Big New Zealand companies thrive while SMEs struggle to keep up
Business leaders face significant challenges across the board, but small businesses are facing the toughest journey in 2022, according to the latest Shaping Business Study from 2degrees.
The report, conducted by Perceptive on more than 700 decision makers from employing companies around Aotearoa, found that companies of different sizes had a very different experience over the past year, and identified more professional benefits. and flexible working as key drivers for success in today’s environment.
“Kiwi businesses face an incredibly challenging environment, but the effects are not being felt in the same way,” says Andrew Fairgray, chief commercial officer of 2degrees.
“Costs are rising across the board, businesses are clamoring for skilled staff and Covid continues to pose challenges, but big businesses are weathering the storm in ways that smaller businesses are not.”
Prospects change according to the size of the company
Only 36% of business leaders feel more optimistic about their business compared to a year ago, down four percentage points from 2021. In contrast, 31% felt less optimistic and 33% felt pretty much the same.
Large companies are much more likely to be optimistic about their prospects; only 31% of small business leaders (1-20 employees) said they were more optimistic, dropping to 43% of medium-sized business leaders (21-50 employees) and 57% in large businesses (51+ employees).
Medium and large businesses were also more likely to anticipate revenue growth over the next 12 months and plan to increase investment in their business over the next year.
People are now the key to business success
Over the past 12 months, there has been a major shift in what businesses are looking for to thrive. The 2021 2degrees Shaping Business Study found that the number one thing business leaders needed to help their businesses thrive was cash as they navigated their way through pandemic-related disruptions. In 2022, the best solution was more skilled staff, with 3 in 10 business leaders saying it would help their business thrive, while cash (29%) and more staff (29%) are always on their minds .
Successful companies address their challenges by adapting their ways of working, with hybrid working dominating. Nearly half (48%) of business leaders said they have adapted their work model since the pandemic to include adjustments like hybrid and remote working, and greater online collaboration with internal and external parties.
“Attracting and retaining talent is critical in today’s business environment. Many of our own customers have told us it’s people, people, people and the research backs that up,” says Fairgray.
“With more than half (52%) of companies prioritizing productivity planning to invest in employing more skilled people over the next 12 months and sweetening the deal by introducing benefits such as furloughs and training options.
Flexible means productive
Medium and large companies were more likely than small companies to have adapted their work model, and research has shown that this decision translates into better business results. Companies that had changed their working model were much more likely to say that productivity (38%) and their ability to innovate (50%) had increased since the pandemic than companies that had not changed.
“We often talk about flexible working as a way to support our employees, but these numbers show it’s also a good business decision, and we’ve seen it happen ourselves at 2 degrees,” says Fairgray.
“This research shows that companies of all sizes looking to improve their productivity and innovation should seek new ways of working to unlock new opportunities, even in a challenging environment.”