SME productivity in the UK: the next steps for growing IT firms
by Heat Recruitment
Small and mid-sized businesses are the backbone of the UK economy. Contributing around 51% of the nation’s GDP and employing roughly 59% of the workforce, it’s clear that SMEs have a pivotal role to play in economic recovery and future performance. However, as our official exit from the EU draws ever closer, uncertainty and instability are fuelling inertia within a number of companies and are undermining overall efforts to improve productivity in the UK.
For growing IT firms, solving the productivity puzzle is a top priority. It is a key means of improving their competitive advantage and driving profitability. “Productivity isn’t everything,” said Paul Krugman, Nobel prize winning economist, “but in the long run, it is almost everything.”
This is certainly true for the IT sector, an industry now worth an estimated £58bn per year in the UK. Since 2010, 14% of the growth in the number of micro-businesses can be attributed to IT startups, and the sector shows no signs of slowing down. As technological innovation continues to reduce the costs of market access, small tech businesses are able to compete with well-established firms and create new sources of employment.
To tackle the issue, a group of business leaders are coming together to launch a campaign to ensure SMEs are “match fit to compete post-Brexit.” The group, led by chairman of the John Lewis Partnership Sir Charlie Mayfield, aims to close the growing productivity gap between Britain’s most successful businesses and the under-performing majority. Under the umbrella organisation ‘Be The Business’ which formed in mid-2017, leaders from 12 top companies are to establish a digital platform where practical advice can be acquired on improving productivity.
Alongside this, a mentoring programme supported by 100 senior staff from companies such as Siemens and GSK is to be made available for UK SMEs. The launch event is set to take place at the Bank of England in May, where leaders of the group will outline their plans to create a new executive education initiative. This forum will be targeted at the leaders of small businesses and will include a series of custom tailored strategies for companies to adopt.
However, if these IT firms are to succeed in the long term, they must look to the causes of stifled productivity within their companies and seek solutions to prevent stagnation. One area in need of improvement for smaller IT businesses in the UK is talent development and employee retention. All too often, leaders in this vibrant industry focus on expanding their services without considering how to prepare employees for change or ensure they are fully committed in driving success.
As technology continues to evolve, firms in the IT sector are expected to lead the way in the adoption and integration of new products or services. This will only be possible, however, if adequate training is provided to staff throughout these firms to enhance their skills and prime them for the trends of tomorrow.
With the launch of this new productivity initiative in the UK, growing firms are set to benefit from additional mentoring and invaluable advice from experts. IT entrepreneurs may understand the importance of their employees, but with further support through tailored programmes, they can finally harness their true potential.
If you’re looking for your next IT role, or are an employer seeking the most effective talent possible, get in touch with our dedicated team at Heat Recruitment today.
By Amber Rowbottom