More than two thirds (68%) of small and medium sized enterprises (SMEs) report their productivity is being constrained by the current external environment, according to MYOB’s latest Bi-Annual Business Monitor.
Fuel pricing (41%), cost of utilities (38%) and interest rates (30%) are putting the most pressure on SMEs, and more than a quarter (27%) say price and margin profitability is weighing on their business performance. Respondents currently rate themselves a 6.2 out of 10 for productivity.
The survey of 1000 SME owners and operators, released by business management platform MYOB, reveals 34% believe improving skills and training programs would boost employees’ productivity, followed by government grants to improve skills and training (31%) and government grants to help businesses improve access to and use of technology (29%).
Small businesses will need to focus on productivity as they face a tightened economy in the year to come, according to Emma Fawcett, General Manager SME at MYOB.
“The nation’s 2.5+ million SMEs have shown resilience throughout the last few years, and with further difficulties anticipated as the economy stabilises it will be important to review their business productivity to ensure they are setting themselves up for security and growth.”
The research indicates that while SMEs want and need support from the government around skills programs and training to improve their productivity score, there are other ways businesses can boost their output.
Twenty-one per cent of respondents have digitised more of their operations in the last 12 months and, of those that have, 39% have been more productive as a result. Thirty-four per cent of those who have increased their digitisation say it helped them to work remotely and collaborate.
“Digital capabilities are closely linked to productivity, helping SMEs save time, money and improve accuracy in their business operations, as well as drive economic growth in uncertain times. Despite the benefits it brings to the bottom line, cost remains a barrier for 24% of respondents.”
The top investments SMEs are looking to increase are prices and margins on products and services sold (30%) and the amount they pay employees in their business (24%).
“The investments reflect the environment, with SMEs looking to adjust their margins where they can. Employee numbers will hold steady for most, with 78% not looking to make changes to the number of full-time employees and 72% keeping the same number of part time or casual employees.”
Throughout the Bi-Annual Business Monitor, success markers indicate limited growth for SMEs in the year ahead. About a quarter of the survey respondents have seen both revenue (22%) and profitability (26%) growth in the last year. Twenty-seven per cent expect their business revenue will be up in the next year and 28% expect an increase in profitability. Forty-five per cent anticipate economic decline in the coming 12 months.
“This challenging period is not yet over for the nation’s SMEs, so any emphasis they can put on driving productivity and boosting their performance will hold them in good stead. As contributors to 99% of the nation’s GDP it will also help build a stronger economic outlook.”
ENDS
For further comment or other information please contact:
Sarah Green, Character + Distinction, sarah@ofcharacter.com
Selina Ife, MYOB, selina.ife@myob.com
About MYOB
MYOB is a leading business management platform with a core purpose of helping more businesses in Australia and New Zealand start, survive and succeed. MYOB delivers end-to-end business, financial and accounting solutions direct to businesses employing between 0 and 1000 employees, alongside a network of accountants, bookkeepers and consultants. For more information visit myob.com or follow MYOB on LinkedIn.
About MYOB Business Monitor
The MYOB Business Monitor researches business performance and attitudes regarding areas such as profitability, cash flow, pipeline work, technology usage and the government. This report presents the summary findings for key indicators from the MYOB Business Monitor comprising a national sample of 1,047 business owners, managers and directors (operators), conducted from 25 March to 22 April 2024. The businesses participating in the online survey were both non-employing and employing businesses. All data has been weighted by industry type, location and number of employees, which are in line with the Australian Bureau of Statistics (ABS - Counts of Australian businesses, including entries & exits - 8165.0).