More SMEs in the South West are measuring productivity than SMEs in the UK overall, according to a new report The Power of Productivity: The role of SMEs by Close Brothers Group.
23% of SMEs in the South East don’t measure productivity compared to 28% of SMEs in the UK overall. In addition, of those that don’t measure, over three quarters (79%) said they would consider measuring productivity in the future compared to 66% of SMEs in the UK.
The report, based on a survey of over 1000 SMEs in the UK highlights the extent of the productivity gap among SMEs and looks at ways SMEs can improve productivity in the future.
The topic of productivity has been an increasingly talked about issue in the UK as Brexit negotiations begin. The UK currently lags 16% behind the other G7 countries. High productivity supports economic growth, therefore in order to remain competitive with other G7 nations, the UK will be looking at ways to improve its productivity levels. A large part of this will be increasing economic output in key areas of the UK such as the ‘Northern Powerhouse’.
The Close Brothers Group report highlights that positively, UK SMEs are making efforts to improve productivity. Over half of SMEs in the UK have invested in new technology and software and one in four plan to do so in the future.
In addition efforts are being made by UK SMEs to improve staff training in order to upskill current employees and mitigate against any future staff shortages. Nearly half (44%) of UK SMEs are upskilling staff through training, education and workshops and half plan to invest in training in the future.
The report also highlighted the need for SMEs to be educated on measuring productivity, as this can help SMEs track their progress and improve output. 11% of the SMEs surveyed in the Midlands said they did not have time to measure productivity and a further 12% were uncertain how to measure it.
Measuring productivity can be difficult for SMEs who may have limited resources in comparison to larger organisations. A recent study by the University of Gloucestershire found that many UK SMEs were unsure whether their productivity had increased or decreased in the last few years. This was largely because they did not have the mechanisms or the information necessary to measure productivity efficiently.
Adrian Sainsbury, Managing Director of Close Brothers Group plc said: “SMEs need to understand how to measure productivity, otherwise it makes it very difficult to manage or improve output. This is particularly important as the UK prepares to leave the EU, amid its current productivity gap with many of its European peers.
“Given the vital importance of SMEs in the UK economy, and the role they can play in boosting productivity, considering how they might better measure and enhance productivity can only be a positive step forwards. This includes understanding the barriers they face and the positive actions they are already taking to combat productivity loss.”
Close Brothers is a leading merchant banking group, providing lending, deposit taking, wealth management services, and securities trading. Find out more about them here: www.closebrothers.com