The UK economy is in a strange place. Employment figures are at a record high, but overall growth remains sluggish. Rosier figures for the long-term health of the economy come along, then they’re downgraded. Small businesses are flourishing, but major high street retailers are going out of business on a weekly basis.

One clear and strong success story, however, is the UK tech industry. Showing amazing growth and proving attractive to investors, there seems to be no slowing the sector.

The Facts

Fresh figures from Tech Nation have echoed other sources in showing the tech industry is growing 2.6 times faster than the rest of the UK economy. In 2016, it was worth £170 billion, in 2018 this figure has grown to £184 billion. The report also showed that, outside of London, there are 16 ‘silicon suburb’ towns across the UK with a much higher than average tech employment rate, with towns like Bristol leading the way.

The report also underlined how fast tech firms in the UK are growing. UK GDP grew by 1.7 percent in 2016-17, but over the same period the tech sector grew by 4.5 percent. Alongside this was a five-times rise in the number of jobs in the tech industry, making it one of the healthiest and fastest growing employment sectors.

The Investment

All of this growth inspires, and in turn is fuelled by, a great deal of investment. International investors were particularly enthused by the UK tech industry, pouring money into firms in the hopes of finding the next Deliveroo or Zoopla. In 2016-17, British tech companies raised a total of £4.5 billion from venture capital sources, a doubling of the previous years total.

This could be, in no small part, due to the fact that many of the UK’s tech firms have an international reach and investors see great technology with an in-built global reach. A full third of London tech businesses, for example, have foreign clients, which outstrips the reach of California’s Silicon Valley. Domestic and foreign investors are seeing companies that have a bright future, very healthy growth and international reach. So, it should come as no surprise UK tech companies represent an attractive investment.

This has been shown in a number of high profile exits. Machesterfashion.com was sold for £750 million to a private equity investor and Leeds firm CallCredit was purchased for £1 billion. The incredible growth and underlying base for UK tech firms is providing fertile ground for firms with good ideas and the drive to succeed, with buyers and investors on hand to capitalise.

If you’re an ambitious tech firm, take a look at our business finance and capital investment options, we can help you get your hands on the money you need to move forwards in one of the most vibrant, successful sectors in the world. 

One of the biggest challenges facing SMEs is always finding the right staff to add to the workforce. It’s a perennial issue and something that businesses in every sector deal with. The right employee can add enormous value to a business, whilst the wrong choice can have serious impacts on smaller businesses.

With new figures  revealing a paucity of workers, with Brexit further impacting the numbers, what does this all mean for SMEs?

Employment is High

Employment numbers in the UK currently stand at their highest for nearly half a century – which is when records began, so this high is indeed a historic one. This is great in general terms for the economy and the workforce, but it also leaves SMEs with a much smaller candidate pool to source talent from.

34 percent of SME bosses revealed that they simply cannot find the right people to fill the vacancies they have. When surveyed, the main reasons bosses gave for this struggle were these: perceived lack of job security, absence of name recognition and a lack of perks to offer in contrast to bigger companies. Many bosses also pointed to the Brexit factor.

Brexit

The Office of National Statistics has borne this out. Their figures show that the European workforce in Britain has declined by 28,000 in a year. For SME employers, this means a scarcity of European talent, many of whom have the skills they need.

It’s a complex process, but there are concrete factors playing into the leaving of European nationals. The UK economy is recovering in fits and bursts, but not on a solid upward trajectory. At the same time, economic recovery in various EU nations is making the prospect of home seem much sweeter to many European workers in Britain. Playing into this is the mental aspect of Brexit. Many European nationals have found the political climate very different to when they first arrived in the UK and, as such, feel more comfortable returning to their home countries or other EU nations.

A Tightening Labour Market

With more people in work than there has been for 46 years and a loss of European candidates, SMEs are facing a labour market that simply doesn’t have the workers to give.

Access to skilled, talented employees is vital for SMEs to grow and thrive, so where are they going to get the manpower they need? One solution is government reform. Changes to the Tier 2 visa would enable more SMEs to find the talent they need internationally. Aside from this solution, SMEs are going to have to get creative and proactive in finding the right candidates, emphasising their future potential and current benefits. 

With GDPR now in full effect, a huge number of UK businesses – large and small – are still leaving themselves open to data theft. For those companies that do fall victim to targeted attacks seeking valuable data, this could have very real financial repercussions under the GDPR framework.

New figures have shown that millions of UK businesses are currently using data storage methods that are not fit for purpose. To find out how your business could fall prey to GDPR, and how to avoid penalties, read on.

The Facts

The survey – conducted by Beaming – revealed that 4 million UK businesses are extremely vulnerable to data theft. The figures show that nearly 1 million UK businesses do not back up their data at all.

A further 2.8 million businesses do back up their data but keep these copies in the same storage space as the original data, simply providing another avenue for a determined hacker to access. It was found that 44 percent of small businesses do this, and so too do 42 percent of medium-sized concerns. Worst of all, 17 percent admitted to not backing up data at all and leaving it on in-office computers and employee devices.

Compliance

With these shocking figures in mind – and the attendant potential fines – here’s what you need to do ensure compliance for your business.

You need to ask yourself why you need the data you hold. Under GDPR, these reasons are known as a ‘lawful basis’. There are six categories why an organisation or business may need to retain, and process data and they are: contract, legal, consent, vital interests, obligation, legitimate interests and public task. You need to know which categories apply to you and why you need to retain this data.

Next, you need to know how to deal with individual rights requests. These are the legitimate and legal rights every person has. You need to be able to explain why you have their data and, if they ask, you need to be prepared to delete it from your records. It’s compliance issues like this that make it important to establish if you need a Data Protection Officer in your business. This person will be responsible for overseeing and monitoring your GDPR compliance.

Importantly, you need to be clear and able to explain how you store data. We’ve seen some of the horror stories above, and you need to be clear and consistent in how data is stored at rest, in use and when transmitted to another party.

Finally, you need to prepare for the worst-case scenario of a data breach. Who will report it? Who needs to be notified? You need to be fully aware of what to do if a breach occurs.

If you can work through this list and give clear, well-planned answers, then you are in a good place with regards to GDPR. 

The Office for National Statistics has released its latest report on the UK labour market last month, painting a healthy picture of employment and work in the UK.

The figures cover every aspect of the labour market and delve into the outlook going forward. Here, we’ll take a closer look at the numbers, what they mean for the UK economy as a whole and for SMEs in particular.

Earnings up, Unemployment Down

The latest tranche of figures from the ONS revealed that there are now 32.34 million people in work in the UK. This is a sizeable increase of 396,000 in the last year, illustrating that businesses are shaking off the restrictions of the austerity period and not fretting too much about any economic impacts related to the UK exiting the European Union. 

At the same time, unemployment dropped to 1.42 million, the lowest it has been since the ONS began collecting figures in 1971. Compared to the same time last year, this represents a reduction of 116,000. This paints a healthy picture of the job market and overall productivity for UK firms.

There was also good news for workers as average weekly earnings rose by 2.9 percent over the previous year. This can only mean good news for the UK economy as people see more monetary inflow and, in turn, will be more willing to spend. Contrasting with previous years, when disposable income was an almost dead concept for many consumers, this represents good news for UK businesses of all kinds.

Workforce Jobs

The ONS report also takes measure of workforce jobs, which focuses on the different roles that workers fill. Whereas employment is an estimate of people in work – where one person may have more than one job – workforce examines the types of roles people are filling.

A number of sectors saw considerable growth in their workforce, with teaching being the main outlier, showing a quite drastic reduction in its numbers. The manufacturing, construction, administrative and human health fields saw very healthy growth.

For small and medium businesses operating in this sector, the numbers are very encouraging. The increased numbers in workforce jobs means that these vital areas of the UK economy are seeing expansion and, therefore, increased business. In the past few years, employers – especially those in smaller and medium-sized concerns – have been reticent to take on new employees due to volatile economic factors. Now, it seems, employers of all sizes in these sectors are feeling a renewed sense of optimism. 

If your SME is feeling buoyant and has expansion plans, why not speak to GIC Capital about our business loans and business overdraft options to help you move forwards?