Australia’s medium-size businesses are expected to boost their productivity spending by 12 per cent over the next year, according to new research released by Bankwest.
Bankwest’s Productivity Report forecasts mid-size businesses will be spending $706,471 in the next 12 months, investing more on customer service, marketing, education/training and upgrading technology. 45 per cent of Australia’s mid-size businesses are intending to increase their outlay by an average of $76,205.
Mid-sized business in the professional services industry are planning the biggest boost in productivity spending, the report forecasting a rise of 56 per cent to $372,783 in the next 12 months.
“Conditions are challenging for businesses and they have to find a competitive edge to ensure the ongoing strength and continual growth of their businesses,” Bankwest Executive General Manager Business Banking Sinead Taylor said.
“I believe more businesses are realising that if they can work smarter and boost their productivity, they will be a step in front – no matter what the economic conditions.
“Increasing consumer demands and expectations for a faster, easier and generally better customer experience are also driving businesses to embrace productivity.”
46.8 per cent cited “business growth” as the key driver behind the planned rise in spending, with reduced operating costs (44 per cent) and increased revenue/profitability (39.4 per cent) following close behind.
When it comes to driving productivity within the mid-market sector, 65.5 per cent of businesses said they believe brainstorming was the best technique. 61.4 per cent highlighted cost-benefit analysis as their technique of choice, followed by a leadership focus on improving productivity (60.8 per cent).
“More than one third of businesses (36.3 per cent) that do not use internal education to focus on what productivity means and how to achieve it, intend to use this strategy to drive productivity in the future. This represents the highest proportion of all techniques businesses plan to adopt,” Ms Taylor said.
“However, despite almost half mid-sized businesses planning to increase their productivity investment over the next 12 months, they face key barriers of time availability and resourcing.”
35.3 per cent cited the lack of time as the biggest barrier to investing in productivity, as was organisational culture (27.7 per cent), sufficient financial resources (27.5 per cent) and sufficient human resources (24.5 per cent).