Our SME news round up for this month focuses on changes needed to payroll calculations, the importance of productivity and using digital technology to stay competitive.
Take note of important changes to auto-enrolment
This month UK small businesses are having to make important payroll changes. Employer pension contributions doubled from 1% to a minimum of 2% from 6 April 2018. Failing to comply could mean anything from a £400 fixed penalty to escalating fines up to £10,000, depending on the size of your payroll. What’s more the employer contribution is set to rise to a minimum of 3% from April 2019. While the new tax year brings higher pension costs for SMEs, generous pensions can also work to attract and retain good employees too. Faced with rising costs, business-owners should ensure they are getting good value from their pension scheme.
SMEs to recalculate their payroll for low pay increases
The recent Spring Budget also saw rates for the National Minimum Wage – for those under 25, and the National Living Wage – for those over 25, rise by more than inflation. Firms will have to check that they comply with the new wage rates which means a 5.3.% increase in the NMW and a 4.4.% increase for those earning the NLW. The new rates apply from 1 April 2018 and will mean payroll recalculations for businesses across the country.
Pay attention to your productivity
There are alarming reports that SMEs are failing to engage with the issue of productivity. While the UK lags some 16% behind the G7 countries in productivity, UK government figures released this month show there have been some hopeful signs of productivity increases in recent months – especially in the services and manufacturing sectors. Yet according to research by the University of Gloucestershire, many SMEs simply don’t know whether their own productivity has increased or decreased in recent years. This is because they are failing to measure it as they don’t have the information and analysis needed. Measuring staff presenteeism and absenteeism are key to working out productivity and a small investment in IT (e.g using SaaS business tools) can add to ensuring staff efficiency.
SME workers are the UK’s happiest
While management teams grapple with productivity figures, the good news is that workers in the UK’s millions of SMEs are the UK’s most content and loyal. Research by LinkedIn, the Work Satisfaction Survey reveals that small businesses boast the highest job satisfaction levels amongst employees. In fact, companies with fewer than 10 staff topped the job fulfillment list. The survey of over 10,000 professionals worldwide showed that one in five UK employees preferred to work for an SME over a larger business, and 77% of SME staff would recommend their employer to a friend. While this is positive news for SMEs, they’re still struggling to recruit new and skilled staff.
Growing SMEs embracing digital technology
Digital technology will play an important role in the expansion of small to medium enterprises. A study by CensusWide found that more than a third of UK SMEs (38%) are planning to expand their business in 2018 and nearly half plan to invest in digital tech to do so. The survey of more than 500 UK SMEs in the retail, financial, manufacturing and HR sectors were enthusiastic about using IT to improve marketing and sales and to manage their business more efficiently.
You might be interested in some hints and tips we’ve put together to help SMEs with various aspects of digital marketing.
Time and attendance SaaS systems such as uAttend make easier work of calculating changes to payroll. The automated online system ensures that timesheets are correct and that staff are paid accurately and on time. uAttend’s cloud-based time and attendance system helps you manage your business more efficiently and stay competitive.