The Association of Chartered Certified Accountants (ACCA) has recently conducted a groundbreaking study titled ‘SMEs: Business challenges and strategic innovation opportunities.’
The research delves into the pressing challenges that small and medium-sized enterprises (SMEs) face and highlights key opportunities for strategic innovation. The report’s findings underscore the escalating costs, workforce and talent management issues, as well as the evolving ESG (Environmental, Social and Governance) reporting agenda.
Escalating costs
Fazeela Gopalani, head of ACCA Middle East, says that SMEs are grappling with a range of issues. Global inflation has triggered a series of restrictive monetary policies across the world. The study reveals that 58 percent of SMEs identify higher costs as their top concern, particularly with significant increases in utility prices and supplies.
Talent management
The research underscores the struggle for SMEs in acquiring and retaining key talent. Hence, there is a rise in job vacancies, with 31 percent of businesses reporting increased vacancies for professional workers. Additionally, 14 percent faced challenges finding suitable candidates for clerical workers, technicians, and service and sales workers. Therefore, the report suggests upskilling as a critical area of focus amidst rapid technological change.
ESG reporting
In addition, the evolving ESG reporting agenda is a key challenge for SMEs, with nearly 50 percent now required to provide ESG information. The report identifies a gap in generating and managing this data, presenting both a challenge and an opportunity for SMEs.
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Strategic pathways for SMEs
The ACCA report emphasized the need for tailored strategies to help SMEs successfully navigate the evolving business landscape. These strategies include embracing innovation, optimizing resource management, and staying ahead of regulatory changes. Key findings from the report highlight the importance of digital technologies in streamlining operations, reducing costs, and enhancing productivity. The roadmap also uderscored the strategic move of embracing sustainable practices, not only for regulatory compliance but to attract new business and customers. The adoption of continuous learning and development opportunities is encouraged to develop and retain top talent.
“As risk proliferates, there is a wealth of new and emerging regulations impacting businesses, most obviously in the area of ESG. Regulation and reporting requirements will continue to evolve fast in this area, and SMEs need to be future-ready to accommodate increasing demands,” said Gopalani.
In this challenging landscape, the ACCA report urges SMEs to pivot towards innovative strategies to navigate the complexities of cost pressures, talent retention, and sustainable practices. The research not only identifies the critical hurdles but also offers a roadmap for SMEs to emerge stronger and more agile. By adopting digital technologies, embracing sustainability, and investing in talent development, SMEs can position themselves to thrive in an ever-changing business landscape.
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