A new industry-led report – The Future of Business: A Conversation with SMEs – published by Vodafone Ireland today, reveals overwhelming positivity about the future of the SME sector in Ireland. However, clear challenges exist in terms of digital skills and adopting new ways of working to stay competitive and attract and retain talent.
This report is the first part of a series of research and engagement exercises by Vodafone Ireland, called Open Conversations. The study uniquely engaged nearly 600 SME business owners, industry representatives and employees about their current experiences and aspirations across business growth & investment, smart working, the impact of technology and skills & training in Ireland’s most important business sector.
According to the research, there is significant optimism in the sector with nearly 90% of SMEs predicting growth between now and 2021.This optimism was shared by employees, with 60% confident about the future prospects of their company. Munster is the most optimistic region, with 67% of SME employees feeling confident about the future prospects of their company (versus 62% in Connaught/Ulster, 60% in Dublin, with Leinster (outside of Dublin) overall coming in lowest at 52%). Additionally, Munster employees are the happiest at 60% (versus Dublin 59%, Connaught /Ulster 58% and Leinster 52%).
When asked about investment, 60% of SME business owners surveyed confirmed that they plan to invest in their business within the next 12 months; with the majority (71%) being spent on staff attraction and retention, followed by sales (64%) and technology & digital tools (57%). In fact, 69% of small firms plan to increase technology investment within the next 1-5 years, higher again for medium sized firms, who are also most likely to invest upwards of €50,000. However, nearly seven in 10 (68%) see barriers to growth, with 46% seeing it come from Brexit, followed by 40% from taxes and rates.
Nearly three quarters (74%) of SMEs said technology enables better decision making and that reliance on IT and automation results in employees adapting and gaining new skills.
The study also shows the untapped potential of smart working – the combined use of technology with flexibility and agility for employees to work from home or co-working hub or hybrid model – in attracting and retaining talent. One in three (33%) employees see it as top priority in their current role, 50% in a future job and 34% likely or very likely to move job for it. Employees in Leinster and Connaught/Ulster have the highest demand for smart working, with 79% of employees in both regions in favour of a smart working policy (versus 78% Dublin and 73% Munster).
Despite this demand, just 9% of SME business owners in Ireland are fully embracing the concept of smart working with 38% not considering it at all. Company culture is pinpointed by both employers (34%) and employees (60%) as the biggest barrier to smart working.
When looking at digital skills, 22% of employees felt that they did not have the necessary skills required for their role, with a further 20% unsure whether they had the relevant digital skills required. The greatest amount of uncertainty is seen in Connaught/Ulster with 29% of employees unsure if they have the necessary digital skills for their current role (versus 21% Leinster, 18% Munster, and 14% Dublin). These figures support the recent European Commission research, which identified Ireland as having one of the lowest level of digital skills in the EU. Vodafone’s research does show that employees are conscious of the need to keep their skillset relevant in the digital economy and will likely discriminate against an employer that doesn’t encourage or foster an environment friendly to professional development.
Commenting on the findings of the report, Director of Enterprise at Vodafone Ireland, Regina Moran said: “The sentiment of this research offers SME employers extremely valuable insights into the future of the workplace in Ireland – particularly as many companies are struggling to not only attract staff, but retain their existing staff. What is evident is that employee expectations have changed and that businesses in Ireland need to accommodate that change.
“With more than 95% of Ireland’s business economy made up of SMEs, it’s never been more important for Irish businesses to talk to each other and it is vital for us to understand the sector to serve it better, help businesses realise their connected ambition and contribute to their future sustainability. We see connectivity and technology at the core of enabling Irish businesses to flourish, and want to understand businesses so we can develop technology that helps achieve this goal. Vodafone is committed to championing the digital potential of communities all over Ireland, ensuring equal benefit for all businesses in society”
Click here to download the report in full. Additional content is available by searching #FutureOfSMEs.