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Aussie firms resilient, but labor shortages loom

A recent study conducted by SAP SE has revealed that Australian businesses exhibit a higher degree of resilience compared to the global average when it comes to dealing with major disruptions. 

According to the study, 70% of Australian businesses have effective plans in place to swiftly respond to incidents like severe weather, geopolitical conflicts, or cyberattacks, surpassing the 65% reported by global respondents. However, there is still room for improvement in bolstering resilience, particularly concerning strategic challenges. Australian businesses are trailing behind the global average in effectively planning for talent shortages, transportation disruptions, unforeseen market events, and supply chain issues.

This emphasis on planning is crucial as labor and skill shortages are identified as the top risk to Australian business growth in the upcoming year (56%), surpassing the global average of 40%. Other significant risks include economic volatility (52%), cyberattacks (45%), and supply chain disruptions (44%).

These findings are part of a new research report released by SAP Insights, based on a survey of 4,239 organizations, including 329 from Australia.

AusNet Secures its Future with Technology Integration The study’s findings resonate with AusNet, an Australian energy network company, which has implemented SAP to streamline its human resources (HR) operations, enhance compliance, and provide a better experience for its employees.

In 2022, AusNet recognized the need to enhance its existing HR processes by consolidating multiple systems, reducing manual interventions, and expediting HR tasks for employees and managers. In collaboration with IBM, AusNet adopted SAP SuccessFactors, resulting in standardized business processes, streamlined employee and manager interactions, and real-time insights into employee attendance and turnover for continuous workforce improvement.

Bernie Repacholi, Head of People Systems & Enablement at AusNet, commented, “We aimed to modernize the employee experience and recognized the necessity for a system that could integrate various isolated systems across the business into a single platform for our employees and leaders.”

“Our collaboration with IBM led us to co-create a solution based on SAP SuccessFactors, simplifying how our employees engage with us and boosting productivity within our teams.”

Repacholi further noted, “Through SAP, we can now future-proof our processes in response to policy or legislative changes. This ensures ongoing compliance and governance, enabling us to focus our efforts on initiatives directly supporting our workforce.”

The Future of Business Rests on the Strength of its People

While labor and skill shortages were identified as the greatest future risk, Australian businesses remain confident in their current ability to manage their workforce effectively.

60% of Australian businesses express extreme or high satisfaction in their capacity to enhance workforce skills, while 56% are similarly satisfied with workforce optimization, including productivity enhancement and ensuring employees possess suitable skills for their roles. This confidence stems from effective staffing plans to address shortages (59%) and robust processes for preparing employees to adapt to new roles (72%).

Damien Bueno, President and Managing Director of SAP Australia and New Zealand, remarked, “This research underscores a strong link between business resilience and workforce resilience. In a world demanding novel solutions, this study serves as a wakeup call for Australian organizations to continue investing in their workforce, cultivating curious cultures that support innovative thinking and exploration of ideas. Such approaches, when coupled with data and technology, not only safeguard businesses but also fuel future growth.”

However, there is more work to be done. 40% of Australian organizations acknowledge the need to address skill shortages to enhance responsiveness to change, a figure notably higher than the global average of 30%. Additionally, 33% agree that addressing labor shortages is also imperative.

Banking on Technology for Resilience

Australian organizations are gearing up to equip their workforce with technology. 40% of businesses believe that the most significant growth opportunity lies in using intelligent technology for decision-making, and a substantial 78% believe they possess the necessary data to plan for the future.

Despite these optimistic figures, 42% of respondents indicate a need for technological improvements to enhance responsiveness to change. This could be attributed to entrenched mindsets and traditional practices. The most significant barrier to innovation in Australia is identified as the difficulty of relinquishing current products, services, and business models.

Bueno adds, “The ability to swiftly adapt across the entire organization is pivotal for future success. Australia lags behind the rest of the world in terms of business process flexibility. Integrated innovation platforms can unite the entire value chain, creating robust business outcomes.”

In response to this, Australian businesses are investing in technology to enhance resilience. The most crucial innovations for bolstering resilience include automated business networks (61% vs. 55% globally) and cybersecurity (58% vs. 50% globally), followed by employee collaboration and experience management software.

Curiously, Australian organizations perceive AI and machine learning as less vital for their future resilience (36%) compared to the global average (41%).

“Although AI is still in its early stages, business AI can aid companies in anticipating, preparing for, and performing in response to rapidly evolving demands. At SAP, we have recently incorporated AI into critical business process systems to uncover exceptional insights and efficiencies. This helps future-proof businesses by integrating people, innovation, and core business processes,” concluded Bueno.

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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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