Readying Australian businesses for success in 2015
19 February 2015
A positive growth outlook amongst Australian mid-size businesses highlights the determined nature of the mid-market, its ability to adapt to change and its agility. Now is the time to refine the talent, innovation and productivity strategies needed to overcome business challenges in 2015.
Mid-size businesses remain an ill-defined and often overlooked sector within the Australian business landscape.
SME-focused policies often favour small and micro business models whereas other policies offer the big end of town greater opportunities yet mid-sized businesses employ around one-quarter of all full-time and part-time Australian workers, and contribute over one-third of all business revenues.
A positive economic outlook
Our research found Australian mid-sized businesses expect growth in the domestic economy to speed-up in the next five years while business conditions and business revenues are expected to increase over the same period.
Despite optimistic predictions for business performance the overwhelming majority of mid-size businesses expect challenges maintaining their cash flow over the short to medium-term. In particular, day-to-day operating costs have been singled out as the biggest challenge to cash flow.
Cash flow issues are surmountable with the majority of business leaders believing new products and/or services will offer the best solution to combat these challenges over the next 12 months.
More than two in five business leaders say they intend to expand into new markets – either geographical or new customer markets – during the coming year.
Economists predict the Australian dollar will continue to fall in 2015 providing further opportunities for international trade.
Additionally Australia’s new free trade agreements with Japan, Korea and China create even greater possibilities with some of our most powerful economic neighbours.
The mid-market is perfectly poised to pursue opportunities in new regions in 2015 and this will be pivotal to their success.
New ways to attract, secure and retain talent
A key factor that enabling businesses to meet future opportunities is their capacity to staff operations with the right people.
What remains a significant challenge for mid-size business leaders is their ability to compete with the big end of town in the war for talent.
Encouragingly our research revealed many incentives beyond remuneration that can attract and retain employees including rewarding staff with career progression opportunities, time in lieu and above all fostering a positive workplace culture.
Leaders of mid-sized businesses believe that focusing on the individual and instilling a sense of ownership and a collective vision for the business is the key to motivating and influencing staff.
This is where mid-size businesses have a significant advantage over larger corporates. With more flexible business structures they can fast track promotions for strong performers.
It is also easier for senior leaders to have a hands-on, personal leadership style to directly influence the workplace culture and focus on individual employees in a mid-sized business.
Innovation beyond technology
The mid-market’s unique mix of available capital and relatively flexible business structures also positions this sector to lead the way in innovation.
More than two thirds of mid-size businesses plan to use innovation as a key tool to gain a competitive advantage against larger business and fend off smaller competitors in 2015.
Rather than focusing solely on technology mid-size businesses are most commonly looking to improve existing services and create more efficient work processes, followed by growth and success and better productivity and performance.
Productivity taking priority
The underlying theme anchoring the mid-market’s focus on talent and innovation is productivity. In the year ahead, productivity will remain a hot topic for mid-size businesses from both a people and organizational perspective.
As the mining export boom has peaked the Australian business landscape – with the mid-market at its core – must focus on finding ways to deliver products and services faster, smarter and with less expense.
This will be especially important as Australia enters its new free trade agreement with China, an economy capable of producing high-quality, low-cost products.
A positive growth outlook amongst Australian mid-size businesses highlights the determined nature of the mid-market, its ability to adapt to change and its agility.
Now is the time for the Australian mid-market to refine the talent, innovation and productivity strategies needed to overcome business challenges in 2015.
About our research
The Bankwest Future of Business Series, a collection of research reports exploring topics directly impacting Australian mid-sized businesses including economy and finance, leadership and innovation, provides an invaluable insight into how business leaders are feeling about business issues.
We will continue to deliver these insights to business clients to help them make informed decisions on key business topics and strategies for success.
Our research reports reveal an interesting overview of the challenges and opportunities expected to impact Australian mid-size businesses in the year ahead.
Executive General Manager, Business Banking, Bankwest