Half of the leaders of small & medium enterprises (SMEs) in Singapore list difficulties in hiring staff as their number one business challenge (49%), followed by high manpower costs (48%).
These findings from the latest SME Development Survey, which polled 2,836 SMEs in the nation, point to a growing need for small business owners to find ways to rethink their business model.
More than half the SMEs surveyed say their main strategy is to restructure in the year forward, given their concerns on productivity, technology, and innovation.
"It is a positive sign that SMEs are embracing the need to change and become more competitive. It is one thing to understand the need to change, but what is arguably more important is the changes SMEs plan to make," said Chen Yew Nah, MD of DP Information Group, which conducted the study.
After hiring and manpower costs, 45% of SMEs listed increasing competition, while 31% cited high rental costs, as their next big challenges.
Difficulties in securing bank financing was the least of their concerns at only 2%.
RELATED READ: Crafting a L&D strategy in a SME
Productivity improvement was the number one business priority for 87% of SMEs, a significant increase over last year's 58%. To make this happen, most SMEs (54%) said they will look for ways to get more from their manpower, while 28% said they will give automation a go.
Three-fourth of the respondents are keen on innovation, a finding that tallied with the high 96& of respondents who have accessed the government's Productivity & Innovation Credit grant.