One third of SMEs are expected to hire in 2021, creating 1.2m jobs in Britain.
Renewed optimism is the driving force behind these hiring plans, with an added desire for SMEs to grow their workforce diversity and prioritise employee wellbeing. In the UK, there will be a bigger focus on ways of working and employee wellness, with 37 per cent looking to improve physical wellness.
According to research from Sage, businesses expect to return to pre-pandemic profitability by Q4 2021. This is down to increased consumer confidence and greater efficiencies.
Three quarters of SMEs surveyed are optimistic about the future of their business and growth trajectory in the next year. This optimism is mainly driven by the vaccine rollout programme (45 per cent), being able to see customers again (35 per cent) and projections of increased consumer spending (32 per cent). Over eight in ten don’t expect there to be another lockdown, with most feeling they’ll return to pre-pandemic levels this summer – both in terms of profitability and staffing levels. A huge 79 per cent of UK SMEs believe they’ll be back to profitability by the summer.
An ability to adapt has been crucial during the pandemic. Many (60 per cent) SMEs say they have coped well with all of the barriers that Covid-19 has presented and made significant changes accordingly. Over a third (35 per cent) of UK SMEs said they cut overhead costs because of further financial barriers, 25 per cent said they relied on their own savings to make it through.
More businesses now rely on technology for greater efficiency. In the UK, 52 per cent used new technology to sell more and stay connected with customers or improve how their business operates.
Steve Hare, CEO of Sage Group commented: “As the economic environment improves, optimism amongst our customers is increasing and as is their confidence to capitalise on the opportunities ahead. SMEs are accelerating investment in people and digital technology, prioritising flexibility, resilience, and productivity. This is a clear sign they will bring the bounce back into the economy, and why they need to be at the heart of any recovery plans.
“We must make sure this swell of optimism is given the opportunity to become a tidal wave of growth. We have called on governments for support and investment to accelerate the recovery of SMEs during these difficult times and made our own investments in supporting an SME led recovery.”