Research Reveals SMEs Lose €2.2 Billion a Year in Productivity Due to Administration
Sage, a market leader in cloud accounting software, has revealed that Irish SMEs lose up to €2.2 billion annually in productivity due to burdensome administrative tasks.
The report, ‘Sweating the Small Stuff: the impact of the bureaucracy burden’, undertaken by Plum Consulting, shows businesses in Ireland spend an average of 70 working-days per year navigating the bureaucracy burden. Administration accounts for 3.5% of the total manpower of the average business and, according to the company’s live productivity tracker, the cost of lost productivity so far in 2018 amounts to over €309 million.
The report’s findings highlight the largest administrative task for small and medium sized businesses in Ireland is accounting. Operational tasks, such as recruitment and HR, represents a smaller burden for entrepreneurs.
The research also shows Irish companies have fallen behind their international competition in the uptake of digitalisation to address burdensome tasks. For instance, more than 55% do not make use of digital aids to relieve the administration burden on their staff.
Driving productivity through the power of technology is critical to increasing productivity and unlocking the growth potential of small and business sized businesses in Ireland. While recent CSO figures show this sector accounts for 99.8% of all enterprises and generates close to 48% of total turnover in the business economy,[1] the European Commission forecasts employment growth amongst these businesses will drop to only 1% in 2018.[2]
The report included views from businesses across the world, including the UK, US and Ireland. Sage provides solutions to 25% of businesses in Ireland while internationally the Sage Group has more than three million customers in 23 countries.
Outlining the research results, Barry Murphy, Managing Director, at Sage Ireland, said: “Small and medium sized businesses are the lifeblood of the Irish economy, accounting for over 60% of the total workforce. These businesses are under growing pressure to remain competitive in the wake of Brexit and increased international competition. Our research has uncovered that staff productivity is swallowed up by administration. Imagine how we could benefit by removing this burden and allowing business builders to be ambitious, win new clients or improve their product offering.
“At Sage, we are committed to finding innovative solutions for Irish entrepreneurs to digitally manage everything from money to people. Cloud-based accounting software can help save time and money by eliminating cumbersome administration. In giving less attention to burdensome tasks, business builders can concentrate on being ambitious, winning new clients and improving their product offering.”
Global snapshot: Small & Medium Businesses’ Contribution to Global Economy
Across the 11 countries analysed Small & Medium Businesses account for at least 96% of total enterprise, so if lost time was given back to them, the impact on GDP would be appreciable.
| Country | Percentage of time lost to administration | Implied loss in productivity
|
| Ireland | 3.5% | EUR 2.2 bn |
| UK | 5.6% | GBP 39.9 bn |
| South Africa | 3.7% | ZAR 7.3 bn |
| France | 7.7% | EUR 43.9 bn |
| Australia | 4.9% | AUD 31.8 bn |
| Brazil | 6.5% | BRL 79.5 bn |
| Canada | 1.7% | CAD 17.7 bn |
| Singapore | 5.5% | SGD 10.1 bn |
| Spain | 10.5% | EUR 32.0 bn |
| United States | 4.9% | USD 335.3 bn |
| Germany | 3.7% | EUR 28.2 bn |
For more information on the ‘Sweating the Small Stuff’ report, please see: http://go.sage.com/ACG_17Q4_NCM_GB_CNMR_GLACCG_SweatingTheSmallStuff.
To view the Sage live productivity tracker, please see: http://www.sage.com/company/business-builders/reduce-your-admin-burden.
[1] CSO, Statistical Yearbook of Ireland 2017, http://www.cso.ie/en/
[2] European Commission, 2017 SBA Fact Sheet – Ireland, https://dbei.gov.ie/en/
