Business survey: move to "thriving" from "reviving" & "surviving".
A new survey of New Zealand businesses by 2degrees shows that while optimism is on the up, costs and pricing continue to be a concern.
The Shaping Business Study has been surveying New Zealand businesses for the last four years, and has provided insights from before Covid-19, through the pandemic, and how things are changing as the country moves into recovery.
One of the key findings was a positive outlook for the year ahead. Business leaders report a slight increase in optimism from 2022, with fewer describing their businesses as being in survival mode – plus an increase in those either ‘reviving or thriving’. Half of those businesses surveyed reported that they anticipated growing revenue in the coming year.
“We’re starting to finally see businesses recover from Covid-19 and the impact of Covid-19,” says Andrew Fairgray, Chief Business Officer, 2degrees. “The survey highlights that we’re seeing the transition from businesses purely surviving, to reviving, and now moving into thriving,” Fairgray says. “However, the inflationary pressures for input costs are still real.”
Increased running costs have affected almost all businesses, much as the increased costs of living affects everyday New Zealanders, he says: “Of the survey participants, 87 per cent said they had increases in costs but only 63 per cent have passed those costs on so far. So we need to be aware of this going forward.”
Many businesses have absorbed those cost hikes by either keeping prices the same as before, or by raising prices at a lower rate than the costs. More than half (54 per cent) of respondents said their costs had increased by between 11- 30 per cent on the previous year.
Larger businesses are faring better in the post-Covid recovery, with 24 per cent of businesses with over 51 employees saying they are thriving (compared to an average of 17 per cent across all businesses). On the other hand, businesses with fewer than 20 employees were much more likely to be just “surviving” (28 per cent compared to an average of 23 per cent).
“It appears from the survey that large businesses are still doing better than smaller businesses because they have scale,” says Fairgray. While 66 per cent of larger businesses anticipate revenue growth in the next year (50 per cent average), 28 per cent of smaller businesses did not anticipate revenue growth (24 per cent average).
While it presented many challenges, the pandemic also came with opportunities for business, he says. Half of the businesses who changed their working model since Covid-19 say their ability to innovate in a post-pandemic world is elevated. Just under half (48 per cent) of businesses have changed their work model with 64 per cent of those implementing hybrid working and 47per cent adopting remote working.
The most important factor when it comes to business productivity was overwhelmingly identified as people. Skilled staff with the supporting resources to do their job well were cited as a key indicator of business success, and offering training programmes to upskill staff benefits both the individual and the company.
Andrew Fairgray, Chief Business Officer 2degrees. Photo / Supplied.
However, staff were also cited as one of the reasons a business might not be faring so well, with staff shortages and retaining skilled and motivated staff identified as an issue.
This shows that employing the right people and supporting them in their work is critical to business success and productivity. However almost a quarter of businesses are looking to reduce costs by reducing training, learning and development, and approximately the same number (24 per cent) are looking to reduce staff.
Motivating staff through initiatives like incentives and employing more highly skilled people were the top two ways described to achieve higher levels of productivity; better use of technology was a close third.
The numbers paint a clear picture: the most productive businesses make the best use of technology. More than three-quarters of thriving businesses say digital technology improves their productivity. Fairgray says this is one of the ways 2degrees can best support New Zealand businesses: “We want to ensure the technology we provide customers supports them being productive, rather than adding cost and complexity.”
Effective use of technology directly aligns with the self-reported performance of a business. The percentage of businesses who say digital technology improves productivity goes down the more a business is struggling, with 64 per cent of reviving businesses and only 50 per cent of surviving businesses giving credit to technology, compared to 76 per cent of thriving businesses.
Struggling businesses should take a look at their digital tools and ask if the tech they are using is doing its job well enough, says Fairgray: “New Zealand needs to ensure that, across all businesses, we’re able to invest in upskilling in digital capability, and also have institutions that can provide digital capability.
“The survey highlighted the need to support skilled development and how to leverage technology – so it’s important for a telecommunications company that we truly understand what businesses need and what pressures they’re under, so we can play our part in uplifting New Zealand products and businesses.”
The Shaping Business Study surveyed over 700 business leaders across the country, providing insights into the trends shaping New Zealand business.
For more information visit 2degrees.nz
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