Productivity the big challenge for SMEs

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By Joff Sharpe, Head of Operations at British Land and responsible for flexible workspace brand Storey 

SMEs are the backbone of the British economy: they account for 99.3% of all private sector businesses, and by 2020, their contributions across the top 10 UK cities are expected to exceed £217 billion. But for all their importance and success, there remain opportunities for improvement. Productivity, for example, is an area where the UK’s recent history has been one of underperformance. At 18 percentage points below the average of the other six G7 nations, it is the worst it has been since records began.

So what contributes to this disparity – and what can SMEs do to boost it?

At Storey, we recently compiled a report that asked 500 decision-makers at UK SMEs – mostly based in privately-let offices and co-working spaces – for their opinions on workplace productivity. The results were very illuminating, highlighting an industry that’s aware of the performance gap and cognisant of its causes.

How important is productivity to UK SMEs?

Productivity may be an ongoing issue for British SMEs, but that doesn’t mean they don’t take it seriously: in fact, 76% of respondents considered it when setting up their offices.

So what would improve it?

A number of factors are at play. For example, those surveyed demonstrated a clear frustration with the state of their office space: some 69% said that improving the design and layout would lead to improvements in overall productivity, and 40% said that having a communal breakout area would positively influence their team’s ability to work at their highest level.

A harmonious and appealing office space can have a dramatic impact on wellbeing and productivity. When an employee doesn’t have to navigate an unpleasant layout or a claustrophobic desk setup, they’re more likely to be comfortable enough to do their best work.

IT and internet issues

Other issues are having a rather more immediate impact: A staggering 47% of those surveyed reported that internet outages were their biggest productivity blocker, and 46% complained of slow connections in their offices. This figure increased when restricted to co-working spaces, with 64% reporting internet issues.

Improving office internet connections could therefore create significant productivity gains. SMEs recognise this – some 36% actively desire a faster internet connection – but this is often out of their hands. Because of their office facilities, many cannot access fibre cables, effectively locking them out of the best and most reliable speeds that are increasingly critical for sustained business growth.

Time, resource management, and the future of work  

Too often, small businesses simply don’t have the time to be small businesses. Over half (52%) of SME decision makers and managers spend more than 11 hours on office related admin every month. Our report’s most striking findings may however not be the figures, but the stories. They say the plural of anecdote is statistic, and the anecdotes we heard in interviews paint a wider picture of an economy where the leaders of UK enterprise and their employees are spending time fixing the dishwasher and the coffee machine instead of focusing on operational improvements and revenue-generating activities.

SMEs have limited resources and face numerous challenges that hamper their productivity and ability to succeed. This research shows that many of these relate to the management of the office distracting key staff from their core jobs. In order to perform as well as possible, it is absolutely key that SME leaders and decision makers aren’t wasting time on administrative issues. For small businesses, internal resources are valuable and need to be used where they count.

Download the full flexible workspace productivity report here.