Escalating costs, talent management, ESG reporting top 3 hurdles for SMEs entering 2024- Report

Escalating costs, talent management, ESG reporting top 3 hurdles for SMEs entering 2024: Report

Rising costs amidst global economic shifts is the top concern for 58 per cent of SMEs as they also face workforce challenges, said ACCA (Association of Chartered Certified Accountants) in its latest survey report on Thursday. Highlights the pressing challenges and strategic innovation opportunities for SMEs, the study SMEs: Business Challenges and Strategic Innovation Opportunities, revealed three main challenges: escalating costs, workforce and talent management, and the evolving ESG (Environmental, Social, and Governance) reporting agenda.

Examining the cost pressures, the report noted that utility prices have surged by over 20 per cent for 25 per cent of the surveyed businesses, while for an additional 27 per cent of respondents, the price hikes ranged from 11 per cent to 20 per cent.

With respect to the workforce landscape for SMEs, it underwent significant shifts in Q1, 2023 over the previous 12 months, with 31 per cent of respondents reporting increased job vacancies for professional workers, the report said.

However, the ability to fill these vacancies varied across occupations, with 14 per cent unable to find suitable candidates for clerical workers, technicians, and service and sales workers.

Lastly, while sustainability reporting has gained prominence, with almost 50 per cent of SMEs being requested to provide ESG information, the report said there is a disconnection between the information required and the ability to generate it.

According to the survey, fewer than 45 per cent of SMEs have received technical assistance in collecting ESG information even as concerns were raised about the perceived high costs associated with ESG reporting.

The report called for tailored strategies to support SMEs in navigating the evolving business landscape along with embracing innovation, optimising resource management, and staying ahead of regulatory changes.

The roadmap recommended the adoption of digital technologies, enabling SMEs to streamline operations, reduce costs, and enhance productivity. It also emphasised the importance of embracing sustainable practices, not only as a regulatory compliance measure but also as a strategic move to attract new business and customers. In addition, the report also urged SMEs to develop and retain top talent through continuous learning and development opportunities.

Aleksandra Zaronina-Kirillova, Head of SME, ACCA, said, “As we enter the new year, SMEs are grappling with a wide spectrum of challenges, but our findings are also a clarion call for SMEs to embrace strategic innovation. By addressing these challenges head-on, SMEs can unlock new growth avenues and strengthen their market position.”

The global survey was undertaken with the number of responses being 620. The survey data was complemented by multiple roundtables held in Africa, Asia Pacific, EMEA, Latin and South America, USA and Europe regions.

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