SMEs Thrive Amid Pandemic Through Rapid Digitisation and Increased Investments
In the early stages of the pandemic, a surprising number of Small and Medium Enterprises (SMEs) experienced growth. This was largely due to their quick adaptation to digitisation, which led to an increase in business volume. Research indicates that on average, businesses are still experiencing year-on-year growth, with the successful integration of technology playing a significant role in this success.
According to Pipedrive’s customer research, The State of Sales and Marketing, SMEs have managed to maintain their operations and a positive outlook despite the challenges posed by the pandemic. A striking 80 per cent of professionals surveyed expressed optimism about their business prospects.
Interestingly, SMEs have managed to transform their positivity into sustained results. While 63% of respondents reported that their companies experienced more growth in 2022 than in 2021, this figure represents a decrease from the 71% growth rate reported the previous year. This decline can be attributed to the increase in sales when mandatory lockdowns were lifted.
It’s clear from the data that smaller companies were more affected, with a correlation observed between the size of a company and the success of its employees. Decisions to cut budgets or workforce had a negative impact on future growth and employee confidence. Employees who experienced budget cuts or team reductions expressed concern about their future and that of their employers.
The importance of providing the right support to employees cannot be overstated. Employees who received support from colleagues and managers were 20% more likely to achieve their sales targets. A positive work culture and effective people processes significantly contribute to a company’s bottom line, leading to improved business outcomes.
Despite the economic recession last year, salespeople continued to perform well. An impressive 86 per cent regularly met their sales quotas, with 60 per cent achieving their personal annual sales targets. This figure is only 4 percentage points lower than the previous year and higher than in 2020.
The impact on smaller businesses was more pronounced, affecting both employee performance and company growth. Employees in companies with fewer than 11 employees were 14 percentage points less likely to achieve their personal annual sales targets and 10 percentage points less likely to see their company’s revenue grow compared to larger companies.
In response to these challenges, businesses were six times more likely to increase their investment in technology than to reduce it. Only 5 per cent of businesses cut back on tech investments, while 32 per cent increased their tech spending. Investments in technology were primarily aimed at improving efficiency and managing increasing workloads.
Employees at companies that did not invest in technology were twice as likely to be concerned about their workload. This concern is likely to increase with the advent of GenAI tools. Without access to these labour-saving solutions, employees risk losing productivity and morale as they struggle with outdated tasks while their industry evolves around them.
However, there is a silver lining. Numerous SaaS tools are readily available and require no integration or training to use. A YouGov survey for Barclays supports this, revealing that UK SMEs are dedicating 48% of their revenue to technology in an effort to future-proof their businesses (44%) and boost productivity (45%).
Certain sectors are leading the charge in digitalisation and emerging AI technologies, understanding that these will separate the successful from the unsuccessful. Pipedrive’s report reveals that 93 per cent of retailers recognise the importance of data for future success. In the past year, retailers have invested heavily in advanced technologies such as data analytics (18%) and artificial intelligence and machine learning (12%).
SMEs that invest in technology with a clear purpose are creating options for themselves. They are positioning their businesses to adapt to whatever comes their way. As recent history has shown, being prepared for the unexpected and flexible enough to adapt is crucial for growth.
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