SME Business Trends for 2024
2023 was challenging for businesses, particularly small and medium-sized enterprises (SMEs).
Supply chain difficulties, inflationary pressures, staffing challenges, and a host of other demands tested the resilience of SMEs across the UK – to the extent that many companies struggled to survive. In fact, company insolvencies recorded in the second and third quarters of 2023 were the highest witnessed since 2009, according to government data.
However, SMEs who stay ahead of pressing sector trends may be best positioned to increase resilience and thrive over the coming year. Consider the following key trends that are likely to impact SMEs in 2024:
Generative artificial intelligence (GenAI)
In the rapidly evolving technological landscape of 2024, embracing digital transformation is imperative for SMEs.
One particularly ground-breaking innovation leading the charge is GenAI. This cutting-edge technology offers a range of AI tools designed to help SMEs streamline operations, boost efficiencies, and enhance customer support.
For example, ChatGPT, an AI-powered tool that can simplify the process of crafting product descriptions for SMEs. Additionally, AI-driven chatbots can adeptly handle routine customer inquiries, freeing up valuable time for SMEs to focus on more profitable endeavours.
However, the integration of AI into business processes is not without its challenges. Data privacy concerns loom large, and there’s a pressing need to ensure responsible data collection practices. Moreover, a significant portion of the workforce lacks the necessary skills to effectively and safely utilize AI technology. Research conducted by Salesforce indicates that 62% of employees feel ill-equipped in this regard.
The labour market continues to pose challenges SMEs. While there are signs of easing in the tight job market, the competition for skilled talent remains fierce.
According to the Federation of Small Businesses, nearly a quarter of small businesses (22%) cite a shortage of skilled workers as a hindrance to their growth this year.
In response to these challenges, SMEs are increasingly turning to skills-based hiring strategies as an alternative to traditional recruitment methods. Rather than solely focusing on specific qualifications, this approach prioritizes candidates who possess the necessary skills and competencies for the job. By embracing skills-based hiring, SMEs can broaden their talent pool and better compete for top candidates in the job market.
In addition to this, investing in the development of soft skills among existing employees is another avenue for SMEs to bolster their workforce in 2024. Skills such as problem-solving and effective communication are invaluable assets in today’s dynamic business environment.
The flexible working evolution
The evolution of flexible working arrangements continues to reshape the modern workplace landscape in 2024.
Remote work, hybrid setups, and other flexible options are increasingly sought after by employees and are poised to become the new norm. In a significant development, the Flexible Working Bill is slated to become law this year, granting employees the right to request flexible working arrangements from the onset of their employment.
In response to this shifting model, forward-thinking SMEs are anticipated to adjust their policies and adopt technologies that support flexible working models. Embracing flexible working not only meets the evolving needs of employees but also fosters collaboration and productivity within the organisation.
In today’s tech-driven landscape, the risk of cyber-attacks looms larger than ever for businesses, particularly SMEs With limited resources at their disposal, SMEs may appear as attractive targets to cyber threat actors. Therefore, prioritizing investments in robust cyber-security measures and providing comprehensive training on cyber-hygiene are paramount for SMEs to mitigate potential losses in 2024.
As SMEs continue to rely heavily on technology to drive their operations, safeguarding digital assets and sensitive information becomes imperative.
By proactively fortifying their cyber defences and ensuring that employees are well-versed in best practices for online security, SMEs can bolster their resilience against cyber threats and safeguard their business interests in the year ahead.
As consumer preferences evolve, there’s a growing trend towards products that not only serve the customer but also contribute positively to the environment.
In response, SMEs are placing greater emphasis on sustainability initiatives to enhance brand image and appeal to eco-conscious consumers.
In 2024, SMEs can demonstrate their commitment to sustainability by adopting practices that promote social responsibility. This includes ensuring fair wages for employees and sourcing from local suppliers, which not only aligns with ethical principles but also fosters community support.
In conclusion, as SMEs navigate the complexities of 2024, it’s evident that adaptability and foresight will be critical for success. From embracing technological innovations like AI to prioritising sustainability initiatives and fortifying cyber-security measures, SMEs have a range of strategies at their disposal to thrive in the evolving business landscape.
However, it’s essential for SMEs to approach these changes with caution, carefully weighing the benefits against potential risks and ensuring responsible implementation.
Maintaining robust insurance coverage can offer valuable protection against unforeseen challenges. Click here to get in touch with the Sentio Team.