London is one of the top three areas in the country with productivity issues in its small to medium sized businesses, according to new research from Opus Energy. Coming in only behind the West Midlands and North East, a shocking 93 per cent of firms confessed it is a problem. Compared to 78 per cent across Yorkshire, the South West and East England, the capital city is lagging.
As a result, SMEs in London are being forced to implement a wave of changes to help compete with the rest of the country, with employee wellbeing measures such as flexible working being the most popular tactic for nearly half (46 per cent). Over a third (38 per cent) are tackling the problem by paying employees above the average wage, while a similar number (36 per cent) are offering incentives and perks to raise team morale.
However, only a quarter (27 per cent) of those that are trying to invest in a solution have set up their company near other likeminded businesses, in order to capitalise on a culture of innovation. This is despite the fact that nearly three quarters (72 per cent) believe that working with businesses of this ilk would provide some much-needed help from the perspective of improving productivity, commercial success and competitive advantage.
When asked how they chose the location of their business, half (50 per cent) of smaller businesses in London said that it was because it was where they lived, a quarter (26 per cent) said that it was to capitalise on nearby talent, and just one in ten (11 per cent) said that it was to be part of a business cluster.
Nikki Flanders, Opus Energy Chief Operations Officer, commented:
“Considering that 99% of all private sector UK businesses are SMEs, to hear that the vast majority of those in our capital city are struggling with productivity is a serious concern. While it’s great to see SMEs introducing perks and wellbeing benefits for their employees in order to improve productivity, it may also be worth researching the possibilities of joining a business cluster, in order to benefit from the proximity of other businesses. It’s clear that there is an appetite in London for greater collaboration with other businesses, however, only a quarter are taking steps to make these ambitions a reality.”