UK SMEs are strongly positioned to enter 2021 as they’ve been better prepared for remote working, less distracted by cyber attacks, and less held back by skills shortages than their larger corporate rivals since the March COVID-19 lockdown. They’re now planning for future tech investment and growth at a much higher rate than larger corporates, finds the world’s largest technology leadership survey.
In an increasingly digital world, the study found that UK SMEs are almost three times more likely (49% v 18%) to increase technology investment, and twice as likely (50% v 24%) to recruit tech professionals than larger corporates over the next 12 months.
The 2020 Harvey Nash/KPMG CIO Survey, the largest technology leadership survey in the world with over 4,200 responses, provides more insight into the key areas that have meant that smaller UK firms are now better positioned for investment and growth than larger corporates:
- Cyber criminals have targeted larger firms – Almost 50% more large corporates than SMEs in the UK have reported an increase in cyber attacks since moving staff en mass to remote working in March.
- Smaller firms were ready to go remote – Over four in ten (41%) UK SMEs reported that all of their key workers could work remotely effectively even before the pandemic hit the UK – but none of the larger corporates were in this position. In fact, over two thirds (70%) of SMEs reported that over 75% of their key workers could work remotely effectively compared with only 40% of large corporates pre COVID-19.
- Smaller firms are less impacted by skills shortages – Around a third (28%) fewer UK SMEs than larger corporates report that skills shortages are preventing them from keeping up with the pace of change.
- SMEs ready to make longer-term planning decisions – Almost a fifth (17%) more smaller firms than larger corporates already have an accurate view of the future to enable them to make longer-term planning decisions. At 44%, the Investment Management sector is the UK’s most confident industry sector for already having an accurate view of the future.
- Small firms can scale up and down faster – Twice as many SMEs (23%) as larger corporates (10%) are extremely or very effective at scaling good ideas and stopping poor ideas quickly
Bev White, Chief Executive of Harvey Nash Group said:
“Covid-19 has posed significant challenges to whole swathes of businesses, both large and small. But the picture we now see emerging is that nimble SMEs are in many ways better positioned for recovery and growth than their larger counterparts. This also extends to their ability to attract talent. In the past, employer brands were often strongly tied with physical assets, like impressive head offices and fantastic facilities. But Covid-19 has removed the pre-eminence of such things, and created a more level playing field for organisations of all sizes. It will be all to play for in 2021.”
Remote working and the new deal for employees:
- Remote investments – As businesses remain largely working from home, around half (49%) of smaller firms are planning to invest more in technology to ensure that they’re serving customers more safely and effectively, with the top three most important technology investments in this new reality being: security and privacy, customer experience and engagement, and infrastructure/cloud.
- Remote working is here to stay – 84% of SMEs have moved a significant part of their workforce to remote working as a result of COVID-19. Over two thirds (68%) expect 30% of their enterprise to remain predominantly working from home post COVID-19, with well over two thirds (43%) expecting over 50% of their workforce to remain largely working from home.
- The new deal for employees – With large numbers of staff continuing to work from home, the survey also found that the most important factors for both large and small firms in engaging and retaining key technology talent are also changing, with ‘a strong culture and strong leadership’ the most important factor – ahead of ‘good remuneration’ and ‘career progression opportunities’. Leaders will therefore need to rethink how they attract and engage their employees in a world where physical location is no longer a prime asset.
Bev White concluded:
“Recent news of a potential vaccine has certainly delivered a dose of greater optimism about the future. But any economic recovery is hugely dependent on activity on the ground in small and medium sized enterprises up and down the country. With Covid-19 tipping the scales towards these smaller businesses, the signs are that they will be in a strong position to deliver.”