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Businesses must embrace digitisation and the use of technology along with greater training for staff to address the productivity downturn, says MYOB.
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Small businesses must focus on productivity as recession looms: MYOB
14 June 2023
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Small business owners and operators must focus on productivity as a possible recession looms, says accounting software firm MYOB.
The organisation’s Business Monitor report found less than half (47 per cent) of small- to medium-sized firms were measuring productivity in their business despite a challenging economic period looming.
Emma Fawcett, general manager of SME at MYOB, said while the nation’s small businesses had weathered considerable challenges in recent times, they need to focus on productivity to achieve more with less.
“We know this is a challenging environment for SMEs, with 40 per cent already impacted by rising interest rates,” said Ms Fawcett.
“The increasing cost of living has led to an increase in the cost of doing business, affecting profits for 38 per cent and, for almost a third (30 per cent), resulting in price increases for their customers.”
“The survey results indicate that many small businesses are being cautious and holding steady, rather than investing in their business growth.”
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MYOB’s report also found businesses digitising their operations correlated to an increase in productivity, as 34 per cent of those who adopted digital tools said it helped them to work remotely and collaborate.
“Digital capabilities are closely linked to productivity, helping SMEs save time, money and improve accuracy in their business operations, as well as drive economic growth in uncertain times, but cost remains a barrier,” said Ms Fawcett.
“While many SMEs are unlocking the power of digital tools, we know it’s not always easy to make investments, 23 per cent of respondents said government support would help incentivise digital adoption.”
When it came to how businesses believed they could improve the productivity of their employees, 37 per cent of respondents said it would be by improving skills and training programs available to them, followed by free tertiary education for in-demand professions (28 per cent) and government grants to advance employees’ skills and training, 26 per cent.
“The findings suggest that while SMEs are cautious about their current position and the economic environment, additional investment to help them to improve and upskill themselves and their teams would assist with productivity,” Ms Fawcett said.
“The last few years have shown Australia’s small and medium businesses can carry on in unprecedented times and this data shows they are preparing for what’s to come.”
“To protect against all the risks businesses face, SMEs need to adopt productivity tools and embrace technology. Driving this adoption will not only help SMEs thrive, it will also build a stronger economy that will positively impact Australia’s economic outlook.”
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