SMEs plan to invest in productivity next year
80 per cent of business leaders plan to invest to improve productivity next year with companies on average preparing to spend nearly £35,000 to do so, research has revealed.
Nucleus Commercial Finance’s survey of 500 small- and medium-sized enterprises (SMEs) has found that to improve productivity, a third (32 per cent) of SMEs are planning to introduce more flexible working, 30 per cent will improve the business’ IT and 27 per cent will invest in digital skills training.
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27 per cent of SMEs plan on investing in more staff training and 23 per cent will invest in employee engagement tools. Over a fifth (22 per cent) aim to redefine team roles, 20 per cent plan to invest in new machinery and 19 per cent want to purchase new time management tools.
On average, medium-sized businesses (50 to 249 employees) plan to invest almost £48,000, small businesses (those with 10 to 49 employees) will spend £38,000, followed by £20,600 and £7,400 for micro businesses and sole traders, respectively. However, a fifth (20 per cent) of SME leaders have no plans to take any action at all.
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Despite SMEs’ plans to improve productivity next year, a quarter (24 per cent) of business leaders said they do not have access to the right people or resources to take the necessary steps to improve productivity.
This is followed by 22 per cent who are concerned about the cost of this investment, while a fifth (19 per cent) believe they do not have enough time to develop a comprehensive strategy to address this issue.
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“Resolving a country’s productivity crisis is not a quick fix; it takes years of economy-wide investment and innovation,” said Chirag Shah, chief executive of Nucleus Commercial Finance.
“While the government develops policies and initiatives to address this issue, it is positive to see that SME leaders are planning to take immediate action and invest significantly to improve productivity next year.
“These solutions will come at a significant cost in the short-term, especially if businesses are planning to improve their IT systems, invest heavily in training and buy new equipment. It is vital that these leaders have the right strategies in place to implement new solutions and, importantly, have the capital to fund this.
“It is therefore our role as the fintech and lending industry to ensure SMEs have access to fast and flexible finance to invest in their businesses both now and into the future.”
