People are more important than IT in UK business

But a third of entrepreneurs say ìNever Againî

The Sage Heartbeat Survey, a new, ongoing study into the ups and downs of business life in the UK conducted by YouGov, reveals that investing in people is a bigger priority than investing in technology and research and development, as a skills shortage grips the nation. 43% of bosses feel that ësome or mostí investments in new technology have been a waste of money and are planning to invest more in training and salaries next year than in machinery or IT.

The Sage ëPressure Index[1]í, established from the survey, highlights the areas where business is feeling the biggest competitive threats. It identifies the biggest threat to business as a national skills shortage with a score of 0.73. Sage says this situation is at a highly dangerous level for business. The other areas of pressure on business were identified as new entrants into the market 0.44 and new services from existing competitors 0.12.


Many companies intend to invest in employees in the next year ñ instead of technology ñ but quite simply, qualified people are thin on the ground. To combat the skills shortage businesses are going to invest in a number of different areas: 45% are going to invest more in staff salaries; 43% in working environments; 39% in staff training; 30% in recruitment; and 22% in staff benefits.


Paul Stobart, managing director Sage UK commented, ìThe Sage Heartbeat Survey highlights the issues that are affecting UK business at the moment and investment in staff is a major priority with a perceived nationwide skills shortage. It is important to understand these issues so that regional and national businesses can work with the government to help address them.î


The survey has also found that there is pressure for business owners/managers to work more than a five day week, with 81% working at weekends and the ability to work from home is more likely to be found in smaller companies (54% employing staff that can work from home) than larger companies where 63% of staff are office-bound.

And although revenues and profits are rising ñ over a quarter (28%) say they would be unlikely to start a new business. A similar number (32%) says they would not actively encourage their children to start their own firm.


While the survey highlights a number of issues businesses face, it does not set out to understand why entrepreneurs would not want to set up again. Nevertheless, Sageís Business Heartbeat Survey does provide a number of reasons why British businesses may not want to do it all again despite the fact that in general they are upbeat about next yearís financial performance (71% expect turnover to increase next year).


Sage is keen to hear from business owners eager to explain why they wouldnít set up again. In response to these findings it has set up the ìThink-Twiceî telephone and email response line 0870 366 52094/thinktwice@sage.com, which will be one of several methods used to gain feedback and a greater understanding of the issues facing businesses in the UK. The results will be made available to both people looking to set-up in business as well as those that already run their own company ñ providing them with a valuable insight and advice. Only by understanding the reasons behind the Heartbeat Survey findings and sharing them with others, will the UK be able to create an environment where entrepreneurs can thrive.


Key findings:

Companies are to invest more in training and salaries than IT, research and development or machinery in the next year.

Two fifths of business people (40%) think that some of their IT investments over the last five years have been a waste of money. In Wales this figure rises to nearly half (46%). Men are more likely to say that IT has let them down than women. Many business people admit that they are failing to identify their own IT needs (39%).

Contrary to popular conceptions, business owners donít always work themselves into the ground. The average working week is just 47.65 hours ñ higher than the national average for employees, but just nine and a half hours a day.

Business owners rate their job as more important than their friends (except in London