Survival of the fittest: 1 in 2 SMEs forced to restructure as cost and manpower pressures intensify

Cost-cutting measures are now in full swing.

The combined impact of rising costs, manpower constraints and relentless competition is forcing local companies to adapt in order to remain competitive. According to the latest SME Development Survey released today, 51% of SMEs feel the need to restructure in order to fight back against ballooning business costs.

The survey, conducted by DP Information Group, was answered by 2,836 SMEs. Half of respondents saying that their main strategy is to rethink their business model.

Manpower issues are still a major concern among SME leaders. Nearly half of the respondents cited difficulty in hiring staff (49%) and high manpower costs (48%) as their top business concerns. Increasing competition was the third most common concern (45%), followed by high rental costs (31%).

“SMEs are fighting back and making dramatic changes in order to reduce their reliance on manpower and keep ahead of their competition. With half of all SME business models being re-evaluated, the next few years will see many SMEs undergo major transformations in order to survive,” said Chen Yew Nah, Managing Director of DP Information Group.