Business Radar: Understanding the businesses analyses key challenges, opportunities and trends facing Australia’s mid-market businesses, addressing post-pandemic business confidence and flexible work arrangements.

The report was independently commissioned and based on responses from more than 400 business leaders and owners in private, public and not-for-profit sectors across Australia, investigating the key challenges, opportunities and trends facing mid-market organisations.

Mid-market businesses are often referred to as the engine room of Australia’s economy, representing Australia’s largest segment and are defined as businesses as employing 20-200 people with an annual revenue of $2-$500 million.

These companies produce just under 25 per cent of Australia’s revenue ($898 billion) and employ 24 per cent of the country’s workers (2.84 million), however little data has been gathered about what drives or detracts them from their success, according to Pitcher Partners.

Business Radar aims to bridge that knowledge gap, collecting data and actionable insights from business and financial experts at Pitcher Partners.

The report explored themes of business confidence, staff shortages, changing expectations of workers, challenges of long-term planning, tech disruption and the uptake of environmental, social and governance (ESG) initiatives.

Key findings

While business confidence has taken a hit since the previous Business Radar report in 2021, it remains higher than pre-pandemic levels.

Findings show that more confident businesses have capitalised on growth opportunities from the pandemic and focused on managing business fundamentals, such as looking after customers, having a strong management team and managing cashflow.

Across all mid-market businesses, the top three drivers of success are strong customer relationships – 31 per cent, high quality talent – 20 per cent, and operational efficiency – 20 per cent.

Whilst COVID-19 remained a key influencer in areas of confidence, labour and worker shortages, technological advancements, and a growing influence of consumer tastes and preferences, mid-market business continue to hold an optimistic outlook on the future of their industry and the domestic and global economy.

The report demonstrates the resilience of business owners and their confidence in weathering the current economic storm.

Flexible work arrangements

The changing nature of work has been the face of many discussions for businesses since COVID-19 sent many workers home to their studies and dining rooms to work. Businesses who had previously resisted flexible working were suddenly forced to adapt to staff working remotely.

Flexible work arrangements (FWA) weren’t implemented by most businesses pre-COVID, however many found that it worked better than anticipated. FWA can be defined as employees working completely or mainly from home, and/or being able to choose when they work at home and in the office.

Around 48 per cent of flexible working businesses say they benefit from greater productivity, compared to 40 per cent for traditional work arrangement (TWA) businesses. FWA also delivers greater staff retention at 43 per cent versus 30 per cent for TWA businesses.

Flexible work arrangements have grown since COVID, but remain the minority, with 65 per cent of businesses currently maintaining traditional work arrangements compared to 76 per cent of businesses pre-COVID.

You can access the full report here.