By Martin Conboy
According to the study T2 market Pulse Survey that while businesses in APAC are optimistic about business growth in 2013, 55 percent of APAC Businesses don’t anticipate increasing their workforce
The majority of APAC businesses predict growth in the next 12 months, however interestingly many do not plan to increase their workforce numbers to support intended growth according to The Talent2 APAC Market Pulse 3 Study.
In the last few years there has been a mandate within Australian corporations to reduce internal operating costs and refocus on core business activities. Many companies are responding to this by outsourcing non-core business processes to third party providers.
The report finds a strong sense of optimism amongst the majority of APAC businesses, with 61% predicting growth for the next 12 months, and only 5 percent predicting decline. In Australia, the research shows that whilst more than half of businesses are forecasting economic growth in the next 12 months, only 40 percent expect to increase employee numbers.
This discrepancy could threaten to place great pressure on some companies and their employees and it is expected that as growth occurs without an increase in human resources, APAC businesses will turn to contractors. Businesses in APAC are however already using some growth strategies such as reducing headcount and investment in mature markets (36 percent) and increasing back-office services through shared service delivery (33 percent).
It is worth noting that Australia does not have a ‘people shortage’ problem, what we have is a ‘skills shortage’ problem. The mining and construction boom, mainly in Western Australia and Queensland, has acted like a giant vacuum cleaner, sucking up all available labour resources to fuel the insatiable demand of this sector. Not only do we have a skills shortage problem but our young people also have an adversity to working in the service industry. So even if there was no mining boom gobbling up available workers, we still cannot get people to work in call centres and local outsourcing shops.
Expansion is both a key driver and a significant benefit. In the Australian BPO study 2012 conducted by the Sauce and supported by IBM and Fuji Xerox, one factor emerged as the clear front-runner and that was global expansion. 40 percent of organisations considered access to skilled manpower as important
One possible explanation for companies looking for growth and reducing headcount is that they may not necessarily be able to identify the particular skills that they need in a fast changing market, and made thus turn to other methods to attract the required skills. These days growth does not always equate with increased FTE headcount.
The T2 research reveals that 66 percent of organisations across APAC currently employ contractors, a figure that is potentially set to grow as unemployment figures rise and job seekers accept contract positions.
Currently in Australia, with an unemployment rate of 5.1 percentage, it’s very hard for companies to find suitable staff to man their customer facing divisions. Consequently, if they want their phones answered, they may move to an outsourced solution, to access skills. This will be a major driver going forward. On the flip side, we have a community that demands that companies meet the highest standards of customer service.
Whilst awareness of the skills and benefits contractors can offer organisations is high, the research finds there are also challenges. 65 per cent of Australian businesses believe contracted workers increase workforce flexibility and scalability to support economic conditions and 37 percent feel contractors offer improved business performance by better matching specialist resources to company projects.
“It may become increasingly necessary for businesses across APAC to consider the flexibility of a contracted workforce in an oscillating economic climate, rather than resorting to cuts to full- time employees as a reactive profitability measure,” said Caleb Baker, Managing Director, RPO & Managed Services Asia Pacific, and Talent2.
“When unemployment rates rise, the demand for contractors also rises as people who were traditionally used to full time roles begin considering part time or contractor roles. It’s clear that whilst businesses are aware of the benefits a contractor workforce can offer, there are perceived barriers to adoption for businesses to overcome in order to consider employing contractors. These barriers can be easily addressed by working with expert providers who can offer ease of management and better visibility of contracted employees,” concluded Baker.