How Labour’s new changes will impact the UK SME community and their employees

As the UK grapples with economic challenges and a rapidly evolving workforce landscape, the Labour’s new manifesto promises a transformative impact on the SME community and their employees - but will they live up to their promises? Here’s my take.?

Empowering SMEs with AI

One of Labour’s key commitments is to enhance AI skills development and protect jobs with better safeguarding. As someone who experienced, and helped navigate, the technological advancement from desktop to cloud (during my time as MD for Xero Asia) I welcome this initiative.?

But it won’t be an easy ride. Labour have called for more safeguarding around job losses, which is absolutely right. But we can’t ignore our SME community, who are currently lagging behind in AI adoption.

These businesses need to be future-ready. But they need help to get there. Employment Hero is here to do that. AI adoption doesn’t need to be scary, it doesn’t need to involve massive training budgets. You don’t need to be a software developer to understand and use AI in your daily job - that’s a myth.?

In fact, if you use a platform like Employment Hero, you’re probably already using AI without knowing it. AI can help us all become more efficient in our roles, and provide better work-life balance in the long run.?

Access to finance and late payments?

Labour’s plan to improve access to finance is a much-needed lifeline for SMEs looking to scale. Financial barriers have long hindered the growth potential of small businesses. Late payments have been a perennial issue for SMEs, significantly impacting cash flow and business stability. I can’t tell you the amount of business owners who’ve told me they spend their weekends running payroll or dealing with late payments. So yes, Labour’s commitment to tackling this problem will provide much-needed relief. By ensuring timely payments, SMEs can manage their finances more effectively, plan for the future, and invest in growth opportunities without the constant worry of cash flow disruptions.

Creating job opportunities

Labour aims to create more jobs through the creation of a new publicly funded business; Great British Energy. That’s all well and good, but building a new business takes time - we all know that. There are currently 9 million long-term unemployed people in the UK, and they need jobs now.?

Investment in recruitment technologies is vital, as the current system is failing both employers and job seekers. Employment Hero has a solution - we’re offering all UK SMEs free access to our AI talent matching tool, , which connects employers to pre-vetted talent quickly and efficiently, reducing hiring costs and time.

Boosting exports

Labour’s focus on boosting exports is a strategic move to diversify revenue streams for SMEs. By opening new international markets, businesses can mitigate risks associated with domestic market fluctuations and potentially scale. Exporting is a minefield - take it from me. The government needs to provide clear, concise guidelines to SMEs before they tackle this challenge.?

The government needs to provide clear, concise guidelines to SMEs before they tackle this challenge.?

Flexible working?

Finally, the government is taking flexible work arrangements seriously.? Labour’s plan to make flexible working the default from day one and improve parental leave policies aligns with the needs of modern workers. This isn’t just a post-pandemic phase; remote work is here to stay. Time and time again Employment Hero data reveals that flexible working options is the no.1 perk requested by employees. Stop forcing your employees back into the office - it makes them unhappy and less productive.?

However, I do understand why businesses are worried. They are yet to be given any guidelines around building a successful remote company. Employment Hero is a 100% remote tech unicorn employing over 1,000 people across 4 continents, so we have the first-hand experience to help with that.?

There’s potential for Labour to address the real challenges facing SMEs: access to talent, finance and AI tools. If they play their cards right, Labour could pave the way for a more robust and resilient SME community.?

As always, Employment Hero is here to champion every SME across the nation. We will continue being your voice, fighting for better, fairer employment for all.?