The SME community sits at the very heart of the UK economy. It accounts for 99.9 per cent of the business population – 5.9 million businesses – three-fifths of the employment, and around half of turnover in the UK private sector. SMEs are also known for thinking on their feet. A high proportion see flexibility and agility as their greatest asset. So in March, when the coronavirus forced all businesses into lockdown – either to shut up shop or move to remote working with immediate effect – there was an expectation that Britain’s swashbuckling businesses would step up to the challenge.
However, this was a challenge like no other. And to say that the lockdown measures have had an impact on UK SMEs would be an understatement. From budgets being frozen, to pinched consumer spending and a general slowing of the pace across the business world, this is undoubtedly one of the largest tests businesses across the UK will ever face. For well over two months, companies have been forced to close their doors, scale back their operations and even lay off staff.
According to Fiverr’s research, conducted among 1,000 business leaders across the UK, the financial burden of the pandemic has been sobering. Businesses reported an average £277,000 in revenue lost to the coronavirus crisis, 64 per cent expect revenues to further decrease by half in the coming months, and confidence in future revenue performance in places such as Cardiff and Glasgow remains low. Companies in London were expecting the largest fall as a result of the crisis, with an average of £790,000 lost per company.
However, when the time comes to reflect on what could have been done to better equip businesses and decrease revenue loss, the business world needs to acknowledge what it could have done better. Fiverr’s research reveals that more than half (51 per cent) of UK SMEs admit to being woefully unprepared for how the coronavirus pandemic would impact their business. Of those, 37 per cent lay the sole blame on the government, and 15 per cent blame lack of training or business community support. The government has supported UK businesses financially, but according to UK decision makers, there was a distinct lack of advice and guidance from both the government and the wider business community on how to move forward when forced to close their doors.
The data also reveals that nearly a third (30 per cent) of businesses blame themselves for being unprepared. Businesses didn’t see this coming, and there isn’t a handbook for dealing with a pandemic. Yet full-time remote working simply isn’t possible without the right setup – 26 per cent of UK SMEs said they weren’t equipped with the right technology for remote work, and 34 per cent said they weren’t equipped to work from home full stop. Those businesses that had already implemented remote working and remote working technology in some way before the pandemic didn’t struggle in the same way.
Furthermore, in an environment where businesses have had to adapt to furloughing employees, remote working and disrupted communications, 58 per cent of SMEs across the UK turned to digital freelancers to keep work moving. Cities that have switched more readily to hiring freelance talent to help get work done, such as London and Manchester, are also amongst the most optimistic about the future of remote working. Well over half of UK businesses (58 per cent) have adopted more flexible working hours, and 55 per cent have prioritised the work-life balance of employees. The cities that have embraced these new ways of working quickly, such as Manchester and Bristol, are among those that are most optimistic about the future of their business.
What this insight shows is that it’s not about being prepared, it’s about agility and the ability to adapt. Digital transformation has been front-of-mind for UK businesses for over half a decade – but the pandemic has accelerated these plans at a faster pace than anyone anticipated. And now, as we transition back to “normal”, businesses should be questioning whether a full return to physical workplaces and the strict nine-to-five is the right call.
Prior to Covid-19, global research and advisory firm 451 Research showed that improving workforce productivity and collaboration experience was the top transformation initiative among businesses. A third (33 per cent) of businesses claim their productivity hasn’t been negatively impacted by a shift to remote working, and 35 per cent said it had actually increased. For a country that’s consistently lagged behind its G7 counterparts on productivity output, these kinds of figures shouldn’t be ignored.
For retail companies and shops that will reopen on 15 June, there will be no going back to offline-only trading. The coronavirus pandemic has triggered massive changes in consumer behavior, with online sales jumping by about 50 per cent in April alone, according to Adobe’s Digital Economy Index. Of course, people are primarily transacting online because they can’t leave their homes, but these new customers won’t all disappear once the virus subsides. The fear of coronavirus will unfortunately linger long after Covid-19 cases dwindle, but aside from that, the pandemic has opened the eyes of many consumers to the sheer ease of online shopping. Simply put, if businesses want to survive and thrive in the new reality, they’ll need to significantly expand their online presence.
Adjusting to this new reality won’t be without its challenges. As a result, Fiverr has worked quickly to adapt to the new ways that people in the UK are living and working. When the pandemic began, we opened several new categories on our website, including online coding classes and music lessons, to meet the growing demand for virtual assistance. We’re also actively working with businesses to help them digitally transform their offerings, whether that’s creating a website, helping with e-commerce, or optimising social media channels.
The wider business world also recognises that it is now a necessity for businesses to build and maintain their online presence. Zoom, Microsoft, Google and Shopify have all offered free services to help businesses with this transition.
The coronavirus pandemic has fundamentally changed the way people live and work, and these new behaviours will last long after the virus fades. Digital transformation is no longer a choice, it’s a reality, from the kind of working habits businesses offer to their employees to how consumer-facing organisations offer their services. The future of business is here, and companies of all sizes, across all sectors, must now adapt to survive.
For more information, please click here.