SINGAPORE — A new study by SAP SE (NYSE: SAP) has found nine in ten (91%) small and medium-sized enterprises (SMEs) in Asia Pacific & Japan (APJ) say workforce volatility, including the Great Resignation, has directly impacted their digital transformation plans. This is critical, given 69 percent of SMEs say digital transformation is very important to their organisation’s survival over the next year.
These insights have been revealed in the new SME research released today, which explores the impact of the Great Resignation on APJ SMEs. The study, ‘Transformational Talent: The impact of the Great Resignation on Digital Transformation in APJ’s SMEs’ commissioned Dynata to survey 1,363 small and medium business owners and decision-makers across eight countries in the region (Australia, India, Indonesia, Japan, Korea, New Zealand, Singapore, Thailand).
The Impact of the Great Resignation on SME Digital Transformation
As the world economy recovers from the pandemic, businesses now face another challenge – the ‘Great Resignation’. Coined in 2021, the phrase refers to a worldwide trend of millions of employees across the world leaving their jobs.
SAP’s research found the Great Resignation is real and impacting SMEs in APJ today. Four in ten (40%) respondents agreed that more employees are resigning now compared to just 12 months ago, while almost two-thirds (64%) of SMEs said they aren’t finding it easy to cope with the impact of the Great Resignation.
The talent crunch is impacting organisation’s ability to digitally transform their businesses. In fact, lack of skilled talent ranks as the top challenge to achieve successful transformation for SMEs across Asia Pacific and Japan, ahead of traditional obstacles like cyber security, lack of budgets, and lack of understanding about available digital solutions.
“This study reveals how the Great Resignation can be seen as an existential threat to many organisations,” said Paul Marriott, President, SAP Asia Pacific and Japan. “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. Investment in talent must match investment in innovation to ensure SMEs in APJ both survive – and thrive.”
Investing in Talent and Training to Mitigate the Great Resignation
SMEs across APJ are investing in their workforce to mitigate the effects of the Great Resignation and to bolster their organisations’ ability to deliver digital transformation.
Survey respondents said they were investing in improving financial incentives and introducing flexible working arrangements (43% each) to boost talent retention over the next 12 months. Beyond those strategies, SMEs are also focusing on training. Four in ten (40%) 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 two-thirds (68%) of SMEs say upskilling to support digital transformation is urgent, leading to 72 percent of SMEs who will focus on digital training throughout this year.
“The Great Resignation has often been misconstrued as employees leaving to pursue their purpose. That’s not the whole story,” said Marriott. “Talent requires the right remuneration, flexibility, 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.”
Optimism Abounds as SMEs Move from Resilience to Focus on Growth
Having managed significant challenges over the past two years, SMEs across Asia Pacific and Japan are looking beyond a focus on resilience.
Almost half (49%) of APJ SMEs say their organisation is highly or fully resilient in weathering the pandemic’s impact. Just four per cent believe they are not resilient at all.
That confidence in their ability has resulted in a feeling of optimism about their growth prospects. 81 percent of SMEs said they are moderately, very, or extremely confident in their growth over the next 12 months.
That mindset can only be a positive thing for the region, according to Paul Marriott.
“Our small and medium sized businesses are a bellwether for the wider economy, making up 97 percent of businesses in Asia and employing 50 percent of the workforce. I firmly believe that when SMEs thrive, economies grow, and Asia prospers”, said Marriott. “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 APJ.”
The full report of Transformational Talent study is available upon request and the whitepaper can be downloaded here: https://www.sap.com/sea/documents/2022/04/cc7e3822-227e-0010-bca6-c68f7e60039b.html