It’s safe to say that this is a tumultuous time for British SMEs. Many have had to completely rethink their entire operational model.
By necessity, huge swathes of the nation’s workforce are grappling with the logistics of working remotely as we attempt to flatten the curve of COVID-19 infection. According to the latest data from the Office of National Statistics, around 8.7 million of the UK’s 32.6 million employed workers state that they are working from home. That’s just shy of 30% of the entire workforce.
However, while this may result in a variety of teething problems for SMEs there’s a silver lining of opportunity behind this seemingly bleak rain cloud.
As managing editor of UKs largest business magazine, Business Matters I’m often asked about my predictions for how the Coronavirus pandemic will affect small businesses in the UK. In some ways, at least, I’m cautiously optimistic. They say that necessity is the mother of invention. Could the current shake up to the current state of affairs be a blessing in disguise for SMEs?
Remote working was a good idea even before COVID-19
If large-scale remote working proves viable for SMEs in the long term, might we see a steady increase in virtualisation as offices eschew costly physical premises for digital infrastructures? I believe so. After all, this is a drum that I’ve now been banging for some time.
As I mentioned in this previous opinion piece, bodies and bums cost business money. Every employee needs a computer, a phone, a desk, a chair and a dedicated line. That’s an overhead of at least a grand per employee. Not to mention the cost of leasing a swanky urban serviced office.
Paying such overheads for the entirety of the workforce when at least some of them can work from home has always been anathema for small business cash flows. When the gears of business and commerce resume their usual speed, can we really expect SMEs to continue paying over the odds for services that are (at least partly) surplus to requirements?
The necessity of a leaner, more agile future
Make no mistake. SMEs are in for a rough ride, even when the lockdown is lifted and operations start to return to their former pace. Several weeks ago, the government issued a £330 bn support package for businesses which would allow them to keep their employees (even if they needed to be furloughed) and operate in whatever capacity possible to keep from going under.
For many SMEs, however, this may be something of a poisoned chalice. This government support comes in the form of loans administration through private sector lenders. Business rate holidays and Business Interruption Loans will be helpful in navigating these next few potentially perilous months. However, there’s a growing concern among SMEs that these measures are merely kicking the can down the road.
When loan repayments come due and the prospect of interest rates becomes more likely, businesses will need to ditch impediments to their cash flow in order to stay lean, agile and profitable in an altered business landscape.
Also the support provided by the government has totally missed out helping small business owners who received their income from their businesses in the form of a comparatively small salary via PAYE and then dividends from the company’s profits.
As businesses need to place a closer eye than ever on their cash flow, they can expect to start second guessing every expense. If their business premises proves a millstone around their necks with little opportunity for increased ROI what incentive have they to return to it? Especially when widespread access to high quality broadband enables so much of the workforce to perform their duties remotely.
The productivity quandary
“But what about productivity?” readers may wonder. As employees strive to perform their duties at home, the distractions of the domestic environment may seem to stand in the way of productivity. Especially with children out of school and spouses either sharing working space or placed on furlough until further notice.
Studies indicate, however, that employees are actually more productive at home. Or at least, they have the propensity to be. Research undertaken by US gig economy platform Airtasker revealed that remote employees were actually more productive than their office bound counterparts. Remote working can improve productivity for the following reasons;
- Remote workers take more breaks, enabling them to rest their minds
- There are no colleagues around to distract them
- Workers start their day feeling more relaxed and proactive without the stressful morning commute
- Remote workers find it easier to lead healthier, happier lifestyles
It’s up to you to support employees to keep them productive at home. As well as ensuring that they have all the equipment and infrastructure they need, you should also share tips on how to arrange their workspace and practical advice on overcoming their own barriers to productivity. Little things like keeping smartphones in a desk drawer and taking regular breaks can have a huge impact in reducing wasted time.
Of course, time will tell just how many UK SMEs migrate back to their offices. But at the very least, they’ll be thinking more about how remote working can reduce their overhead costs and help them remain profitable.