures towards a slicker and more targeted approach if they want to convert the right type of loyal customer to their business.”

Nate Hartley, CFO, Crowdz

Nate Hartley
Nate Hartley, CFO, Crowdz

Although the recent economic figures and news cycles indicate some moderation of increasing costs of living and operations, inflation targets haven’t been hit just yet and will continue to increase the cost of inputs and raw materials for businesses. At the same time, borrowing costs, driven by rate increases by the RBA in Australia and the FED in the US, will continue to rise, meaning accessing finance will continue to be difficult and expensive for small and medium businesses. Furthermore, low unemployment rates will continue to put upward pressure on wages, as staff look to align their income to meet the rising cost of living. Businesses will need to continue to focus on optimising their bottom line, as well as looking at affordable alternative funding options that allow them the grow sustainably.”

Fiona Marshall, Director, Cario

Fiona Marshall
Fiona Marshall, Director, Cario

“Businesses are facing numerous challenges in a changing landscape. These include escalating freight costs, increased business to consumer (B2C) delivery expectations, and labour shortages:

  • Freight costs have increased significantly, partly driven by the war in Ukraine and the impact that has had on fuel prices. This is causing margin erosion for many businesses and forcing them to review their freight arrangements to see if they are still fit for purpose.
  • We are seeing businesses having to manage an increasing B2C delivery model, and the customer expectations that come with this. These consumers are used to watching their burger delivery in real time, on a phone, so they expect a similar service for their freight.
  • Finally, the labour shortages we are seeing around the country are forcing many businesses to look at how they can automate their operations through technology rather than people. Smart technology systems are allowing businesses to take back some control over their costs and operations, in a changing world.”

Jonathan Jackson, APJ Director of Engineering, BlackBerry

Jonathan Jackson, APJ Director of Engineering, BlackBerry

“Cybersecurity will no doubt be top of mind for businesses in 2023, with recent geopolitical events and changes to workplace norms seeing an explosion in the number and type of cyberattacks.  Unfortunately, attacks are becoming more organised and targeted as nation-states increasingly collaborate with financially motivated cybercriminals.

“This is an even greater challenge for cost-conscious, resource-strapped small and medium businesses (SMBs) especially as new tactics are continually designed to evade detection. BlackBerry’s 2022 Threat Report found that SMBs suffered about 13 threats per device, far more than larger enterprises. Ransomware, software supply chain, Highly Evasive AdaptiveThreats (HEAT), and Business Email Compromise (BEC) tactics are on the rise, further increasing cyber and business risk in the coming year.

“Businesses are also tackling skills challenges, with AustCyber forecasting a shortage of 3,000 cybersecurity workers in Australia by 2026. However, solutions that enable SMBs to outsource the right human expertise, gain access to the latest threat intel and predictive AI tools that stop attacks before they execute makes cybersecurity investment a less daunting prospect. For example, an Extended Detection and Response (XDR) service offers SMBs enterprise-grade skills and protection at a fraction of the cost – less than a cup of coffee per month per user, in fact.”

Mike Sentonas, Chief Technology Officer, CrowdStrike

Mike Sentonas
Mike Sentonas, Chief Technology Officer, CrowdStrike

“In 2023, we will see even more high-profile cyber incidents. In the current, rapidly changing economic and geopolitical climate, small and medium businesses are under increased pressure to do more with less, securing their business with potentially fewer resources against the ever-increasing volume and severity of cyber-attacks. A high-profile cyber-attack will have even greater consequences, as one major data breach can potentially cripple an entire business when organisations cannot afford any downtime. Cybersecurity incidents are expensive, including the cost of cleaning up after a breach, paying for incident response and forensic investigations, legal costs, changing security providers, through to notifying customers and regulators. Proactive cybersecurity including keeping on top of security hygiene, engaging threat hunting and threat intelligence will be key to not only stopping but preventing breaches before they occur.”

Lindsay Brown, VP of APJ, GoTo

Lindsay Brown, VP of APJ, GoTo

“Continued economic uncertainty has led to a series of supply chain disruptions and labour shortages, spiking the cost of living and disturbing the economy. This has had a significant impact on the way we work. A recent survey by GoTo and OnePoll found 79 per cent of Australian business owners believe a recession will occur in the next 6 months. For small and medium-sized businesses, the biggest challenge will be navigating the upcoming economic downturn.

“To prepare for this challenge, GoTo’s survey found businesses are taking actions such as creating business continuity plans (47%), having a product that is cost-effective to produce (46%) and improving employee morale (46%) to prepare for economic uncertainty. To add further stability, SMBs can look to save 3 months’ worth of profits as an emergency buffer, diversify business cash flow and consolidate their technology stack. Preparing now will help SMBs navigate through this great challenge in 2023.”

Troy Sellers, Solutions Architect Lead APAC, Aiven

Troy Sellers
Troy Sellers, Solutions Architect Lead APAC, Aiven

“The accelerated digitalisation seen across Australia and New Zealand during COVID-19 will continue at pace for businesses.

“However, I expect increased friction as businesses balance the need to push forward with digitalisation efforts while managing talent shortages and the anticipated economic downturn.

“One of the biggest challenges businesses will be faced with is the challenge of stretching IT dollars further, balancing ongoing digital growth while also reducing spend.

“I believe that, if not already doing so, many small to medium-sized enterprises will begin to look to outsourcing IT services as the norm as a result of the growing cost pressure and the continuous talent skills shortage.”

Suzette Bailey, CEO and Co-Founder, reKnow

Suzette Bailey
Suzette Bailey, CEO and Co-Founder, reKnow

“In the post-pandemic world, SMBs will need to be agile and forward-thinking to survive and grow.

“One of the biggest challenges for SMBs is digital transformation. SMBs need to stay ahead of the curve to stay competitive and relevant. This includes investing in digital tools, such as customer relationship management (CRM) systems, marketing automation platforms and artificial intelligence, to help streamline their operations.

“Another challenge is access to capital. With inflation skyrocketing and international uncertainty, SMBs are struggling to access the financing they need to remain competitive and grow. In addition, SMBs need to be able to access the right talent to help take their business to the next level. This is an ongoing challenge in a tight labour market.

“Lastly, businesses need to stay on top of customer trends and make sure their products and services are meeting customer needs. With online still growing, customer expectations have changed and SMBs must continue to adapt quickly to stay ahead of the competition.

“In summary, SMBs need to find more cost-effective ways to stay competitive, access capital, stay up-to-date with customer trends, and invest in technology to ensure they are prepared for the challenges of 2023.”

Pete Murray, Managing Director ANZ, Veritas Technologies

Pete Murray
Pete Murray, Managing Director ANZ, Veritas Technologies

“Following many high-profile cyber-attacks that hit Australian organisations in 2022, SMEs must place a higher priority on IT security in the new year. In fact, it was recently revealed that the average cost per cybercrime increased 14%between 2021 and 2022, with medium-sized businesses reporting the highest average loss at $88,000.

“Three challenges we see being front of mind for SMEs in 2023 are:

  1. Higher cloud storage costs
    Having relied on cloud services due to the pandemic, many businesses are now finding that their data volumes and cost overruns are ballooning out of control. If left unaddressed, businesses will pay high prices for storing data they’re no longer using and should have archived.
  2. Rising cyber-attacks
    The scale of recent cyber-attacks has intensified, with criminals not only encrypting data but also threatening to leak or sell it, to demand ransom payments. As immediate threats are identified and managed, attention must turn to bolstering and fortifying SMEs to thrive long-term – moving from reactive to resilient.
  3. Ongoing talent squeeze
    Just 43% of Australian leaders believe their teams have the skills to protect organisations from cyber threats. Leaders must be smart if they want effective protection infrastructures against the increasing threat of ransomware.

“It’s critical SMEs train existing employees to be vigilant and avoid leaving businesses open to attack.”

Jamie MacLennan, Senior VP and Managing Director of Asia-Pacific, LifeWorks

Jamie MacLennan, Senior VP and Managing Director of Asia-Pacific, LifeWorks

“One of the biggest challenges for SMEs next year will be ensuring they comply with new legislation that expands employers’ responsibilities over employees’ mental health. Businesses need to be aware of new codes from NSW Safe Work Australia which have expanded an employers’ responsibilities over their employees’ mental health – but now also apply financial penalties. This legislation, and penalties, will likely be copied by other States. Businesses must prevent and manage psychosocial hazards, such as work overload or underload, lack of control or support, bullying and harassment.

“SMEs can find relevant support online or seek guidance from EAP (Employee Assistance Program) providers to understand how to comply and which tools to use.

“LifeWorks’ latest Mental Health Index revealed more than half of Australian employees (53%) believe stress is the main reason for their declining mental health, with inflation, the pandemic and job loss contributing to the problems. With the pandemic’s effects and rising inflation set to continue in 2023, SMEs will need to proactively manage this issue to avoid negative consequences for their business and employees.”

David New, Head of APAC, Ignition

David New
David New, Head of APAC, Ignition

“The impact of higher inflation and rising cost of living is one of the biggest challenges for small businesses over the next 12 months. Many small businesses are at greater risk of cash flow issues than big businesses as they tend to have lower cash buffers and tighter profit margins to absorb increases in expenses and operations.

“Late payments continue to exacerbate this challenge. The latest report card from the Payment Times Reporting Regulator found more than half of big businesses in Australia missed their own deadlines for paying their small business suppliers. Ignition’s state of client engagement research also found that 95% of accountants and bookkeepers in Australia experience chasing for late payments, with client invoices on average 31 days overdue.

“Maintaining a steady flow of cash is crucial for growth and resilience. For small businesses living on the margin, technology can help to analyse and forecast cash flow and automate payment collection including accounts receivable. For professional services firms in particular, errors in proposals, scope creep and late payments can lead to potential cash flow pressures and profitability issues if left unaddressed. Technology can help to drive greater efficiencies in client engagement and payments processes to improve productivity and cash flow.”

Elise Balsillie, Head of Thryv Australia

Elise Balsillie
Elise Balsillie, Head of Thryv Australia

“In 2023, it will be important for small and medium businesses to differentiate and stand out from competitors, as well as keep up with everyday challenges such as inflation, labour shortages and consumer expectations.

“Inflation is a national issue and consumers are going to be more conscious of where every single dollar is going.

“Labour shortages will continue so businesses will need to be more creative in overcoming these. Technology can cut down labour time or automate manual and repetitive tasks will be key.

“Differentiation will be imperative for businesses. Don’t compete on price. That’s a race to the bottom. The most reliable and cost-affordable place to compete is providing an exceptional customer experience that no one else offers.

“To that end, in 2023, customers will want an enhanced customer experience with convenience and technology playing a pivotal role. To support small businesses with convenience, small business owners can consider flexible payment options and digital accessibility.

“And finally, there is a growing trend that customers are increasingly choosing businesses that support environmental and sustainable values. Having a product or service that make a valuable contribution to the planet will continue to drive purchase.”

Matthew Thomson, Senior Vice President, Kofax

Matthew Thomson
Matthew Thomson, Senior Vice President, Kofax

“The single biggest challenge for small and medium size businesses is being paid on time.

“Most SMEs fail due to cash flow issues and late payment of invoices. The consequences can be devastating for both parties and there are no winners.

“In 2021, the Australian government committed to helping Australian small businesses receive payments on time with the roll out of the Payment Times Reporting Scheme whereby large business and government enterprises, with a revenue more than $100 million, must report all small business payment terms and times publicly.

“Whether businesses are small, medium, or large, all require payment being made on time to keep cash flowing through the economy.  Accounts payable solutions let you automate how you capture invoice data, code and verify invoices before authorising payments directly through your accounting system. This ensures businesses comply with the Payment Times Reporting Scheme and helps Australian small businesses receive on-time payment.

“With a portfolio of automated systems, Kofax can help you calculate and assist you in implementing a straightforward automated system to save you time and money and make sure reporting obligations are met.”

Damien Andreasen, ANZ Head of Region, HiBob

Damien Andreasen, ANZ Head of Region, HiBob

“With a recession on the horizon, maintaining capital and optimising revenue will be a key focus for all organisations in 2023. For small and medium businesses, leaders need to have clearly-defined plans to ensure employees feel involved and supported. In doing so, they will retain the best talent in preparation for when the economy opens up again.

“HR will play a pivotal role not only in reassuring employees during this period of uncertainty, and mitigating the impact of change on their work and well-being but also help businesses plan for current and future workforce needs. According to HiBob’s latest research, almost half of young tech workers working in mid-sized organisations and small organisations are retaliating against employers who do not offer clear career paths causing them to rethink their professional development plans and tenure. Organisations can support their employees by training and upskilling managers to equip them with the right skills to navigate and counsel junior employees through challenging market conditions.

“In addition, organisations should prioritise people-first initiatives to drive an exceptional company culture where employees feel valued. This translates to higher employee engagement, satisfaction and efficiency, and will ultimately help small and medium businesses to stay ahead of the curve.”

Gemma Manning, Founder and Group CEO, Manning and Co Group

Gemma Manning
Gemma Manning, Founder and Group CEO, Manning and Co Group

“While we continue to pull through unprecedented times, SMBs are not out of the fire yet. Some things will settle in 2023, but some big challenges remain for SMBs in the year ahead. The three biggest hurdles will be: the war for talent, remote working, and rising costs.

“The war for talent is undoubtedly the greatest pain point for businesses today. Put simply, it is hard to find good people. No matter what industry or business size, business owners struggle to find and retain people, with expectations between employees and business owners often not aligned. That leads to the next issue: remote working. In Australia, unlike in Southeast Asia, people are pushing back on the return to the office. Flexibility has become a bargaining chip, and if businesses aren’t prepared to compromise, securing the right talent becomes even harder. However, navigating remote working can be difficult for small businesses that might not have the infrastructure or set-up to make it work. Finally, rising costs continue to put a strain on SMBs. Many businesses can no longer absorb these increased costs and will need to pass them on to customers if they haven’t already.”

Walter Scremin, CEO, Ontime Delivery Solutions

Walter Scremin, CEO, Ontime Delivery Solutions

“The biggest business challenges in 2023 include the urgency to control costs in a high inflation/high interest rate environment, to get balance sheets under control and protect profitability – not to mention potential supply chain issues and ongoing staff shortages.

“The solutions to these challenges will vary from business to business, but there’s never been a better time to assess business expenditure and look for areas which can become more efficient. Outsourcing non-core business activity to specialists and employing the right technology can make a huge difference.

“Outsourcing to the right partners can make high cost business activities, such as delivery transport, function more smoothly while taking liabilities off your balance sheet. It makes fixed costs more flexible, and solves headaches such as managing staff absenteeism.

“The challenge in uncertain times is to become more adaptable and efficient. Aside from clever partnerships with quality suppliers, SMBs should be looking at ways in which technology can improve transparency and efficiency – for example, in transport, telematics technology is proven at driving efficiency.”

Nathan Reichstein, Chairman of the Business Advisory Committee, Moore Australia

Nathan Reichstein
Nathan Reichstein, Chairman of the Business Advisory Committee, Moore Australia

“The state of the economy will continue to present challenges for small and medium businesses. Higher interest rates will continue to bite businesses who rely on external financing and the recent figures around CPI and wage growth will mean business owners will be having interesting conversations with their employees around pay rises when it’s time for year-end reviews.

“There are a lot of changes on the tax front as well with the Australian Taxation Office (ATO) continuing their focus on professional firm profits (relevant for lawyers, doctors, engineers etc.) and family trust distributions. The ATO have also ramped up their debt collection activities and this will continue in the new year. We have also seen an the increase in audit activity around employer obligations such as superannuation guarantee. Staying on top of cash flow is always a challenge but it’s absolutely critical and if you aren’t meeting your employee obligations, the ATO may be able to go after the personal assets of business owners so it is very important to get timely advice if you start falling behind your payments.”

Blessing Diana Chabvamurambo, Founder and CEO, My Startup Coach

Blessing Diana Chabvamurambo
Blessing Diana Chabvamurambo, Founder and CEO, My Startup Coach

“The struggles that small and medium businesses may encounter in 2023 are hard to forecast, as a business landscape  can change swiftly depending on the host of factors. However, some potential challenges that small and medium businesses may face in the coming year include economic uncertainty, access to capital, and decrease in revenue.

“Economic uncertainty is going to be the primary obstacle. The rise of interest rates, inflation and cost of living will have the most significant impact on the business and trade industry.

“Inflation will reduce the purchasing power of the income, savings, and cash flow of a business, making it more difficult to purchase goods and services and invest in the company.

“Consumer spending will decrease with inflation, leading to diminished purchasing power and the decreased ability to purchase products and invest in the business. Changes in consumer demand and investor behavior may also be expected, which can lead to fluctuations in revenue and business development for small businesses.. This will make it significantly more challenging for the company to generate a steady cash flow.”

Damon Pal, Head of Asia Pacific, HireVue

Damon Pal
Damon Pal, Head of Asia Pacific, HireVue

“Disproportionately impacted by pandemic restrictions and inflation in the last year, SMBs are up against yet another major challenge in 2023 – a tightening labour market.

“But with the unemployment rate sitting at just 3.4%, businesses of all sizes will have to change the way they interact with prospective employees to ensure they attract the best talent. Today’s candidates expect more than ever before – better communication, a faster interview process, flexibility, and an easy hiring journey – and the businesses that meet these needs first will reap the highest rewards.

“One foolproof way to cast your candidate net more broadly is to offer on-demand interviews. Not only does it allow your business to reach working parents, carers or shift workers who are typically unable to interview within traditional working hours, but extending the same interview format to each candidate also drastically reduces implicit biases often found in in-person interviews.

“By broadening your candidate pool and removing bias from the hiring process, you’ll be well on your way to overcoming one of the tightest labour markets in decades, for good.”

Renya Xydis, Co-Founder and Owner, Valonz

Renya Xydis
Renya Xydis, Co-Founder and Owner, Valonz

“The biggest challenge for small to medium sized businesses now and I believe it will continue to be an obstacle in 2023 is staff shortages. It’s across a range of industries but the creative industries and trade industries are still struggling. This was an issue before the pandemic, when we saw a decline in the uptake of trades as degrees but has become a lasting issue and will hang around for a while. This year I want to see a shift towards the perspective of what specific industries need and I want to see action from our government. But till then, my advice to small-scale businesses is to rely on your direct and indirect circle of client, friends, and relations. Word of mouth and being fiercely pro-active with your hiring process can have a positive impact. Your next hire is most probably sitting right under your nose, you just need to look for it, or in most cases ask for it.”

Umesh Banga, Senior Director, Go-to-Market, Asia Pacific, Practifi

Umesh Banga, Senior Director, Go-to-Market, Asia Pacific, Practifi

“As we’ve seen with recent attacks on Optus and Medicare, cyberattacks can occur in a myriad of different ways, and they are increasing in frequency. Cyber security must be made a priority, especially with business being conducted on digital platforms in all sectors. The best analogy would be to think of cyber security like locking the door when you leave the office, or not sharing trade secrets with your competitors.

“Cyber security is a growing priority for small businesses, which makes developing a culture around cyber security increasingly important, particularly when it comes to keeping pace with latest changes in compliance regulation and keeping your customer data secure. This challenge around compliance will be a growing strategic priority for small businesses in 2023. By developing a workplace culture around this, the idea is to boost the security of the environment you work in and encourage people around you to become cyber aware too.

“Small businesses are often run on tight margins, meaning a significant challenge will be to keep operational overheads to a minimum and streamline efficiencies in the new year. As a small to medium enterprise continues to grow, there are significant advantages it can realise from scale but keeping a close eye on operating cashflow will remain a challenge in a rising interest rate environment.”

Nick Hudson, CEO, The Push-Up Challenge

Nick Hudson
Nick Hudson, CEO, The Push-Up Challenge

“Attracting and retaining good quality staff is likely to continue to be a challenge in the new year. For many, 2022 was the year to find a semblance of normality post-COVID. But people need purpose, and as we pass through the holiday period people are likely to get itchy feet as they enter the new working year. Businesses that can offer flexible working models, with enough creativity, purpose and remuneration, will win the talent war in 2023.”

Sarah Spence, Founder and Strategic Director, Content Copywriting

Sarah Spence
Sarah Spence, Founder and Strategic Director, Content Copywriting

“The biggest challenge for SMBs in 2023 will be building people focused cultures, places where people feel valued and want to do their best work. In a highly competitive employment market, SMBs need to take a fresh approach to how they align people with their internal business values, and build connectivity and shared goals, especially when teams aren’t office-centric. We’ve built a fully remote team of 15, and have been very mindful of creating a supportive and connected workplace. We’ve done this through things like quarterly team meetings (and flying people in for them from around the country), and quarterly self-care days, which we take as a company, so there’s no pressure or expectation to check on work on  those days. A culture of open and honest communication has also been hugely important. We genuinely want people to bring their authentic selves to work, and our business benefits from this approach. As the founder, I try to lead by example, and share openly about who I am, both inside and outside of work.”

Shannon Karaka, Head of Expansion ANZ, Deel

Shannon Karaka
Shannon Karaka, Head of Expansion ANZ, Deel

“A major challenge that has persisted for many businesses is finding and retaining top quality talent. The number one challenge for CEOs in 2022 was ‘talent acquisition, retention and re/upskilling to meet a more digitised future’ (KPMG CEO survey), and this challenge is predicted to continue into the new year, especially in tech roles.

“To bridge the skills gap, many businesses have found success by adopting a global approach to hiring. In fact, Deel’s H2 Global Hiring Report found Australia is the APAC country with the most organisations hiring overseas remote workers. This approach empowers business leaders to access top quality talent, no matter where they are based, and employ them immediately. It also offers other advantages, like being able to deploy staff into strategic growth regions, provide round-the-clock support to global customers and give employees the flexibility to work where they please (aka the rise of ‘the digital nomad’ trend).”

Julian Stevenson, Product and Workforce Development Director, RMIT Online

Julian Stevenson
Julian Stevenson, Product and Workforce Development Director, RMIT Online

“With low unemployment and workers having the upper hand in hiring negotiations, SMBs will continue to be challenged by Australia’s talent shortage in 2023. The challenge for SMBs in 2023 will be to prioritise strengthening their employer branding experience to satisfy their current and future workforce.

“While an attractive remuneration package is desired by Australian workers, that is not what they are only looking for when they are searching for roles. The pandemic has shifted workers priorities and they are working with purpose more than ever before. These perks will help create a strong employer brand that will attract potential employees.

“Additionally, SMBs can offer their employees on-the-job or formal training opportunities to help them realise their potential or upskill in certain areas. RMIT Online’s Future Skills short courses equip individuals with industry recognised skills to support their career development and progression needs, and offer the chance to upskill.

“When staff are passionate about their work and understand the value they bring to the organisation, your team becomes advocates for the brand and direction of the business.”

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Yajush Gupta

Yajush Gupta

Yajush is a journalist at Dynamic Business. He previously worked with Reuters as a business correspondent and holds a postgrad degree in print journalism.

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