KARACHI: A new research from the Association of Chartered Certified Accountants (ACCA) titled SMEs: Business challenges and strategic innovation opportunities revealed three main challenges: escalating costs, workforce management, and the evolving Environmental, Social & Governance (ESG) reporting agenda.

Over 5 million SMEs are operating, across Pakistans manufacturing, trade and services sectors, but this sector has not reached its optimum potential due to many challenges.

Professional accountants are in a unique position to make real, impactful changes and be at the centre of sustainable development. They can make strategic business decisions with a data-informed, ethical approach. The report recommended modern, tailored strategies to embrace innovation, optimise resource management and understand regulatory changes.

The SMEs sector comprises about 90 percent of exclusive private businesses, provides employment to 30 percent of the total workforce, contributes an estimated 40 percent to the annual GDP and 25 percent to the annual exports (with IT & ITES among major exports). It is playing a vital role in economic growth and poverty reduction.

More than 58% of businesses highlighted higher costs as their top concern and highlight the need for more effective cost management and innovative financial strategies. The research also gives a roadmap to enhance productivity, performance and sustainability of the SMEs in future.

A notable rise in job vacancies and challenges in filling specific roles was reported by 31% of businesses. There is a dearth of candidates for clerical workers, technicians, and service/sales workers. A renewed focus on talent acquisition, skill development, and retention strategies is needed.

Copyright Business Recorder, 2024