As the world economy recovers from the pandemic, businesses now face another challenge – the ‘Great Resignation,’ a phrase coined in 2021 to describe the trend of millions of employees worldwide leaving their jobs.
According to a study released by SAP, the Great Resignation is real and impacting small and medium-sized enterprises (SMEs) in the Asia Pacific and Japan (APJ) region today.
The study called “Transformational Talent: The impact of the Great Resignation on Digital Transformation in APJ’s SMEs” surveyed 1,363 SME owners and decision-makers across countries in the region.
Nine in ten (91%) SME respondents in APJ say workforce volatility, including the Great Resignation, has directly impacted their digital transformation plans. These plans are critical since 69 percent of SME respondents say that digital transformation is significant to their organisation’s survival over the next year.
Meanwhile, four in ten (40%) respondents agreed that more employees are resigning now than just 12 months ago, while almost two-thirds (64%) of SME respondents said they are not finding it easy to cope with the impact of the Great Resignation.
The talent crunch is impacting organisations’ ability to transform their businesses digitally. According to the study, the lack of skilled talents also ranks as the top challenge to achieving successful transformation for SMEs across APJ. It topped traditional obstacles, such as cybersecurity, lack of budget, and lack of understanding of available digital solutions.
“This study shows how the “Great Resignation” can be an existential threat to organisations. At SAP, we believe that having the right people is critical to ensuring digital transformation success,” said SAP Malaysia managing director Hong Kok Cheong (pic above).
“As part of retention efforts, SMEs must invest in talent as much as they invest in innovation to thrive amid these uncertain times,” he added.
How are SMEs mitigating the effects of the Great Resignation?
To alleviate the Great Resignation’s effects and boost their organisations’ ability to deliver digital transformation, SMEs across APJ are investing in their workforce.
Survey respondents said they are improving their financial incentives (43%) and introducing flexible working arrangements (43%) to ensure talent retention over the next 12 months. Meanwhile, four in ten (40%) SME respondents said they would provide upskilling opportunities to retain key talents.
SMEs in the region also focus on training, with more than two-thirds (68%) of the respondents noting that upskilling to support digital transformation is urgent, leading to 72 percent of SMEs who will focus on digital training throughout this year.
Despite these challenges, SMEs in the region remain optimistic. Having managed significant challenges over the past two years, they are looking beyond a focus on resilience. Almost half (49%) of the respondents say that their organisation is highly or fully resilient in weathering the pandemic’s impact. On the other hand, four percent believe they are not resilient.
The confidence in their ability has also resulted in optimism about their growth prospects. Eighty-one percent of the respondents said they are moderately, very, or extremely confident in their growth over the next 12 months.
