Three items must be top of agenda for every business owner or board so they can navigate a challenging 2024.

Despite some recent green shoots, the Australian and international economy is suffering in a way that is reminiscent of the global financial crisis (GFC).

Money is tight and banks are cautious about lending. The Australian economy had three very anemic gross domestic product (GDP) quarters, cost of living remains high and some industries – including food production, discretionary retail, manufacturing and construction – are nominally in recession.

All indicators are flashing red. Household savings are at an all-time low of 1.1 percent, worse than during the GFC, and at the same time credit cards are maxed out again after a lull during the COVID-19 pandemic.

This is brewing as businesses come out the back of the trickiest time of the year, when the holiday period interrupts cashflow for many, exacerbated by holiday leave and lower production.

To handle these conditions, business leaders must focus on three key issues in 2024 – improving productivity, coming to grips with the rapid advent of AI and a being alert to a looming workplace mental health dilemma.

Productivity is Paramount

Productivity, long a conundrum for businesses across the globe, must be addressed. Productivity is the biggest driver of GDP.

The last big boost to productivity was when business transitioned to emails from fax machines. Declining productivity hits every business and workforce, and we are looking for the next big boost.

That boost has fallen into our laps at the right time – the best way for businesses to improve productivity is to become fast followers (as it’s too late to claim early-adapter status) of AI.

Businesses should create a team within their business to stay on top of AI, because AI will redefine the business landscape by 2030.

No matter your business size, you cannot afford to sit back and see what happens or you’ll be quickly left behind. AI will be a total game changer when it comes to productivity.

If you don’t embrace it and invest in it like your life depends on it, your business is unlikely to be around by 2030. If you were still using faxes 10 years after the internet came along, you were a dinosaur and probably out of business. AI is like that tech transition, on steroids.

With AI, business owners will have two choices – reduce your cost base and keep the same revenue, or use AI to improve productivity and grow your business.

It’s the ultimate productivity tool, but it’s coming so quickly that businesses need to start looking at this right now because it is moving at a pace that we haven’t seen before. If you’re not on board with this, if you’re not aggressively looking at what AI can do for your business, your competitors will be doing it and they’ll be streets ahead.

Every business should be creating a team to champion how the business will use – and navigate the use of – AI. This person or team should just start researching, and create a monthly report to the board (or in smaller businesses to the owner or management team) highlighting AI developments that could be beneficial or disruptive to the individual business.

This will allow businesses to keep up with news, risk management issues, new apps and business applications when it comes to AI.

Look After Your Team

The human element of productivity and AI is crucial and is intertwined with the looming delayed mental health impact of the pandemic. Productivity means you’ve got a healthy population turning up to work, motivated, enjoying their work and with the tools they need to get the job done.

We see workforce tiredness and stress in every single turnaround client we help, and we have done for the past two years. Workforces are in second gear. It’s the stress from the pandemic and the resulting health and emotional impacts on people, coupled with the current financial pressure on families.

A lot of the issues that turn up in the workplace stem from home, and we’re going to see that play out in the workforce in 2024. All this is set to make productivity even worse. Statistics indicate sick days and leave days are up. On the back of record low productivity and the other markers, this is highly concerning.

Management teams should offer and encourage staff to take yoga lessons, breathwork and meditation classes, cold plunges, saunas or whatever stress-relieving activities work for them.

These can be offered, say, once a month, but what you will find is people will take these up personally because they feel much better afterwards. It helps if management suggests to staff to build in some of these practices as part of their personal development plan for 2024.