Talent named top concern for Aussie business leaders in 2023: Report

While concerns related to talent management was also named as the number one concern keeping business leaders up at night in 2021, it has notably strengthened its grip on the top spot — with the figures up from 69 per cent in the report’s previous installment.

Extracting organisation value from digital transformation was the second major concern now facing leaders, with the issue cited as a priority at 46 per cent — up from fourth last year. 

KPMG noted that digitisation was a prevalent theme for this year’s report edition, and upskilling staff to meet a more digitised future was a key aspect of the talent issue. 

Dealing with cyber risks was the third biggest issue at 40 per cent, with cyber security sliding down one spot from last year. However, the report highlighted that the survey was carried out just before the recent Optus and Medibank cyber attacks came to light. 

Rounding out the top five key challenges facing organisations were dealing with evolving regulatory processes and the need for greater agility and flexibility, with both categories joint fourth place on the list for 35 per cent of respondents.

Notably, the top three issues for 2023 — talent, digital, cyber — were also seen as the most important over the next 3–5 years. Of the top five, four were the same for both the immediate and medium-term future.

KPMG Australia chairman Alison Kitchen said that the findings marked a return of Australian CEOs’ focus on “nuts and bolts” issues, such as staffing and the state of the economy. 

“These are notably different from a year ago, when their concerns involved staff working remotely, designing an ESG strategy, and ensuring diversity in organisational leadership,” Ms Kitchen stated. 

The challenges and benefits of remote working, for example, dropped by a massive 22 percentage points down to 26 per cent, from third position to eighth.

Meanwhile, ESG fell by seven percentage points to 25 per cent, diversity fell from 25 per cent to 14 per cent, transparency fell from 20 per cent to 15 per cent, and the ethics of new technologies dropped from 15 per cent to 12 per cent.

But with the year shaping up to be an economically challenging one, she noted that “it makes sense for businesses to focus on fundamentals while remaining flexible and open to new opportunities”.

“It may be that these issues have slipped down the priority list for business leaders because they have been operationalised during the past year and are now an existing element of the business. Others may have decided they will take time to resolve, and more time-sensitive issues have come to the fore.”

Additionally, the survey pointed out that the issue of identifying and growing future markets and innovation opportunities for growth has been elevated to the top five issues for the next few years at the expense of increasing agility and flexibility in the organisation to tackle opportunities and challenges. 

The switch up in priority indicated that business leaders are expecting this year to be choppier in terms of business conditions, so keeping agile and flexible to market adjustments is likely to be more important than medium term revenue growth — which will then take priority after the expected slowdown in 2023 comes to an end, according to the report. 

“This reflects the fact that while the COVID pandemic resulted in disruption to markets the world over, causing volatility in sales and profits, the global economy today is now larger than it was at the start of 2020,” KPMG's managing director - client growth and markets, Martin Sheppard, stated. 

Another trend seen to gain relevance over the short-medium term among businesses are new technologies (AI, machine learning, blockchain, quantum computing), as well as ethics and implementation issues associated with their adaptation.  

Dr Brendan Rynne, KPMG chief economist, said highlighted digital transformation and the issue of re-skilling and upskilling staff for a digitised future are very high in the priority list not only for the 12 months ahead, but also the next 3–5 years.

He explained that the commercial world is rapidly evolving and with the pandemic serving as a catalyst for change of “all things digital online and cloud”, businesses must ensure that their staff are upskilled accordingly. 

“Most workers are digitally literate, but only to a point. New business and social applications are being released at an increasing pace, and the need to ensure staff are at least competent with technology — or ideally digitally-enabled — is something that our business leaders are contemplating how best to achieve.

“There is also an acknowledgement by business leaders that this is not a ‘fix once and forget’ challenge. Rather, this issue has increased in importance during the past year and will go on doing so,” he stated.