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SME guide: Everything you need to know to prepare your business for 2024 and beyond
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SME guide: Everything you need to know to prepare your business for 2024 and beyond

There’s no better time to be an SME in Singapore than now; here’s how you can turn your biggest business challenges into opportunities to grow and thrive, leveraging tech as your ally.

This article is brought to you by Employment Hero.

While the global economic climate continues to pose challenges, Singapore’s economy is projected to grow by 1% to 3% in 2024. Aligning with this cautiously optimistic outlook, a majority (82%) of business leaders surveyed in Employment Hero’s SME Sentiment Report have expressed confidence in their company’s growth prospects this year, with 31% feeling extremely confident. However, micro and small businesses were 58% more likely to be less confident about their growth prospects.

Shedding light on why this may be so, in another 2023 study by Employment Hero, small and medium-sized enterprises (SMEs) in Singapore admitted to struggling with numerous obstacles that hinder their ability to attract and retain top talent — especially in comparison to multinational corporations (MNCs).

These obstacles need addressing, as with any economy, SMEs are the backbone of Singapore’s enterprise landscape. As of 2022, SMEs make up 99% of the local enterprise count, or equivalent to 298,500 enterprises, with a total of 2.59mn people employed in these units.

Prioritising the potential challenges faced, Singapore’s Budget 2024 statement did introduce new and enhanced measures, such as ways to help smaller local firms plug into global supply chains, and enable them to compete in markets abroad. Efforts were also announced to help smaller firms harness technology through pre-approved solutions, to achieve greater efficiencies and productivity gains.

The above aside, sustainability was also identified as a focus area to foster growth amongst SMEs. In fact, as MNCs look to reduce their carbon footprint, they expect their suppliers to do the same; thus, by becoming sustainability-ready, SMEs will be able to play in the multi-national value chain, Deputy Prime Minister and Minister for Finance Lawrence Wong affirmed during the announcement.

With all these in mind, it is undeniable — SMEs are taking centrestage, and it’s time for leaders to a take charge of their plans for the business in 2024.

Confessions of a local firm

Surprisingly, a noticeable disparity exists between micro and small enterprises as opposed to medium-sized ones; in particular, micro and small businesses seem to be struggling more than medium-sized enterprises. When polled, these smaller entities were more likely to assess their company performance as average or poor in the past year in comparison to their medium-sized counterparts; with the top three reasons cited being rising costs and inflation, lower revenues and customers, and cashflow.

On the other hand, the top three challenges for medium-sized businesses in the past year were:

  • Rising costs and inflation;
  • Employee retention, and
  • Upskilling of staff.

These top concerns were, of course, rather unsurprising; after all, inflation rose sharply in 2022, while employees’ sentiments have undergone major shifts over the past couple of years.

Unfortunately, these current challenges are expected to persist, with business leaders identifying rising costs and inflation (43%), employee retention (31%), cashflow and upskilling of staff (both 29%) as challenges they expect to face in the next 12 months.

Growing pains: Turning challenges into growth

On a more positive note, there are still many areas of growth in the path ahead — one of the biggest being the realms of digital transformation, AI, and automation.

Reflecting its increasing popularity, Singapore has introduced various initiatives to facilitate uptake, such as the upcoming framework on Generative AI. Most recently, the Government has invested over S$1bn into AI computing, talent, and industry development over the next five years.

Alongside, employee education & training is coming up as a huge opportunity for businesses this year and beyond. In this regard, Singapore has recently launched the SkillsFuture Level-Up Programme to better support mid-career workers. This includes monthly training allowances and a top-up in SkillsFuture Credits amongst other forms of support.

Currently, Singapore's business landscape stands at a crossroads where challenges and opportunities intersect. The struggles faced by SMEs in talent attraction and retention demand focused attention, especially given their large role in the nation's economic landscape. In navigating the path forward, it is essential for businesses to leverage these opportunities.

Amidst this shift, digital transformation has never been more pertinent; having the right partner and tools in place might be just what every SME needs to take their business to the next level.

That’s where Employment Hero, an all-in-one HR, payroll and recruitment platform comes in. It’s one of the fastest growing SaaS companies with the mission to make employment processes easier and more rewarding for everyone.

To learn more about the team and gain more detailed insights into the SME landscape for 2024, download Employment Hero’s free report here.

Lead image /  123RF

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