Mid-sized businesses face tremendous opportunities, as well as some challenges, as we look ahead in 2020.
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Mid-sized businesses face tremendous opportunities, as well as some challenges, as we look ahead in 2020.
As a commercial banker here in Worcester, I work to keep my clients ahead of the latest trends and insights potentially impacting their companies. As companies strive for growth, environmental, social and governance (ESG) continues to be a must-have program and a factor increasingly influencing the bottom line.
In today’s competitive landscape, companies should embrace new big data-driven technologies to stay ahead of the pack, while actively preparing for risk. Big data has the potential to create a competitive threat or an opportunity for growth in nearly every industry.
Finally, the lines between human and machine work continue to blur; technological innovation in the workforce is prompting massive changes – a transformation referred to as Industry 4.0. Here are insights my team at Bank of America will share with our clients this year.
ESG: It matters
Having a strong ESG program brings advantages, especially as customers want to work with companies with transparent business practices who live their purpose. Public or private, large or small, companies prioritizing ESG can increase their social impact and manage operational risk with customers, investors, employees and communities.
Companies with effective ESG programs focus on factors identified as most material to their unique business and culture. To build an authentic and tailored program, they should conduct assessments of priority factors among stakeholders and classify risks and opportunities in a way going beyond just financial metrics.
Big data is shaping the future
Big data, including artificial intelligence, the internet of things, and 5G are allowing companies to realize untapped potential in efficiency, customer experience, talent and profitability. Improved business intelligence, predictive modeling and scenario analysis allow unprecedented visibility into work streams, capital cycles and customer behavioral patterns. This can help companies improve planning and forecasting models, reduce inventory costs and consider future headwinds.
AI has become more proficient in performing complex tasks and achieving more accurate outcomes, which has allowed companies to design products focused on the needs of customers in new and unimagined ways. However, these tools face increasing scrutiny regarding privacy, heighten the risk of cyberattacks, and may require companies to spend time, money and manpower to handle the influx of real time data.
Workforce of the future
Finding the right employees to fill open roles continues to be a challenge for middle-market companies. The emergence of big data has created huge demand for skilled workers, but low unemployment rates and a strong economy can make it difficult for companies to win that talent.
As industry, government and academia are working together to prepare the future workforce, some companies are turning to non-traditional sources to find talent, such as finding talent directly from code academies or apprenticeship programs. Others are paying for current employees to advance their education. Human resources departments are using big data not only to make more informed decisions about productivity, resource distribution, and recruiting needs and sources, but as a tool for engaging with employees on ESG, culture and training. Long-term sustainability and ethical impact are increasingly critical factors in attracting Millennial workers.
The new year presents opportunities for companies to make the most of their resources. Businesses building ESG strategies can help capitalize on opportunities, while mitigating risk and improving long-term sustainability and ethical impact. And, middle-market companies are harnessing the latest technological advances and appealing to the changing workforce needs to attract and retain skilled workers. Leaders who embrace these technological advances will reap the rewards of increased efficiency to help boost their bottom line.
John Pajka is a Bank of America vice president for business banking in Worcester.
