Only one in ten businesses concerned about weak productivity
An overwhelming 90% of UK SMEs are worried for the future of their business, but only 7% plan to focus on productivity challenges in 2018, according to a new survey commissioned by HSBC Commercial Banking.
An economic slowdown in the UK, coupled with the unknown effects of Brexit, are the top two concerns for small businesses, the survey shows. Growing sales in current markets and retaining current customers are their biggest priorities.
And while weakened UK productivity is a huge concern for the Government, just one in 10 small businesses are concerned about weak productivity.
Businesses in the transportation and distribution sector are most concerned about weak productivity (20%) followed by those working in real estate (19%) and the legal sector (18%).
HSBC’s survey comes after UK Chancellor Philip Hammond boosted the national productivity investment fund to £31 billion, aiming to deliver the infrastructure, research capabilities and housing British workers need to boost their efficiency.
According to the ONS, UK productivity has fallen to pre-crisis levels.
Amanda Murphy, Head of Commercial Banking at HSBC UK, said: “Given the ongoing decline in UK productivity, and the emphasis the Government is placing on reversing this trend, we were surprised to see that just 7% of small businesses plan to prioritise productivity for action next year.
“This suggests we may need to redefine how we talk about productivity to make it more meaningful to businesses, but also that small businesses may need to think about efficiency at a more strategic level.”
With growth and export opportunities on the agenda for SMEs during the coming year, increasing productivity will help them remain competitive on an international scale.
The research suggests workplace culture can be a key factor in increasing productivity.
For example, businesses offering employees the opportunity to work flexibly are also more productive. In fact, UK workers consider having the option of flexible working to be more motivating than financial incentives.