The ‘Great Resignation’ is affecting SMEs, too – study

AS the world economy recovers from the pandemic, businesses now face another challenge — the “Great Resignation,” a phrase coined in 2021 to describe the trend of millions of employees worldwide leaving their jobs.

In the Philippines, for instance, resignation was the top reason for unemployment in 2021. In its survey titled “Mission: Rebooting Economic Activities through Community Engagement (RACE) program,” the Department of Labor and Employment (DoLE) said that 85,045 of the over 2.39 million unemployed workers resigned from their work last year. Meanwhile, in Metro Manila, the country’s capital, the labor turnover rate, which refers to the difference between hiring (accession) and the rate of job termination or resignation (separation), has implied negative growth in employment in the first half of 2021.

Trend impacting SMEs

According to a study released by SAP SE, the Great Resignation is real and impacting small and medium-sized enterprises (SMEs) in the Asia Pacific and Japan (APJ) region. The study, titled “Transformational Talent: The impact of the Great Resignation on Digital Transformation in APJ’s SMEs,” found that 9 in 10 (91 percent) SME respondents in APJ said workforce volatility, including the Great Resignation, has directly impacted their digital transformation plans. These plans are critical since 69 percent of SME respondents say that digital transformation is significant to their organization’s survival over the next year.

Meanwhile, 4 in 10 (40 percent) respondents agreed that more employees are resigning now than just 12 months ago, while almost two-thirds (64 percent) of SME respondents said they are not finding it easy to cope with the impact of the Great Resignation.

The talent crunch is impacting organizations’ ability to transform their businesses digitally. According to the study, the lack of skilled talents also ranks as the top challenge to achieving successful transformation for SMEs across APJ. It topped traditional obstacles, such as cybersecurity, lack of budget and lack of understanding of available digital solutions.

Mitigating the ‘Great Resignation’

To alleviate the Great Resignation’s effects and boost their organization’s ability to deliver digital transformation, SMEs across APJ are investing in their workforce.

Survey respondents said they are improving their financial incentives (43 percent) and introducing flexible working arrangements (43 percent) to ensure talent retention over the next 12 months. Meanwhile, 4 in 10 (40 percent) SME respondents said they would provide upskilling opportunities to retain key talents.

SMEs in the region also focus on training, with more than twothirds (68 percent) of the respondents noting that upskilling to support digital transformation is urgent, leading to 72 percent of SMEs who would focus on digital training throughout this year.

Despite these challenges, SMEs in the region remain optimistic. Having managed significant challenges over the past two years, they are looking beyond a focus on resilience. Almost half (49 percent) of the respondents say that their organization is highly or fully resilient in weathering the pandemic’s impact. On the other hand, 4 percent believe they are not resilient.

The confidence in their ability has also resulted in optimism about their growth prospects. 81 percent of the respondents said they are moderately, very, or extremely confident in their growth over the next 12 months.

SAP commissioned Dynata Research, an independent research services provider, to script and host an online quantitative survey of respondents from December 2021 to January 2022. The research is based on a representative sample of small and medium business owners and decision-makers across the Asia Pacific and Japan.