New SAP study uncovers impact of 'the great resignation'
A new study by SAP SE has found nine in ten (92%) small and medium-sized enterprises (SMEs) in New Zealand say workforce volatility, including the great resignation, has directly impacted digital transformation plans. This is critical, given 79% of SMEs say digital transformation is very important to their organisation's survival over the next year.
The study, 'Transformational Talent: The impact of the Great Resignation on Digital Transformation in APJs SMEs' commissioned Dynata to survey 1,363 small and medium business owners and decision-makers across eight countries in the region, including 101 in New Zealand.
Coined in 2021, the phrase 'the great resignation' refers to a worldwide trend of millions of employees across the world leaving their jobs. SAP's research found this phenomenon is real and impacting SMEs in New Zealand today.
Three quarters (79%) of respondents agreed that more employees are resigning now compared to just 12 months ago, easily the highest in Asia Pacific and Japan. In addition, the research found 36% of SMEs said they are not finding it easy to cope with the impact of the growing number of resignations.
Another key finding was that the talent crunch is impacting organisations' ability to digitally transform their businesses. In fact, lack of skilled talent ranks alongside difficulty in balancing priorities as the top challenges to achieving successful transformation for New Zealand SMEs, ahead of traditional obstacles like cyber security or lack of budgets.
SAP managing director New Zealand Adrian Griffin says, “This study reveals how the great resignation can be seen as an existential threat to many organisations. Digital transformation is a fundamental way SMEs not only build resilience, but how they create agile, innovative paths to growth. But without the right people, any transformation will struggle. In order to survive and thrive, New Zealand businesses have to invest in people, invest in culture and invest in innovation.”
According to the study, SMEs in New Zealand are investing in their workforce to mitigate the effects of the great resignation and to bolster their organisation's ability to deliver digital transformation.
Survey respondents said they were focusing on introducing flexible working arrangements (33%) to boost talent retention over the next 12 months. Yet, beyond that focus, SMEs are also focusing on training.
Almost a third (29%) of SMEs said they would provide upskilling opportunities to retain key talent in the next 12 months.
The focus on training can't come too soon. More than eight in ten (81%) SMEs say upskilling to support digital transformation is urgent, leading to 88% of New Zealand SMEs who say they will focus on digital training throughout this year.
Griffin says, “The great resignation has often been misconstrued as employees leaving to pursue their purpose. That's not the whole story. Employers need to look at the wider workplace.
"People want to work at organisations with a diverse and inclusive culture, a welcoming and flexible workplace, and a clearly communicated progression journey. Prioritising upskilling and career progression and supporting it with access to the right technology and partners is proven to be a win-win for employees and for SMEs here in New Zealand.”
Having managed significant challenges over the past two years, SMEs in New Zealand are looking beyond a focus on resilience, the study finds.
Two-thirds (69%) of New Zealand SMEs say their organisation is highly or fully resilient in weathering the pandemics impact. Just 3% of respondents said they are not resilient at all.
That confidence in their ability has resulted in a feeling of optimism about their growth prospects. 91% of SMEs in New Zealand said they are moderately, very, or extremely confident in their growth over the next 12 months.
Griffin says, “That mindset can only be a positive thing for the region, according to Griffin. Our small and medium sized businesses are a bellwether for the wider economy. I firmly believe that when SMEs thrive, economies grow, and New Zealand prospers.
"By harnessing this optimism and putting it together with great innovation, a commitment to talent, and a strong partner ecosystem we can chart a course to the next decade of SME success in New Zealand.”