The ramifications of a patchwork economy - one where some parts of the economy are "rockin' while others are being rolled", as Journalist Andrew Pelger puts it – are far reaching.
The differential speeds of industries create differing levels of demand for products, services and importantly, skilled labour. These differing levels of demand are creating structural shifts which are not only affecting Australian businesses, but having a profound implication on the way Australian businesses attract, retain and develop their talent.
In the four years since the GFC, many of Australia's leaders have made tough choices and transformed their business models.
Now, it seems the focus is on human capital. Implications of managing both organisations in growth industries (such as mining) and those under pressure in our patchwork economy (such as wholesale and retail trade, banking and finance) are calling into question traditional leadership techniques to enable optimum employee productivity, engagement, retention and reward.
For Leadership in a Patchwork Economy, the latest in Chandler Macleod Group's white paper series, we polled 560 senior businesspeople across Australia from April through to May 2012. This was supplemented with insights from a range of publications, research reports and articles produced in the last 12 months, including Chandler Macleod's own Workplace Barometer, Organisational Agility: Navigating the Maze.
The combined conclusions form the basis of this report and reveal the complexities of managing organisations in the current environment, including current trends, emerging techniques and critical issues for business leaders in the current market - as well as what smart leaders are doing to lock in future success.
- Despite continued global uncertainty, Australia's business leaders expect revenue growth to increase in the next 3 years. While risk management is still on their minds, growth is high on the agenda, with many leaders pursuing ambitious agendas balanced with risk.
- There is a strong link between specific leadership traits and growth. Executives need to be highly skilled in the strategy which is driving their business's growth, with the key required skills being customer impact, market insight, agility and results orientation.
- Key leadership issues now have a focus on human capital. To drive a business forward in the current economy, leaders and managers need to have a strong skill set in attracting and retaining talent and non-negotiable qualities of leadership that they apply in good times and in bad.
- The performance of any organisation depends on having an engaged workforce. Achieving employee engagement presents a challenge for today's leaders and consequently, increasing employee engagement ranks as a personal priority for today' leaders.
- We are already starting to feel the impacts of the next skills shortage. Even industries which are experiencing sluggish growth or contraction are experiencing an increase in difficulty in attracting skilled workers, and many sectors are feeling the "uality crunch"
With this understanding, our report explores the following areas that leaders in a patchwork economy will need to address to capitalise on future growth opportunities:
- Getting the best from their existing workforce
- Recruiting outside the box
- Considering changing the business model to increase agility
- Working outside the traditional boundaries of narrow skills definition
- Investing in talent.