SMEs could hire 3.5 million this quarter, says Barclays
Thu 24 Aug 2023
UK small and medium sized businesses (SMEs) could help bolster employment by hiring as many as 3.5 million people this quarter. Businesses that anticipate employee growth are planning to hire eight new recruits on average before the end of September.
This is according to data from the latest Barclays Business Barometer, indicating a growing confidence in the economy.
Colin O’Flaherty, Head of SME at Barclaycard Payments, said: “It’s promising to see that SMEs are feeling more optimistic about revenue growth and are eager to invest in cutting-edge technology to future-proof their companies. Retail SMEs in particular have displayed a remarkable agility in adapting to evolving consumer behaviours by adopting emerging technologies – setting the stage for a brighter year ahead.”
Nearly three-in-five (57%) reported revenue growth last quarter, marking the highest level in 18 months. In fact, nearly two-thirds (62%) of SMEs see this trend continuing, predicting revenue increases in a year’s time.
These figures are supported by data from Barclays, which sees nearly half of the nation’s credit and debit card transactions, showing a rise of 1.08% in the volumes of transactions to SMEs in Q2 compared with the same period last year.
“Small businesses are vital to the UK economy and play a key role in supporting employment, so the employee growth projections are also really encouraging for both business stability and economic prosperity,” added O’Flaherty.
Ramping up innovation
Against a backdrop of rising interest rates, businesses are embracing innovation to mitigate rising costs and maintain their competitive edge.
To accomplish this, SMEs are turning to technology investments to increase productivity (45%), as well as future-proof their company (44%). Notably, businesses investing in innovation are committing, on average, nearly half (48%) of their annual revenue to technology.
“Ramping up tech investment should be a top priority for SMEs, particularly with the rise of AI and automation dominating the global business agenda. Despite all the hype, far too many businesses still operate using outdated, manual systems for key functions such as sales and marketing, putting them at risk of falling behind when it comes to meeting customer expectations in the future,” said Sjuul van der Leeuw, CEO of Deployteq.
British retailers in particular are confident about growth over the next year, with 8 in 10 (85%) reporting a positive outlook when compared to the last 12 months.
In fact, Barclays found that two-thirds (66%) of retail SMEs are open to embracing new technology while, over two-fifths (41%) have established dedicated technology teams within their business, each employing 13 people on average.
“While it’s encouraging to hear that SMEs are putting tech investment at the top of the agenda, the reality is that many ambitious companies are still struggling to get access to the investment they need to take their business to the next level. From securing a credible valuation to getting a chance to pitch their proposition to investors, far too many entrepreneurs are missing the big chances that could turbocharge their organisation. This culture has to change if we want to unleash the true potential of our SMEs and create a business culture that backs the next generation, rather than ignoring it,” said Steven Mooney, CEO of FundMyPitch.
Retailers are turning to technology to keep up with the demands of high-street shoppers, with recent Barclays research finding that 7 out of 10 consumers use the Internet to inform how they shop and make savings. For example, online grocery websites have seen an increase of 54% in online traffic, with traffic to non-grocery up by 42%.
Almost all (93%) of retailers say that harnessing data is key to their future success. The past year has seen retailers already actively investing in cutting-edge technologies to enhance operations such as data analytics (18%) and artificial intelligence and machine learning (12%).
“It’s encouraging to see SMEs put tech investment at the very heart of their business strategy, particularly against the backdrop of stubborn inflation and soaring interest rates. The UK is home to some of the most exciting and incredible businesses on the planet, yet many are still way behind when it comes to getting access to funding and scaling up through cloud technologies. By prioritising investment in tech, the next generation of SMEs can grow rapidly, creating jobs and boosting the value of UK PLC,” said Josh Boer, Director at tech consultancy VeUP.
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