SMEs Face Triple Threat: ACCA Identifies Escalating Costs, Workforce Woes, and ESG Pressures
In a recent study conducted by the Association of Chartered Certified Accountants, the challenges and innovation opportunities for small and medium-sized enterprises have been highlighted. The report, titled "SMEs: Business challenges and strategic innovation opportunities," identifies three main challenges facing SMEs: escalating costs, workforce and talent management, and the evolving Environmental, Social, and Governance reporting agenda.
Fazeela Gopalani, Head of ACCA Middle East, emphasised the global nature of the inflation challenge, as central banks worldwide implemented restrictive monetary policies. Gopalani stated, "Our research also suggests that SMEs continue to struggle to both acquire and retain key talent, as well as facing significant wage pressure and pay demands within their organisations. Upskilling is also a critical area of focus as technological change speeds up."
The report stresses the importance of tailored for SMEs to navigate the evolving business landscape successfully. Key findings from the study include:
1. Cost Pressures and the Economy:
58 percent of SMEs cited higher costs as their top concern, with significant increases in utility prices and supplies.
Escalating costs pose a substantial challenge for SMEs in their day-to-day operations.
2. Workforce and Talent Management:
31 percent of businesses reported a notable rise in job vacancies, particularly for professional workers.
Challenges in filling specific roles, with 14 percent unable to find suitable candidates for clerical workers, technicians, and service and sales workers.
3. SMEs and the ESG Agenda:
Nearly 50 percent of SMEs are now required to provide ESG information, highlighting the growing importance of sustainable practices.
The report identifies a gap in the ability to generate and manage ESG data, presenting both a challenge and an opportunity for SMEs.
Gopalani emphasised the impact of new and emerging regulations on businesses, especially in the area of ESG. She stated, "SMEs need to be future-ready to accommodate increasing demands." The report provides a roadmap for SMEs to emerge stronger and more agile, recommending the adoption of digital technologies to streamline operations, reduce costs, and enhance productivity.
The roadmap also emphasises the importance of embracing sustainable practices not only as a regulatory compliance measure but also as a move to attract new business and customers. Additionally, continuous learning and development opportunities are encouraged to help SMEs develop and retain top talent in the face of evolving challenges.