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New year brings old challenge: Talent drought tops the list of challenges for SMEs this new year

As the new year begins, Australian businesses face many challenges shaping the business landscape in 2023 and beyond. 

According to KPMG’s annual survey of business leaders, the top issue on their minds is talent-finding, retaining, and upskilling employees to meet the demands of the modern workforce.

But talent is one of many concerns for these business leaders. Digital transformation and cybersecurity also rank highly on the list of priorities as companies seek to stay competitive and secure in the digital age. These issues will likely continue to be important focus areas for businesses in the coming years as technology advances and evolves.

Interestingly, the survey also found that concerns about remote working have declined compared to previous years. This may be because many companies have already implemented measures to address the challenges of remote work and have adapted to the new normal of remote operations.

As these challenges and priorities come into focus, it will be important for companies to address and adapt to them to remain competitive and successful in the coming years. The survey found that talent was a consistently deep concern among business leaders, with many expressing difficulty finding and retaining skilled employees. In addition to talent, other top issues included technological change, economic uncertainty, and regulatory changes. These challenges will likely have significant impacts on businesses in the coming years, and it will be important for companies to address and adapt to them to remain competitive and successful.

According to the survey, talent is the top concern heading into 2023, with 77% of leaders identifying it as their biggest challenge, up from 69% in the previous year’s survey. Talent is the top concern for business executives over the short and medium term.

Digital transformation was the second biggest concern, up from the fourth place in the previous year’s survey. Extracting value from digital transformation and upskilling staff to meet the demands of a more digitised future were key aspects of the talent issue. 

Cybersecurity was the third biggest concern, down from second place in the previous year. It’s worth noting that the survey was conducted before the recent cybersecurity breaches at Optus and Medibank, which may have impacted the rankings.

Alison Kitchen, KPMG Chairman, said: “Finding and keeping good quality staff is vital at the best of times, but with unemployment, at its lowest level in over 50 years, the challenge has become greater due to a smaller pool of talent. While we are advocating for an improvement in Australia’s migration system to help address the talent supply, our respondents rightly acknowledge they need to implement actions to keep talented people and provide a work environment that fosters learning, development and growth.”

She added: “It’s notable that this year’s findings show a return to ‘nuts and bolts’ issues, such as staffing and the state of the economy. This is different from a year ago when employees working remotely were prevalent. Given that this year will be challenging economically, it makes sense for businesses to focus on fundamentals while remaining flexible and open to new opportunities.”

Dr Brendan Rynne, KPMG Chief Economist, said: “It is notable that digital transformation and the issue of re-skilling and up-skilling staff for a digitised future are very high in the priority list not only for the 12 months ahead but also the next 3-5 years.

“The commercial world is rapidly evolving, with the pandemic acting as a catalyst for change and turbo-charging development of all things digital, online and cloud. Most workers are digitally literate, but only to a point. 

New business and social applications are being released at an increasing pace, and the need to ensure staff are at least competent with technology – or ideally digitally enabled – is something our business leaders are contemplating how best to achieve. There is also an acknowledgement by business leaders that this is not a ‘fix once and forget’ challenge. Rather, this issue has increased in importance over the past year and will continue doing so.”

Tech will be more relevant in the near future

As the world becomes increasingly digitised, businesses are looking towards new technologies like artificial intelligence, machine learning, blockchain, and quantum computing to stay ahead of the curve. These technologies have the potential to revolutionise industries and create new opportunities for companies, but they also bring with them ethically and implementation issues that must be carefully addressed.

According to a recent survey of business leaders in Australia, these technologies are seen as increasingly relevant in the short-medium term. As businesses adopt and integrate these technologies into their operations, it will be important to consider the ethical implications and ensure that they are implemented responsibly and transparently. This is a growing concern for both businesses and policymakers, particularly in regard to data privacy and bias.

As these technologies continue to advance and evolve, it will be crucial for businesses and policymakers to work together to address the ethical and implementation issues that come with them, realise their full potential and create a better future for all.

Find more about the survey here.

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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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