UK SMEs embrace shift to hybrid working

Myles Leach, MD, NFON UK, discusses the future of SME business models as companies shift to embrace hybrid working

Remote working has been steadily growing over the last decade. Growth has been slower with small businesses due to cultural adversity from senior leaders, many of whom have held onto a misconception that employees don’t work as hard when they aren’t under the watchful eye of a supervisor. However, the pandemic forced an immediate shift to widespread remote-working models. Microsoft’s CEO put it well when he said the world had experienced: “two years’ worth of digital transformation in two months.” So were the worst fears of SME leaders confirmed? Did staff just sit about swilling tea in their PJs, distracted by the front doorbell due to a big increase in online shopping? We surveyed 500 SME leaders to find out.

The results clearly demonstrated a clear trend. The non-negotiable shift to remote workers gave SME leaders an opportunity to check whether their fears would become reality – and overwhelmingly, they didn’t. Many are now completely rethinking their home-working policies, with a view to enhancing staff well-being and reducing office costs. In fact, over a quarter (27%) are now planning to downsize or ditching offices as soon as their lease allows, which equates to over 1.7 million small businesses across the UK.

The research unveiled only half of the small business owners (50%) encouraged remote working prior to the pandemic. The top reason they cited for being averse to remote working was the concern it could impact teamwork (51%), followed by not having the right IT set-up to successfully work remotely (32%) and a lack of trust that staff would work as hard from home (17%).

However, since the mandatory lockdown, attitudes have shifted. Over a third (34%) have been pleasantly surprised by their team’s performance whilst working remotely, a quarter (26%) think it enhanced team spirit and 25% felt the team worked harder remotely than they did in an office setting. The respondents cited the top benefits of remote working as reduced company expenses (48%), followed by fewer staff sick days (40%), a positive impact on the environment (38%), and increased wellbeing in staff (30%).

Ultimately the pandemic has acted as a catalyst by bringing remote working to every business across the UK. Companies that had been culturally adverse in the past had to make the shift, and they have seen first-hand a host of benefits – to their staff, operations and costs. As we look ahead, the hybrid-working shift has the scope to democratise the world-of-work; levelling the playing field so that location or family commitments no longer mean you cannot apply for and secure a dream job. The key for small businesses is to ensure that they have the processes and technology in place to enable seamless collaboration and communication, so that home-working colleagues feel just as much part of the team, as those in the office.

Many small businesses have increased their investment in technology during the lockdown.  Nearly half (45%) of the small business owners agree that the pandemic increased their investment in digital transformation. Over two in five (43%) small business leaders cite technology as their strategic investment priority once restrictions are lifted, followed by staff training (16%) and hiring new talent (11%). Nearly half (48%) of UK small businesses have already (or imminently) plan to deploy AI technologies and 39% of small business owners plan to invest in staff training on these AI technologies before deployment.

Looking ahead, remote working looks set to become an increasingly popular choice for all age groups and industries. According to a poll by Morning Consult on behalf of Bloomberg News, some 39% of adults would potentially quit their jobs if their employer didn’t offer some flexibility around remote work. When broken down by age, some 49% of Millennials and Gen-Zers would feel the urge to quit without remote options.

However, the office doesn’t look to be disappearing anytime soon. Our survey demonstrated that just over a quarter (29%) of small business owners are planning to ditch or downsize their office once their lease allows, but only 17% expect to be totally remote in the future. Businesses look set to save huge costs with the shift to hybrid working – overall the respondents expect to save 37% of their original office cost by downsizing their office.

As we adjust to this new model, businesses will implement smarter working practices to better enable a more agile workforce. The technologies of tomorrow will be focused on merging the physical and online, with virtual reality looking set to bridge the gap in the next few years.