New research conducted by Atomik Research on behalf of Shire Leasing has found that, for UK businesses, many hours of work each week are being lost due to equipment-related inefficiency, with 41% of workers within the agriculture, construction and mining sectors claiming that outdated or a lack of equipment hinders their ability to work on a weekly basis.
The survey asked 250 employees with purchasing responsibility for equipment about how frequently this equipment is being used, the proportion of which is outdated, and the effects of this on their productivity and business growth.
UK companies – including those in farming – own an estimated £93,800 worth of equipment that is used infrequently, with 3 in 10 employees reporting that their business owns equipment that does not work at all. This equates to almost £90,800 worth of broken equipment.
According to the survey, this is causing major issues with productivity. 85% of employees surveyed said that having to use outdated equipment – or even lacking the necessary equipment entirely – hindered their working ability. More worryingly, 13% said that this problem hampers their working ability on most days of the week.
In certain industries, only a relatively small proportion of equipment that a business owns is being used regularly. Across the agriculture, construction and mining sectors, respondents reported that only 29% of business equipment owned is used frequently.
With 49% of employees stating that a lack of funds for equipment has prevented their business from scaling up, there is more that needs to be done to address the gaps in awareness around available funding and alternative options for managing cash flow.
In terms of equipment finance, businesses across all sectors are most likely to pay upfront using company funds for new equipment (39%), with only 16% of those surveyed reporting that they lease or rent equipment. Leasing – and other forms of equipment finance – could alleviate some of the frustrations being reported, such as by spreading costs, allowing more flexibility when equipment needs to be upgraded or replaced, and fixing interest rates.
Mark Picken, Shire Leasing’s CEO, remarks: “SMEs often overlook the alternative finance options that are available. Through leasing, businesses can affordably pay for equipment as they use it, and in some cases, the single direct debit payment can also include the maintenance and service offered by the supplier.”
“Simple return or upgrade options also minimises businesses having to store obsolete equipment over the oncoming years, and fixing the interest payable in these times of rising interest rates is good plain business sense.”