SMEs to spend £35,000 in 2022 to address productivity crisis
As the government looks for solutions to address the UK’s ongoing productivity crisis, new research1 from Nucleus Commercial Finance reveals that SMEs, on average, are preparing to spend nearly £35,000 in 2022 to improve their productivity.
According to the research four fifths (80%) of business leaders plan to take significant steps to improve productivity next year. On average, medium-sized businesses (50-249 employees) plan to invest almost £48,000, small businesses (10-49 employees) will spend £38,000, followed by £20,600 and £7,400 for micro businesses and sole traders, respectively. However, a fifth (20%) of SME leaders have no plans to take any action at all.
To improve productivity, a third (32%) of SMEs are planning to introduce more flexible working, three in 10 (30%) will improve the business’ IT, while over a quarter (27%) will invest in digital skills training. Additional solutions to improve productivity include:
More staff training – 27%
Investment in employee engagement tools – 23%
Redefining team roles – 22%
Investment in new machinery – 20%
New time management tools – 19%
Despite the encouraging signs that SMEs want to proactively address this crisis, they recognise that there are major barriers in their way. A quarter (24%) of business leaders said they do not have access to the right people or resources to take the necessary steps to improve productivity. A similar amount (22%) are concerned about the cost of this investment, while a fifth (19%) feel they do not have enough time to develop a comprehensive strategy to address this issue.
Chirag Shah, CEO, Nucleus Commercial Finance, said: “Resolving a country’s productivity crisis is not a quick fix; it takes years of economy-wide investment and innovation. 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.”