Nicola Campbell, head of accounts and business advisory services in the Glasgow office of Azets, is encouraging Scotland’s SMEs to review and mine their technology, tax planning, rewards, retention and operational plans for savings and improved efficiency.

Her six suggestions are:

1. Use technology to automate tasks, free up time, and reduce the strain caused by staff shortages and heavy workloads. Automating the manual aspects of tasks like logging invoices, reconciling bank accounts, and spreadsheet-based accounting work can free up considerable time and costs across the business, especially for senior staff.
2. Consider introducing performance-linked incentives such as staff bonuses based on specific income targets. Setting clear performance goals, motivates employees by linking their rewards to success and shows that the employer want to reward those who help the business to grow.
3. Tax efficient benefits such as share options reward staff for their contribution as the business grows. Salary sacrifices for pensions or electric vehicles can increase staff take-home pay, reduce their tax and leasing costs whilst also lowering employers NIC.
4. Staff can be incentivised to introduce new employees by rewarding referrals rather than relying on recruitment agencies. Offering referral payments for new hires saves on agency commission you would pay an agency and reduce the time spent on the recruitment process.
5. According to PayFit, the average cost of replacing member of staff is £25,000. Investing a small percentage of that cost in staff development, flexible employment and training can help reduce staff churn and costs. It is important that staff understand how they will evolve with the business and how their role supports the business plan.
6. Reviewing planning and forecasting helps align staffing and resources to market trends and the ebb and flow of demand. At its most detailed, this can take the form of planning staffing and business resources up to 18 months to two years in advance. At its simplest it focuses on matching staff resources to parts of the year where capacity is tightest and workloads are highest.

“SMEs across Scotland are under considerable strain from rising costs, wage demands, skills shortages, retention challenges, and hidden costs relating to staff turnover, all of which hit productivity, morale and the bottom line,” said Ms Campbell.

“I’d encourage business owners to think about areas where they can make small changes to ease the pressure on their staff and finances whilst also freeing them up to think about how they can grow their businesses. A handful of small, easy to implement changes can make a considerable difference to the profitabily and sustainability of the majority of SMEs.”