Be the Business Productive Business Index – Edition Two Q1 2021

The Be the Business Productive Business Index is comprised of four clearly defined elements: performance of business; expected performance of business; actions taken to drive sustainable growth; and planned actions to drive sustainable growth.

It is designed to track not just firm performance, but also recent investments and focus, as well as plans for investment the key areas of management and leadership tech adoption, HR, development and HR, operational efficiency and innovation and ideas.

The headline Productive Business Index has increased from 102.88 to 108.77

The Productive Business Index has increased by around six points, reflecting increased optimism amongst UK SMEs.

On our index scale, a figure of zero represents the worst possible score, 100 no change, and 200 the best possible score.

The Business Performance Index has improved strongly and the Business Capabilities Index again scores highly.

Operating conditions remain tough for many, but the balance has shifted decisively

The proportion of businesses forecasting a decline in business conditions, revenues, volumes of orders or hiring over the next three months have all declined compared to the previous edition of the index.

Some 29 per cent now forecast an improvement in revenues over the next three months versus 21 per cent in the first edition of the index and 30 per cent forecast an increase in the volume of new orders versus only 23 per cent last time round.

There is a small increase in the proportion of companies planning activities that drive productivity improvements

SMEs continue to show high levels of activity focused on capability improvements.

More companies will spend more time on management and leadership initiatives and invest more in business technology. A third will increase the number of products and services they launch in the coming year.

Driving operating efficiencies is on the agenda for a large minority of businesses as well. This continues to be more common among SMEs with over 50 employees.

Brexit will have less of an effect on many firms, both short and long term, than coronavirus

Many SMEs believe that Brexit will have no impact on the business, with over 42 per cent saying it has made no difference in the short term.
Some 60 per cent of SMEs surveyed believed that the coronavirus crisis is more of a concern than Brexit, and 56 per cent believed the pandemic crisis will be more costly to the business than Brexit.

The four day week is becoming a reality for UK businesses

One in 20 micro, small and medium-sized companies has already adopted a four day week for employees who normally work five days. Alongside that, nearly a fifth (17 per cent) are in the process of considering this change. Some 29 per cent of business decision makers might consider it in the future.

Most industry sectors are turning the corner as the third lockdown ends

While some sectors including hospitality reported tough trading conditions over the last three months, nearly all forecast a more positive picture over the next quarter.

Management and leadership remains the dominant area of focus for business performance improvement

We ask businesses to rank the five areas of productivity improvement in order of importance to their business. There were only slight movements in how the five key areas of productivity improvement are ranked in this edition of the index.

While the importance of management and leadership declined slightly, it remains the biggest focus, followed by operating efficiency.