If the media were to be believed, the only issue facing UK businesses right now is our country’s departure from the European Union. But, does the Brexit chatter covered by TV programming, online media outlets, and newspaper column inches accurately reflect what the leaders of the UK’s SMEs are actually thinking right now?
Following a simple survey of members belonging to the Academy for Chief Executives, conducted in September by its regional Chairs, a different picture emerged. Almost every member identified people as the biggest issue that will likely have an impact on the success of their business in 2018.
Several specific challenges were covered by this heading:
Recruitment: Recruiting enough people to support the growth of their business.
Skills: Finding candidates with the right quality talent, with the new skills needed for the demands of the business, and with the appropriate educational capability to learn and bring learning with them to the business.
Retention: Retaining people with the right skills and developing their talents.
Responses and Analysis: 400 Academy members, whose businesses represent over a £8 billion in revenue, and who are responsible for employing over 40,000 people, were asked to identify their top ten issues.
The following list was produced and ranked from their responses:
- Quality People – recruiting, retaining and developing
- Managing Growth and Change – access and cost of funding
- Government –competence, regulation and understanding of business
- Managing Uncertainty – wide geo-political and economic uncertainty
- Increasing Costs – regulation, commodities, wages and land
- Technological Change and Disruption – make the most from the digital economy
- Fostering Innovation– delivering results in a constantly evolving way
- Understanding Millennials – what drives them, how best to retain and develop
- Banks and Stock Market – trusting in the reputation of these institutions
- Security – physical and cyber
The supply of talented individuals needed to support any business growth proved to be a recurring theme.
A particular concern proved to be the need for youngsters to be equipped with the right skills and education before joining the labour market. Academy members are looking for people with a capacity to learn – people who can add value to a business through problem solving, creativity and leadership. There is a clear link here for many with regard to understanding the Millennials generation in their approach to work and their impact on the economy.
Business leaders taken part in the survey also seem to recognise the need to invest in training and development so as to maintain an engaged workforce with a shared purpose of delivering productivity, innovation and profitability. Parallel concerns were raised with regard to access to funding.
A further challenge that many SME’s face, is the ability to finance the growth opportunities that they have. There are currently too many hurdles to clear in order to get access to funding and finance – and this needs to be addressed if a business is to unlock its full potential. Many Academy members identify access to investment and funding as a key challenge in 2018.
Largely this can be achieved through improved understanding as to where funding is available. Investors, be they private or institutional, have an opportunity here both in terms of making UK businesses aware of sources of funding and in terms of raising awareness as to the returns that can be made.
On this theme, Academy members did highlight a lack of confidence in banks and the stock market. Trust in these institutions as the sources of long term investment capital is not high in the business community, and as such their reputation needs to be worked on. Higher levels of engagement between the financial institutions and smaller businesses is needed so as to improve understanding, and in order to develop a better appreciation of business needs.
There is a similar apprehension regarding the Government and HMRC. Perhaps not surprisingly in a very entrepreneurial community, the Government does not fare well in this survey. Respondents repeatedly stated that there is too much regulation at both local and central Government level, and took issue with aspects in both forms of governance. Concerns were also expressed regarding upcoming legislation such as GDPR, the lack of local planning officers to speed the process of property development, the lack of resources within HMRC to be able to process enquiries, and the constant changes to tax regulations and procedures that prove to be time-consuming and profit-sapping issues for small business.
It is perhaps too much to hope that HMRC should have empathy and understanding for business, but it there is a high level of expectation that local and central Government will look beyond Brexit and media-driven issues over the coming years, to remember the small business community.
Brexit proves to be an ongoing concern as part of a bigger political picture. Although Academy members did refer to Brexit as one factor under the heading of “managing uncertainty”, there was a general sense of acceptance at its happening; the focus instead was on getting on with building businesses, and dealing with the consequences of Brexit, both now and in the future, as they arise.
Instead, a greater degree of concern was more generally placed on the ongoing political disruption of the last three years. Namely, the referenda and general elections that have taken place both here and around the world. These have slowed general consumer activity, with for example, uncertainty on the USA’s international policy or changes in employment and tax law. This general climate of political uncertainty erodes consumer confidence in a way that effects small businesses beyond the discussions taking place between Michel Barnier and David Davies. A broader atmosphere of stability is now needed to bring an end to indecision in the business world.
The responses perhaps reflect the diversity of the Academy’s membership. There is a great variety of business activity represented in the surveys, with both commercial and not-for-profit organisations from a broad geographical spread. These members naturally place different emphasis on their business needs. But, while there are some fundamental differences between the respondents, there is a consistently unifying drive to make the most of the opportunities now made available through technological development, global markets, and an increasingly sophisticated and innovative workforce.
It equally seems clear that the key agendas for small businesses are not necessarily represented by the media’s dogmatic focus on the Westminster bubble and the FTSE 100. It would be naïve to entirely discount these as sticking points, but there is a much greater variety of issues facing Academy members over the year ahead that are not necessarily getting proportional coverage.
As an avid listener of the ‘Today’ programme, I have taken note of the contributors’ recurring calls for action – each morning there is a new cause being championed for social, political or economic action. Indeed, this concluding ‘call for action’ is true of all media with a political agenda; and, in the Academy we too ask, having gained an appreciation of a member’s challenge, opportunity, or dilemma: “what will you do now?”.
However, before any definitive action can occur, we at the Academy have learned the value of listening – really listening – so as to understand before we offer advice to be understood. After all, a call to action must be predicated by a full appreciation of what the dilemma is if it is to secure a truly successful outcome.
We would therefore ask the government – both local and central; centres of learning – schools, colleges and universities, and financial establishments – banks and private investors – to actually engage with SME leaders to listen to what they want and what they need, before drawing up the steps to address the problems discussed in this document today.
Indeed, there may even be an opportunity for these different institutions to learn from the community of business leaders who are already learning from one another, in a way that is wholly concurrent with the philosophy that is so important to the Academy and to its members.
Ian Price, Chief Executive, Academy for Chief Executives
Ian Price is Chief Executive of the Academy. He has a reputation and track-record for growing profitable businesses rapidly. His affable demeanour and relaxed style of working hides an exceptional talent at being able to focus on what makes a business tick.
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The Academy for Chief Executives
The Academy for Chief Executives is one of the UK’s leading coaching and mentoring organisations for senior executives. With more than 30 groups nationwide it aims to improve lives by unlocking the potential of every business leader.