Skills shortages are looming large
Skills shortages are holding private businesses back from realising their full potential. The problem is costing revenue and is significantly impacting economic growth in CEE. Turnover losses estimated by private business owners in the region are believed to be €358 billion, or more than 12% of gross domestic product (GDP). And more than half of leaders surveyed (62%) felt they lacked the right in-house talent to realise the full benefits of digital efforts.
The situation is made more difficult for private businesses by the need to compete for talent with both local MNCs, which often have strong employer brands and bigger budgets, and with neighboring EU countries. For many countries in CEE, the result is a serious demographic challenge, as younger workers migrate to wealthier countries, leaving an aging population.
Given the challenges of this environment, it’s more important than ever for private businesses to find people with the right skills, or at least the right potential to learn new skills.
So what can companies do?
Many are already focusing on internal and external trainings, or targeted recruiting of skilled experts. We think they may need to go a step farther -- attracting technically skilled workers may require them to step outside their comfort zones. We have often noted that private business across all parts of Europe tend to avoid the spotlight. Given growing competition for the best talent, being a “hidden champion” may no longer be a viable option. Companies should step out of the shadows to be visible and attractive to recruits; we discussed some ways to do this in PwC’s latest Family Business Survey
Getting digitalisation right to power future growth
63% of private business leaders surveyed recognise that digitalisation will have a high impact on the long-term viability of their businesses. But many are focused primarily on digitalisation as a route to process improvement. We see significant benefits to viewing digitalisation as a holistic strategy to transform an entire company – especially at a time when the economic cycle demands reinvention and renewal in preparation for the next era of growth.
In addition to staffing challenges, private businesses will need to consider how to fund their digital transformation. Only 22% of CEE business leaders overall say their companies allocate more than 5% of their investments to digitalisation, compared to 35% in more technologically advanced parts of Europe such as Scandinavia.
CEE private business leaders also need to take another look at some of the most important technologies for the future, like AI, virtual reality, and 3D printing. Even the private businesses that rate these technologies highly often aren’t making use of them, though. Take a look at our data explorer to find out more.
The time is now
While we recognise the challenges of embarking on transformation in turbulent times, the time is now for CEE private businesses to capitalise on the opportunities digitalisation offers. Doing so will be critical in order to avoid falling behind in an ever-more competitive global landscape.
For governments the time is now to take a more active stance to encouraging investors to finance innovation and support the advanced use of new technologies across private businesses sectors, by creating regulations that promote digital uptake.
