Before the pandemic, mid-market companies in Southeast Asia were seen as major players in economic development, having delivered a rising trajectory for annual sales. In the 2018 EY Growth Barometer, 40% of companies in APAC were targeting double digit growth rates comparing to the projected global growth rate of 6%.
However, when the health crisis hit, mid-size companies in the region had to face disruption and downturns and had struggled to cope with the economic impact to sustain business continuity. Losses in the developing Asia region were estimated at 6.0%-9.5% in 2020 and 3.6%-63% of the regional gross domestic product (GDP) in 2021, according to the Asian Development Bank (ADB).
Investment in digital transformation is in the cards to overcome pandemic related challenges, as well as to position business for strategic growth. According to a 2021 study by Grant Thornton, 30% of mid-market companies in Singapore anticipate an increase in technology related spending. With a larger workforce, it would make sense that these companies would have a varying set of challenges from their smaller counterparts.
In the DBS Digital Readiness Survey released in September 2021, larger companies reflected that their key concerns include, if user capabilities are able to keep up with the speed of change and complexity in the enabling technologies and the availability of digital talent. To address these challenges arising from rapid technology innovation, reskilling and upskilling needs to be a strategic focus.
Upskilling and reskilling the workforce to establish agility
Considering these limitations, upskilling and reskilling employees has become imperative for mid-size workplaces today as they continue the path to recovery, especially those that bore the brunt of the pandemic the most.
The rapid transformation of technology demands the people who operate them to adapt accordingly. To keep pace with the tech trends, organizations need to embed learning into their workplace culture, establishing an agile workforce.
When people hear the term reskilling and upskilling, they often envision a classroom setting, with dedicated days of coursework and training. In formal training, this is true, but there are other ways in which people learn at the office, both through informal and non-formal training.
By respecting the value of all three of these types of learning, mid-market businesses can create a lasting culture in the workplace. Learning cultures lay a foundation toward a more productive and efficient workforce, which ultimately leads to higher wages for employees and increased revenue.
This doesn’t happen overnight, however. It requires a philosophical adjustment by business leaders, which is no small ask among these largely private, family owned, decades-old companies.
A workforce equipped with specialized skills is a workforce that can deliver increased productivity and efficiency and generate higher revenues. This, of course, doesn’t happen in a snap.
Organization-wide upskilling and reskilling should begin with the leaders acquiring a digital-first mindset with the tenacity to innovate and update their traditional ways of executing business operations. They need to rethink their approach to learning and development to provide their employees with the resources and training they need to gain expertise in these new technologies that would guide the business towards resilience in the new normal.
Cost of training vs. cost of hiring
In 2019, Deloitte surveyed 500 mid-market executives, and 61% of respondents said they are reskilling their workforce, while 57% said they are redesigning jobs to account for positions lost to automation and technology.
The mid-market is so bullish on upskilling and reskilling because unlike enterprise businesses, these companies are, according to some, majority private (85%) and can’t access the capital required to hire specialized talent. The pandemic has hit the middle market hard, leading to layoffs and lost revenue, which in turn has accelerating the need for new technology as well as the employees trained to use it.
By certain estimates it can cost a business as much as six times more to hire from the outside than to build internally. In a depressed market, those savings at scale allow mid-market businesses to invest in innovation, and by saving both the time and money it takes to recruit from the outside, they can more quickly and efficiently adapt to disruptions in their industry.
Companies can even take advantage of the plethora of digital training platforms and online learning resources offered by different software providers that are usually particular to their own products. To supplement this, it is also important for businesses to make available for employees digital tools to help collaboration and thus enable lateral learning. Adopting a communication platform for employees goes a long way to help with information sharing across departments, this encourages organic peer-learning organisation wide and supports other reskilling or upskilling efforts.
Investing in skills builds the path to a better future
The strategy to recovery should be centered towards future-proofing the business. Mid-size companies do not face the same challenges as small and large enterprises. As they bounce back from the impact of the pandemic, technology navigated by a skillful workforce could be their greatest asset. At this point, with the tight competition and the dire need to move past the disruptions brought by the pandemic, upskilling and reskilling employees should no longer be optional but a must.
The mid-market has consistently proven its resilience to new challenges. Undoubtedly, these companies are ready to transform their ways of work by venturing into new areas of expertise like data analytics and AI, which will significantly change the results they yield. Upskilling and reskilling employees to better understand and use these technologies proficiently is the key to developing a successful business in the industry.