SA business productivity hindered by mindset, says William Buck
South Australian businesses need a change in mindset to tackle evident productivity issues, according to the William Buck Survey of Business Expectations.
The William Buck June quarter Survey of Business Expectations underscored that South Australia “is grappling with a productivity problem”.
Results from the survey highlighted the struggle to find talent with the right skills has stifled productivity, as 85 per cent of businesses reported either stagnant or declining productivity over the past 12 months.
The survey is operated by William Buck and the South Australian Business Chamber on a quarterly basis to provide insights that will guide policy changes and business enhancement across South Australia.
William Buck managing partner Adrian Chugg said labour shortages in South Australia have been a significant issue for years which has hindered businesses from reaching their full potential.
“The combination of recruitment difficulties and an economic slowdown driven by inflationary pressures has created barriers to productivity,” he said.
“However, a shift is emerging, particularly among larger companies.”
The survey results highlighted this “shift”, as 32 per cent of respondents indicated plans to invest more heavily in capital equipment over the next 12 months.
Businesses with more than 50 employees are attempting to adapt by redirecting funds into machinery and infrastructure investments, rather than towards wages.
Chugg said investment into capital equipment is a critical consideration for businesses grappling with productivity.
“This ‘do more with less’ approach is precisely the kind of initiative that businesses should consider to boost productivity,” he said.
“I acknowledge such investments are easier said than done, especially for those without substantial financial means.”
Chugg believes for productivity issues to be addressed, a shift in how business performance is measured is needed.
Results highlighted only 50 per cent of businesses have a method to track productivity, which is what contributes to the lack of productivity being experienced by these businesses.
The recent June results have mirrored previous quarterly results, with the cost of doing business remaining the top concern for operators across the state.
William Buck said the company has noted the focus on cost pressures and will assist businesses with their annual budget and forecasting process.
Businesses are also looking for guidance on how to navigate inflation, Chugg said.
“While I see inflation beginning to moderate, the best advice I can offer – echoing my predecessor Jamie McKeough’s analysis of the March quarter survey – is to not shy away from passing increased costs onto customers,” he said.
“In many cases passing on price increases can be challenging, but without productivity gains, it is the only way to ensure that business profitability is sustained.
“There is an art to increasing prices and the communication strategy is critical.”
