Private companies remain concerned over talent shortage
Over a fifth of private companies say an emergent talent shortage is a top concern for their operations. While employers are increasingly bullish about their prospects, with around two thirds expecting revenue increases, a combination of a lack of access to skilled workers, and rising commodity prices, were noted as key risks.
The global economy is increasingly in sync, with 45 countries tracked by the Organization for Economic Cooperation and Development, all found to be in a period of expansion. Global growth has increased to 3.6% for 2017, while this is projected to increase to 3.7% next year.
Unsurprisingly, private companies are increasingly positive about their prospects, according to a new report from Deloitte. The study, titled ‘Global perspectives for private companies’, took in the opinions of more than 1,900 executives across 30 countries. Respondents in most regions expressed confidence about their revenue growth, profit and gross profit margins. In the EMEA region, 66.4% expected their revenues to increase, while a further 20.9% foresee sustained stability. Gross profit margins were also said to be on the increase among the EMEA region respondents, at 51.8% expecting a positive result, while 63.5% forecast an increase for profit .
The respondents are relatively bullish on revenue growth for the coming 12 months, with the majority of EMEA respondents (58%) projecting growth of between 1-25%, around a quarter (22.6%) between 26% and 50%, and a staggering 14.7% of respondents projecting growth of between 51-100%. Given the strong outlook for revenue and profit, EMEA respondent countries are largely very confident (45.6%) or extremely confident (16.1%) about their future. This is even in light of the wider geopolitical concerns in Europe, such as Brexit, and more global concerns around geopolitics.
Talent trouble
When it comes to risks for company growth, varying factors were selected by respondents. For EMEA respondents, the ability to hire and retain employees was the most commonly cited factor, at 21.8% of respondents, although the cost of commodities followed closely at 21%. This result was backed by another recent survey from Deloitte’s Big Four rivals, PwC. Researchers at the professional services giant found that of 300 UK-based small businesses, nearly a fifth see skill shortages as the biggest barrier to productivity in their workforce. While SMEs placed great importance on STEM capabilities (24% felt these were in short supply), a further 37% said that resilience, adaptability and interpersonal skills are most lacking in new recruits, suggesting that employers in the UK, at least, are just as concerned about a soft skill shortage as they are by one in science or mathematics – thanks to a rapidly shifting market in a quickly automating world.
Other areas of risk in Deloitte’s survey included competition from market disruptors, trade barriers, and geopolitical uncertainties. The areas of least concern for EMEA respondents were the uncertain economic outlook of their home countries, access to financing, and lack of investment in innovation/research & development.
In terms of the top two strategies that EMEA companies will use for growth in the coming 12 months, productivity increases were the most cited, at 35.3% of respondents, followed by growing existing markets, at 32.8% of respondents. The development of new products and services, meanwhile, was cited by 31.9% of respondents while entry into foreign markets stood at 22%. Digital transformation was, interestingly, relatively less cited at 18.6% of respondents.
Commenting on the results, Ira Kalish, Chief Global Economist at Deloitte, said, “Most global economies are stable or accelerating and the companies are all experiencing this, seeing improvement in the economic conditions in their home markets. Those exposed to the global economy are seeing strength reflected in their overseas sales as well.”
