Talent acquisition and the retention and re/upskilling of talent are now the top challenges facing business leaders in Australia, according to a report from KPMG.

The report found that 69% of business leaders say that talent, including acquisition, retention and reskilling/upskilling to meet a more digitised future, is this year’s biggest challenge. This was followed by cyber vulnerability (50%), the challenges and benefits of employees working remotely (48%), digital transformation & optimisation and extracting organisational value from it (44%), and dealing with evolving regulatory processes, reporting changes and impacts (34%).

The report also found that in 3-5 years’ time, the biggest challenges will be: Digital transformation & optimisation and extracting organisational value from it (48%); talent acquisition, retention and re/upskilling to meet a more digitised future (47%); identifying & growing future market segments and/or innovation opportunities for growth (42%); new technologies (AI, machine learning, blockchain & distributed ledger technology, quantum computing) and the ethics and issues that arise when implementing; and dealing with cyber vulnerability (35%).

According to the report, one policy response adopted during the pandemic – border closures ‑ has been a strong factor in minimising the spread of COVID‑19 in Australia, but has also had the effect of negatively impacting the domestic labour market.

“Australia will be competing with other nations for the same skilled, motivated workers, and so it will also need to produce more with what we already have,” the report stated.

“So, in addition to the immediate work to ensure that employees retain the flexibility that contributes to their desire to work for an employer, re‑training, and re‑skilling need to become the focus of business leaders. Plus capturing the best and brightest from new cohorts of workers, whether they be home grown or foreign,” the report added. “This year’s survey has shown business leaders are already attuned to this shift in mindset, noting that the next few years will require them to ensure workers have more holistic opportunities, beyond pay rises and job stability.”