Small business focussed more on measuring productivity in new era of work

measuring productivityA new report from Be the Business, tracking business performance and management capabilities has found business leaders are positioning themselves to improve productivity levels, including increased adoption of e-commerce, and greater emphasis on measuring business performance and strategic planning. The Productive Business Index (PBI) is derived from a survey of over 1,000 directors of companies with 2-249 employees. The PBI features a headline number, indicating the overall health of businesses, and sub-indices which provide insight on key productivity drivers such as management skills; technology adoption; training and HR; operating efficiency; and innovation.

The latest report finds that more than half (53 percent) of leaders measure productivity levels within their business. Measuring performance is widely seen as a precursor to business leaders taking steps to improve productivity.

Adoption of technology – another driver of productivity gains has also increased. Business leaders reported more confidence in their use of e-commerce services, as well as higher levels of planned investment in the same technology. In Q1 2022, the headline PBI has increased from 119.0 to 121.1, the highest score since the series launched a year ago, underpinned by an increase in business capabilities.

The general economic climate was cited by almost four in 10 (38 percent) business leaders as the top barrier to business growth, while competition from other businesses in the sector was identified by a quarter (25 percent) of leaders as a key constraint to business growth. The biggest change compared to a year ago was a rise in the number of respondents citing labour costs as a constraint on performance –  now 22 per cent, up from 16 per cent a year ago.

Looking more closely at individual sectors, nearly half of business leaders in the accommodation and food services sector (48 percent) say rising energy costs is their greatest pressure. Elsewhere, nearly a quarter of businesses (24 percent) are continuing to grapple with ongoing supply chain disruptions, impacting manufacturing firms and wholesale businesses most significantly.

Anthony Impey MBE, CEO, Be the Business, said: “We’ve witnessed some notable changes in business leader behaviour over the past year. More businesses are adopting technology, particularly e-commerce which can add important revenue streams. These are positive signs that businesses have focused on becoming more resilient but trends will need to continue if we are to see sustained improvements in SME productivity.”

Image: Microsoft