Over half (58 per cent) of SMEs in Yorkshire and Humberside have been forced to overhaul their working styles in reaction to poor economic conditions to create leaner, more flexible operating models, according to a new report from CitySprint – the UK’s largest same day distribution firm.
The report – ‘Collaborate UK’ – finds that over a quarter (28 per cent) of SMEs are even willing to work with their competitors to achieve their goals, making them the most willing to engage in ‘co-opetition’ in the UK, where nationally only 12 per cent would.
The report also identifies the emergence of a new breed of “size zero” businesses in Yorkshire and Humberside – organisations that are embracing smart outsourcing, sharing expertise and exchanging services to maximise their effectiveness. It finds:
- Smart outsourcing – 61 per cent of SMEs have embraced outsourcing to reduce costs and among this group, the projected spend on outsourcing in 2013 is an average (mean) £155,369 each
- Sharing expertise – 31 per cent of SMEs are working with other businesses to get sales leads and win new businesses while 14% are sharing operating costs
These smarter ways of working have perhaps contributed to a feeling of cautious optimism amongst SMEs in Yorkshire and Humberside as they look to increase their headcount by a net total of 15 per cent or around 51,700 new jobs this year.
Professor Robert Blackburn, Director, Small Business Research Centre, Kingston University, said:
This more open, collaborative culture not only strengthens the capabilities, flexibility and efficiency of SMEs but has a wider economic benefit, stimulating more opportunities for enterprises as ‘suppliers’.
Despite this more open working philosophy, three key barriers remain that are preventing greater collaboration in Yorkshire and Humberside:
- No trust – 25 per cent are worried other businesses in the region will steal ideas if they work with them
- Lack of budget – 24 per cent of SMEs do not have the budget to approach other businesses
- Unsuitable partners – 24 per cent of SMEs cannot find the right businesses to collaborate with
Patrick Gallagher, CEO of CitySprint, said:
By sharing expertise, exchanging services and embracing smart outsourcing, even with their competitors, SMEs in Yorkshire and Humberside are successfully stripping non-core functions out of their businesses. This is creating a new breed of leaner, “size zero” businesses able to focus on their core area of expertise whilst tapping into their networks for everything else as and when they need something.
Our report shows that far from feeling isolated during the economic downturn, there are real opportunities for new intra-SME contracts across the UK and this is breeding, in parts, new optimism that is the envy of larger firms. Through the work we do in Yorkshire and Humberside, it has been really fascinating to see businesses seize this opportunity and, in many cases, play a part in it.