New Zealand Businesses Face Rising Global Risks, Warns BDO Report

Businesses in New Zealand are being urged to adapt to evolving global risk factors, including increasing regulatory pressures, fraud, and geopolitical tensions. This guidance comes from the latest New Zealand Risk Landscape Report published by the consultancy firm BDO. The report highlights a growing trend among business leaders who are becoming more risk-averse while navigating complex issues.

Key Findings on Global Risks

According to the report, regulatory risk has emerged as the foremost concern for businesses not only in New Zealand but worldwide. Following regulatory challenges are risks associated with fraud, geopolitics, talent acquisition, environmental issues, cyber crime, competition, and technology. Tarunesh Singh, a partner at BDO, noted a significant shift in business sentiment, stating, “Businesses are becoming more cautious and very much compliance driven.”

Singh explained that the focus has shifted from resilience and recovery to managing complexity and avoiding potential missteps. He cautioned that this heightened caution could hinder innovation and growth. “What we’re seeing is a steady rise in regulatory complexity,” Singh emphasized, pointing to the increasing number of rules and regulations businesses must navigate on a daily and yearly basis.

Fraud and Talent Acquisition Challenges

Fraud emerges as another critical risk that businesses must address. Singh commented, “There is definitely fraud happening,” highlighting that BDO’s work increasingly involves formal investigations into known fraud issues. He characterized the type of fraud being observed as “opportunistic,” with incidents often arising from within organizations. While Singh acknowledged that current economic conditions might contribute to rising fraud levels, he reassured that New Zealand remains a “very clean, good place to do business.”

On the front of talent acquisition, Singh pointed out the difficulties firms face in attracting the right candidates, despite a competitive labour market and rising unemployment. “We’ve had a huge amount of disruption, and we’ve had people moving from job to job,” he noted. Additionally, he referred to a concerning trend of ‘brain drain’, where young professionals are relocating to Australia and elsewhere in search of better opportunities. “Many younger people, who have been sitting tight during the Covid-19 pandemic, are now understandably looking to move offshore and gain experience,” Singh stated. This trend is exerting pressure on employers’ ability to secure the talent they need for their operations.

As businesses navigate these complexities, the BDO report serves as a timely reminder that adapting to the shifting landscape of global risks is essential for sustained growth and success in New Zealand’s economy.