‘Big Quit’ hits DX plans of 9 in 10 SMEs in APAC, Japan

Nine in every 10 (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, according to a new study by SAP.

This ratio is critical considering that 69% of SMEs — firms with 11 to 250 employees — say digital transformation is very important to their organisation’s survival over the next year. 

Commissioned by SAP, Dynata Research conducted in December 2021 and January 2022 an online quantitative survey that covered 1,363 respondents across eight countries – Australia, New Zealand, Singapore, Thailand, Indonesia, Japan, India, and South Korea. There were 100 respondents in Singapore.

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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. 

Two in every five (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. 

In Singapore, optimism abounds to pursue long-term growth as 92% of SMEs are optimistic about pursuing growth in the next 12 months. Also, 58% say they are highly or fully dealing with the challenges of the pandemic. 

Key priorities in the next 12 months include digital transformation (41%), increasing sales revenues (37%), acquiring new customers and businesses (36%), innovating new products and solutions (28%).

The Great Resignation is hampering local SMEs’ growth with 49% of Singapore SME’s say they aren’t finding it easy to deal with the Great Resignation.

Singapore employees are leaving mostly due to financial incentives (41%), to pursue more personally fulfilling work (38%), change in career or job role (33%), perceived career progression (33%).

This is hampering their innovation and digital transformation plans, with 92% of Singapore SMEs saying the impact of workforce volatility is making it difficult to keep up with their innovation and digital transformation plans.

Singapore SMEs are banking on talent and digital training to mitigate the Great Resignation, including flexible work arrangements (40%), upskilling opportunities (35%), and improving financial incentives (29%)

The talent crunch is impacting organisation’s ability to digitally transform their businesses. Lack of skilled talent ranks as the top challenge to achieve successful transformation for SMEs across APJ, ahead of traditional obstacles like cyber security, lack of budgets, and lack of understanding about available digital solutions.

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