Why Tech & Talent Is Critical for the Long-Term Success of SMEs
The long-term success of small and medium-sized businesses (SMEs) can be dependent on accessing the right technology and talent - 57% of business owners believe that making the best use of tech is a fundamental part of progress, according to our research report ‘UK SMEs: Brexit and Beyond’. Plus, 35% of SMEs say talent is the factor with the biggest influence on their success.
But technology and talent are as elusive as they are important. They happen to be two of the most variable and unpredictable elements in today’s economy. New tech is released at an astonishing rate – and it can be difficult to decipher what will have a positive impact on the business and what will disappear just as quickly as it arrived. Similarly, the labour market fluctuates according to educational policy and generational change. Today, skills present a real challenge, as does the political reality of Brexit, which could prevent UK businesses from accessing international talent.
In this blog post, we are going to discuss the twin issues of tech and talent, and the opportunities they provide for SMEs who keep pace with them.
The Benefits of New Technology are Clear
Our SME respondents made it clear that they’re aware of the huge benefits tech can bring to all aspects of their businesses:
- 58% agree that tech can improve efficiency
- 38% agree that tech can improve the security of their business and customer data
- 37% agree that tech can help them save money in the long run
In fact, one of the key findings of the report revolved around the extent to which SMEs feel confident in tech’s ability to impact their bottom line. The majority of small business leaders (56%) believe technology will enable their business to generate more revenue – which is ultimately the priority for any enterprise.
And this belief in tech is backed up by action – in some areas. 55% of SMEs are using technology to help manage payroll, and 49% are employing tech for accounting. A further 47% utilise cloud collaboration tools.
But while the majority of small businesses apply tech to these kinds of internal processes, they are failing to use tech to gain business insights. This is one of the biggest benefits that tech can bring: it helps you to understand how your business works, so you can make it better.
According to our report, less than a quarter (23%) of SMEs currently use business intelligence tools. These tools facilitate the sharing of information across different departments in your organisation, leading to improved efficiency and increased levels of productivity. Consequently, being without them is a serious disadvantage – especially for small businesses competing with big corporations.
And yet, almost the majority of SMEs (48%) don’t plan to use business intelligence software in the future. This stands alongside the 48% who don’t plan to use enterprise resource planning, and the 37% who don’t plan to use tech for customer relationship management.
So, it seems that, while SMEs recognise the value of tech, they are only utilising it in certain areas of their business. Intelligence tools are overwhelmingly neglected, meaning that small businesses are missing out on one of the biggest advantages tech has to offer.
So, what’s holding them back?
Barriers to Adopting New Tech
When it comes to adopting new technology, there are some factors inspiring caution in SMEs.
- For 57% cost is a prohibiting factor
- For 33% there are fears about the reliability of new technology
- For 33% there aren’t enough skills within the business to support the new tech
- Plus, a further 33% think that some types of new tech aren’t suitable for small businesses
Cost is clearly the main barrier for many SMEs looking to adopt new tech. Smaller organisations typically have fewer financial resources, so the huge outlay demanded by some technology implementations can be intimidating.
Of course, these concerns are only heightened by the uncertainty surrounding Brexit. With the future so unclear, many small businesses are unwilling to commit to a large tech investment – even if they feel that they desperately need it.
The Talent Trap
Skills are another significant barrier that SMEs come up against when they look into new tech. A third believe the people within their enterprise do not possess the digital skills necessary to make the most of it. And what good is the right technology if it can’t be used properly?
Clearly, a business can only reach its full potential when it has the right people on board. This explains why 37% say recruiting is their priority in the years ahead. Bringing skilled employees into the organisation will unlock the benefits offered by technology – and it will make the organisation stronger as a whole.
SMEs plan to recruit an average of 29 people in the next 12 months, with Yorkshire and Humberside (47), London (45), and Northern Ireland (38) planning to add even more. This is positive news for the labour market – as long as businesses can actually find the talent they need in the midst of the digital skills shortage, which is set to cost the UK economy £21.8 billion over the next decade.
And of course, it’s worth remembering that two-fifths (41%) of business leaders believe Brexit could impede them from recruiting the right talent in the future. If the UK continues to struggle to develop its own digital skills, businesses need to be able to look for talent abroad. Whether this will be a possibility remains to be seen.
Moving Forward with the Right Attitude
Ultimately, a small business needs a combination of technology and talent in order to grow.
Accessing the benefits of business intelligence is difficult unless the organisation possesses the right digital skills. And in a time of skills shortage, recruiting tech-savvy individuals is tricky.
But SMEs have taken an important step in acknowledging the value in both tech and talent. Throughout our report, small business leaders demonstrated a clear understanding of the power of both factors in deciding future growth.
With this mind-set in place, it’s only a matter of time before SMEs find a way around the barriers they’re facing – Brexit included.
To find out more about the outlook for UK SMEs after Brexit, download the report.