Thursday, 07 June 2018 17:45

Lack of qualified staff biggest challenge for midmarket businesses: MYOB Featured

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MYOB has been taking a look at midrange companies and the issues they face.

Transforming the Mid Market says the 51,000-strong Australian mid-market — those with 20 to 200 staff — makes up 2.3% of all businesses, employs a quarter of the workforce, and has a combined revenue of $500 billion.

Not all the issues canvassed in the report relate to technology, but as this is iTWire we'll focus on those that do.

Staffing

Finding qualified staff was the top pressure point identified by the research, with tech skills being particularly called out.

"It's always about your people, and always about the client experience," but "access to capital is crucial", observed KPMG Private Enterprise partner Simon Richie at MYOB's launch of the report..

Technology solutions provider Axsys managing director Jason Ransley said: "Recruitment is a big thing – we're constantly recruiting" and it takes six to 12 months to get new hires up to speed.

Accomodation and hospitality provider Marnong Estate general manager Gerald Ackroyd suggested there isn't really a skills shortage, rather the issue is more about businesses being sufficiently flexible to employ people for the hours they want to work rather than vice versa. "As businesses, we have to be flexible," he said.

Richie expressed the opinion that privately-owned businesses weren't particularly good at people management and, in particular, older owners expected their young hires to behave as they did at that age. Those employees expected to have a life outside work, and would not put in 10 hours every day. Rather, they would ask questions that were actually aimed at getting the work done in less time. And when it came to staff loyalty, "they're just more loyal for a shorter period of time".

Asked about the high levels of under-employment of older people, Ackroyd said, "Our biggest opportunity is these people" and the challenge was getting different generations to work together.

Investment

"While enterprise owners decide the overall direction of their businesses, chief executives (or the equivalent) are the most likely group to decide when, where and how the business invests in IT and related services," the report found.

Thirty percent of respondents said the head of IT influenced IT investment decisions, which is a worryingly small proportion. While the owner or CEO might reasonably have the final say, the report said it was of concern that the expert was being ignored by more than two-thirds of these businesses

Innovation

The report found a reluctance to invest in R&D and innovation. Thirty-one percent said they don't budget for either, and 22% said they invested less than 1% of revenue. On average, the investment was just 1.5%, rather than the recommended 3%.

Lack of skilled staff was reportedly the main barrier to innovation, but a lack of time is another significant issue.

"R&D takes many forms," said Ransley. It can be software development, but it can also be about finding ways to improve processes. Most businesses spend nothing on R&D, he suggested, but companies like his sell tools that embody their R&D so customers don't have to do it for themselves.

Richie expressed the opinion that R&D was a nebulous term, and private businesses were involved in various activities that they did not consider to be R&D, yet probably are.

Furthermore, owners have a high proportion of their personal wealth tied up in their businesses, so they were bound to be prudent.

Technology

Another worry is that the technologies identified by midmarket businesses as having the greatest impact in the next 10 years are already here and now: Internet connectivity and cloud computing. Automation and robotics, IoT and AI were further down the list.

"Technology adoption happens faster than we think," said MYOB general manager of enterprise solutions, Carolyn Luey. Digital transformation led to operational efficiency, higher performance, improved customer satisfaction, and greater scalability, she said.

Businesses of all kinds should embrace the available tools and try to get ahead of the curve, advised Ransley, but Richie was sanguine: "Don't worry about the future – you've handled it in the past."

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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.

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