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To succeed and remain resilient in adversity, private enterprises must give sufficient emphasis on retaining and reskilling talents.
In brief
- Private businesses must look into the demands of the newer generations of workforce.
- Talents need to be reskilled continuously to meet with the acceleration of automation and digital transformation.
Over the past three years, entrepreneurial business leaders have been regularly reviewing their business strategies to adapt to the significant disruptions to their business caused by a series of major health, economic, climate and geopolitical events. The Malaysian Government continues to provide various types of financial aid and tax incentives to support businesses in these uncertain and challenging economic times. EY research into more than 3,000 strategic growth plans, created by privately-owned entrepreneurial businesses around the world, shows how their strategic priorities have changed since 2019 – privately owned entrepreneurial businesses have frequently shifted their top three priorities to stay in business.
Most companies have been impacted by these major events in one way or another – supply chain disruption, changes in customer behavior, workforce challenges and labor shortage, being forced to accelerate digital adoption, and changes in work culture.
No one can foresee when the ongoing health, economic, climate and geopolitical challenges will end, or what may come next. However, one thing we have learned in the past 3 years is that uncertainty and change are the new constants.
One would then ask; how do private businesses survive all the uncertainties and changes?” Bernard Yap is the Malaysia Private Tax Leader
Talent retention
In order to succeed, private enterprises have heavily relied on the commitment, passion and talent of their people. Private enterprises are also affected by the Great Resignation, a trend that stemmed from the COVID-19 pandemic. According to the EY 2022 Work Reimagined Survey, 46% of employees in private enterprises said they were likely to leave their employers in the next 12 months. This represents a significant rise from 2021, when only 7% said they were likely to leave their employer in the same period. Sixty-seven percent of private company employers have stated that staff turnover has increased over the past year and hence, private businesses have needed to shift their top priority to people, particularly talent retention.
The new generation of the workforce have different demands as compared to previous generations. They are demanding better work-life balance, enhanced perks and benefits, higher remuneration, more flexible work arrangements, increased training opportunities, better visibility of their future in the company, as well as more appreciation and recognition. Private businesses need to take note of this trend and devise a plan to embed their people agenda into their overall business strategies.
In the meantime, how do private businesses mitigate the impact of the Great Resignation on their company? The first logical step would be to get ahead of any potential talent retention issues. Addressing the most prominent issues that push employees to leave the company such as toxic work cultures, perceived insufficient remuneration, lack of learning opportunities and inflexible work arrangements will go a long way towards improving talent retention.
Businesses should also have contingency and succession plans in place in case resignations still take place despite retention efforts. One option could be the out-sourcing of certain functions which were previously carried out by employees who have resigned.
Shift from being labor intensive to automation
Pre-pandemic, most private businesses were taking baby steps in adopting automation and digital transformation. During and post-pandemic, these companies have been forced to accelerate the automation and digital transformation process as the pandemic has shifted customer buying patterns and expectations. In addition, supply chain disruptions, which resulted in delivery issues, shortage of resources and higher costs, have translated to increased purchase prices for consumers. The accelerated adoption of automation and digital transformation can help to drive down costs, while improving customer engagement through an enhanced customer journey.
Reskilling requirement in a world of change
With the acceleration of automation and digital transformation such as artificial intelligence (AI), data analytics and blockchain, private businesses are struggling to find the right people with the skills to strategically work alongside these technological tools to take the business to the next level. C Businesses may consider reskilling their existing workforce to support the business strategy. Apart from reskilling, the company may also consider upskilling their existing workforce. To ensure that the workforce remains competitive and agile, private businesses will need to continually assess their employees' individual capabilities and the skills they will need to remain relevant to the business.
To strengthen the global competitiveness and resilience of private businesses, the Malaysian Government could consider introducing double tax deduction on expenditure incurred by private businesses in relation to the reskilling / upskilling and training of their employees in connection with the implementation of automation or digitalization projects.
In addition, we welcome the Government’s introduction of tax and other fiscal measures to support training education centers / institutions in developing dedicated structured courses for business enterprises, instead of generic courses.
The Government also encourages people to attend any course of study undertaken for the purpose of up-skilling or self-enhancement recognised by the Director General of Skills Development under the National Skills Development Act 2006, by giving personal tax relief for the years of assessment 2022 and 2023.
Learning on the job vs new skills
Today, the competition for adaptable and multi-skilled employees is intensifying, and individuals who do not want to learn and re-equip themselves will fall behind. Individuals need to take charge of their careers and pro-actively seek out learning opportunities, rather than relying on their employers to do this for them. To inspire employees to consciously and voluntarily learn, enterprises need to identify the triggers for self-motivation
Post-pandemic, we must not only change the way we work, but also reconstruct the relationship between employers and employees through a shift in mindset and a change in corporate culture.
Summary
Upskilling skillsets is an evitable journey for every worker who do not want to be left behind, and it must be made an agenda of the employers to achieve positive changes.
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