Businesses in the North of England, who hire experts to plug skill gaps within their own workforces, were found to spend over three times as much (£43,000) on consultants every year, compared to those in London (£12,600). This is despite there being over a third more registered businesses in the capital compared to the North.
This insight is reflected by data, which shows small business owners in the North, on average, spend 48 days per year accessing and briefing external experts. This equates to 20% of the total number of working days available in 2017.
In spite of this heavy annual financial and resource investment, a high proportion of northern businesses still cannot obtain the necessary expertise they require in-house through training. The research, commissioned by Zeqr, identified nearly a third (30%) find areas such as; accountancy, cyber security and IT support are in short supply, while over a quarter (28%) admit they cannot find skilled personnel who specialise in insurance or recruitment.
These discrepancies imply small business owners rely on and are faced with a limited pool of experts in the North. This suggests these experts, due to locality, have monopoly over businesses and can charge inflated fees. This becomes apparent as 30% of businesses in the North claim the consultants they have hired weren’t value for money. When asked why, northern businesses owners cited:
- The advice given didn’t meet their business requirements (70%)
- Fixed fees were inefficient (54%)
- Advice was either too complicated (24%)
- Long terms contracts (16%)
- Unprofessionalism and inflexibility (16%)
The data also uncovered businesses in the North hire up to 43% more consultants every year, compared to their southern counterparts.
Nationally, the research revealed nearly half (43%) of small business owners expose themselves to the best talent by relying on an existing pool of suppliers they have met through business networking.
This reluctance to spend time finding new suppliers and limiting their talent pool is due to the fact that over a quarter (28%) of business owners feel that this time could be better spent bringing in revenue and working on billable projects.
Business expert and author, Dr David Fraser, commented: “Smaller organisation should not be attempting to source all the expertise they need internally. That’s not affordable – but nor is the kind of exorbitant fee larger consultancies typically want to charge, often for recycled material not really tailored to the true needs of the client.”
“There’s definitely a need for an efficient way for businesses to access diverse external expertise in an only-buy-what-you-need fashion and, of course, the best external experts will always put the client’s needs ahead of their own business goals. Buyers should look for quality and experts who truly understanding their issue.”
Daniel Hedlund, Co-Founder of Zeqr, comments on the findings: “We launched Zeqr after struggling ourselves to access experts to advise on business queries. We found we were limited to flat rates and project fees which far exceeded the very specific and small pockets of advice and expertise we searched for.”
Hedlund explains, “We commissioned research as we wanted to further examine the consultancy landscape in the UK – our aim was to learn whether locality impacted on the ability to access and brief external consultants. With this, we were to know exactly how much time and money small businesses spend sourcing experts in a range of key business areas. The results reveal that this investment is huge but with businesses often relying on an existing pool of suppliers, resulting in less than satisfactory outcomes that don’t help their bottom line.”
- Survey of 250 UK small business owners (with 49 employees or less based in an office environment) undertaken by One Poll in March 2017
- A Zeqr spokesperson is available for comment
- Figures calculated based on the estimate that there are 5.4 million SME’s in the UK. Source: BIS, Business Population Estimates inresearchbriefings.files.
parliament.uk/documents/ SN06152/SN06152.pdf
