Just 14 per cent of UK SMEs claim productivity is not an issue, new research from Opus Energy reveals, highlighting the fact that small and medium businesses are struggling with efficiencies. As a result, SMEs are re-looking at business processes and are implementing a wave of changes to help nurture and inspire their employees, with wellbeing measures such as flexible working the most popular tactic for 40 per cent.
Monetary rewards remain a popular driver, with 35 per cent of SMEs offering bonuses and perks, and a further 30 per cent saying they pay above average – a considerable undertaking for many small businesses. For micro businesses, this was less possible, with just 20 per cent offering better pay, compared with 41 per cent of businesses sized 50+. Micro-businesses compensated by offering better flexible working opportunities than their larger peers, recognising the need to offer talent lifestyle benefits.
An alternative solution to address poor productivity was location benefits, with over a fifth (22 per cent) of SME owners setting up their businesses near other, likeminded businesses to capitalise on a culture of innovation. This included 12 per cent of SMEs sharing office space, with benefits such as idea generation cited. When asked specifically about working closely to rival businesses in the same sector, 56 per cent of SME owners thought it would help their business commercially and productivity-wise, due to the competition spurring them on. The ability to tap into ready-skilled talent (22 per cent) and networking plus idea sharing (28 per cent) benefits were also cited as reasons to work in close proximity to rivals in business clusters, a concentration of interconnected businesses, suppliers and institutions in a particular field.
Nikki Flanders, Opus Energy COO comments, ‘With a vast 86 per cent of SMEs saying they’re struggling with productivity issues, the gravity of the situation has meant that businesses are now changing their approach and putting their employees first. This is definitely the right approach, as employees drive businesses forward and provide the foundations for success. It’s good to see small businesses engaging their employees and implementing measures to help talent be at their best, as this in turn will enable them to perform at their optimum in the workplace.’
‘It’s also encouraging to see small businesses considering the importance of location. We have found that opening our offices in regional hotspots or clusters for certain skills has helped us recruit more quickly and enabled us to hit the ground running. For any small business, cost and convenience will of course be major drivers in determining where to start out, but I urge small business owners to rethink this approach, as businesses need to become savvier when recruiting. With millennials increasingly becoming more particular about where they work and Britain currently experiencing a low unemployment rate, businesses need to be strategic on how they recruit, and location could just be the clincher.’
To help entrepreneurs identify relevant business clusters which they could join, Opus Energy has created an interactive map outlining the UK’s most successful business clusters, including key information such as costs, employment rates and average wages. For more information, click here.