Business Radar 2022
Pitcher Partners Business Radar
Mid-market businesses produce just under 25% of Australia’s revenue ($898b) and employ 24% of the country’s workers (2.84m). They are the engine room of Australia’s economy, yet little data is gathered about what drives or detracts from their success – and therefore the success of Australia itself.
Pitcher Partners Business Radar bridges that knowledge gap, with qualitative and quantitative data along with analysis and actionable insights from business and financial experts at Pitcher Partners.
The report found that while COVID-19 remained a key influencer on mid-market business confidence, labour and worker shortages feature prominently in 2022, along with technological advancement and a growing influence of consumer tastes and preferences.
Mid-market businesses continue to have a bullish outlook on the future of their industry and the domestic and global economy, demonstrating the resilience of business owners and their confidence in weathering the current economic storm.
Only have a minute or two? Check out our short explainer video with a taster of key insights from the Business Radar report. If your curiosity has been piqued download the full report below.
Despite continued upheaval and uncertainty, results from this year’s Business Radar show business confidence remains up compared to pre-pandemic 2019. However, a more detailed look shows the pandemic has benefited some businesses more than others.
In a world experiencing change faster than any time before, it is heartening to see from our results that the fundamentals of great business hold true. While luck certainly affected how companies weathered the global pandemic, overall top drivers of business success are still evergreen basics, such as strong customer relationships, high-quality talent and strong cashflow management.
The perennial problem of finding time to focus on long-term planning remains alive and well, with business owners wishing they had more time for this. Others are perplexed as to how to plan given the uncertainty in the market. For some businesses, the barrier isn’t about time but about inclination, with only 15% saying they’re happy to plan further out than five years. Others said they needed more advice or guidance.
But experience shows creating long-term plans, adjusted over time, can be a key driver of success and this research indicates that it’s a driver of business confidence at the very least.
Consistent with the report’s first and second editions, staff attraction and retention remain a challenge for almost half of the businesses surveyed. As we are all experiencing, this is now an even more critical issue with high-quality talent named as the second most important driver of business success.
The key factors contributing to this are poor work-life balance, lack of opportunity and workplace culture. Whatever the causes, staff shortages and higher turnover directly impact the bottom line, customers, morale and growth. With the labour market continuing to be tight in many sectors, these challenges will remain for some time.
Businesses that let staff work flexibly and those with traditional working arrangements both think their models work well. However, flexible businesses show 10% more confidence and rate the benefits of their model more highly, from better staff retention to a wider employee pool. Even so, over a third of businesses with traditional working arrangement can’t see the benefits of flexibility and somewhat surprisingly underestimate the challenges.
Flexible work also has downsides, with staff cohesiveness, culture and collaboration the main concerns, which are not insignificant areas for mid-market businesses and can have longer term consequences.
For 20% of mid-market businesses, COVID-19 had a positive impact. Some businesses and industries benefited from shifts in consumer preferences such as increased uptake of online shopping or home deliveries, or a shift to local manufacturing and production due to global supply chain disruption. For many businesses the positive impacts were through driving accelerated innovation and change. Technology adoption was a key enabler, however moving to a more online and digital world has come with an increased risk of cybersecurity threats.
Only 18% of Australia’s mid-market businesses have implemented and are reporting on their ESG practices. As community concern grows around these issues, alongside an increase in federal and state regulations, it is not a matter of if, but when mid-market businesses need to take action.
And beyond good public will or compliance, our respondents told us of essential business benefits from their ESG programs: reduced costs, improved revenue and growth, and increased employee engagement.
Independently commissioned, and conducted by TRA, this research is based on responses from 402 business leaders and decision makers in mid-market businesses across Australia.
Using qualitative and quantitative data, this report aims to drive conversation and help businesses understand their broader environment so they can plan with more certainty.
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