Productivity performance of SMEs is the weakest link in the UK Economy

Productivity performance of SMEs is the weakest link in the British Economy

The Public Sector and SMEs are the main two laggard sectors which have refused to become more Productive & efficient for the last decade.

Why are SMEs such laggards?

·SMEs invest relatively little in their Staff Training and for their Management.

· SMEs are relatively complacent, with less ambitious profit-improvement targets.

· Poor Management, Motivation and direction of staff.· Poor use & application of new technologies (NOT Expenditure).

· Inability to measure / record / target Productivity improvements.

· Poor collaboration amongst SMEs to cooperate, work together and learn from one another.

· Few SMEs understand the importance of Productivity, being the cornerstone of Profitability growth, only 1/3rd of SMEs even measure Productivity.

When it comes to working practices linked to Productivity, PRESENTEEISM – employees who are present, but not engaged in Productive work – and absenteeism are well-known causes of Productivity loss.

In a recent study British employers lost on average 27.5 days of productive time per employee each year, or more than 10%, which costs the UK economy £73 billion each year in lost productivity.

Despite its’ high cost, UK SMEs are the least likely employers in Europe to take measures to improve Presenteeism. Just 19% of UK SMEs have taken steps compared to 26% of German SMEs and 29% of French SMEs.

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