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3 developments SMEs need to consider in 2024
Joep Hoeks, Chief Product Officer at Exact, gives tips for the coming year
2023 has been a challenging year for many entrepreneurs in the Netherlands. Although inflation fell in 2023 compared to 2022, the consumer confidence index was negative throughout the year. More enterprises also went bankrupt in 2023 than in 2022 and the labour market remained very tight. Will 2024 be a better year for entrepreneurs? As the end of the year approaches, it’s traditionally time to look forward. We decided to do this together with our Chief Product Officer, Joep Hoeks. In this article, he talks about what developments lie in store for SMEs and their accountants in 2024. He also gives some tips on how to anticipate them.
1. “Efficiency gains are a must to stay ahead in these economically challenging times and automation is the catalyst”
Economic outlook for 2024
As the CBS figures show, the Netherlands is officially in recession with three quarters of economic contraction. And zero economic growth is forecasted for 2024. The prices of energy and raw materials remain high due to the geopolitical situation. In addition, we are expecting interest rates to stay high in 2024, which will have a significant impact on many entrepreneurs. It makes investing a lot harder, in your own organisation or in specific capital equipment such as machines. ING therefore predicts a 1.7% fall in investment in 2024. In addition, wage costs will rise significantly in 2024, which will affect labour market dynamics. Labour will become less affordable in 2024, which could lead to rising unemployment. Nevertheless, many enterprises will still find it difficult to find the right people in the coming year, so this recession is therefore quite an exceptional one.
As the CBS figures show, the Netherlands is officially in recession with three quarters of economic contraction. And zero economic growth is forecasted for 2024. The prices of energy and raw materials remain high due to the geopolitical situation. In addition, we are expecting interest rates to stay high in 2024, which will have a significant impact on many entrepreneurs. It makes investing a lot harder, in your own organisation or in specific capital equipment such as machines. ING therefore predicts a 1.7% fall in investment in 2024. In addition, wage costs will rise significantly in 2024, which will affect labour market dynamics. Labour will become less affordable in 2024, which could lead to rising unemployment. Nevertheless, many enterprises will still find it difficult to find the right people in the coming year, so this recession is therefore quite an exceptional one.
Efficiency gains are a must to stay ahead in these economically challenging times. And I believe automation can be the catalyst for this,” Joep Hoeks says. “Automation makes it possible to get more work done more quickly with fewer people. This applies to operational, financial and HR processes. Automation also gives you structured data, which allows you to gain better organisational insight. Take accounts receivable management, for example: a smart automation system shows you how many outstanding invoices you have, but also sends your customers automatic payment reminders based on their customer profiles in the right tone. Customers who often pay late will get firm reminders and those who usually pay on time will get a friendly reminder. The reminders will have an integrated payment link, a handy tool that will improve your cash flow and provide up-to-date insight into your current financial situation. An order and stock management system ensures you always have the right quantity of products in stock and you know exactly at what times of the year you need to increase your stock for fast delivery to your customers. In short, automation helps you to work more efficiently, but it also helps you to make better-informed business decisions and grow.”
2. “Enterprises that embrace innovations like AI while keeping an eye on the personal touch will be more successful in 2024”
Technological outlook for 2024
There's a well known saying: if you're not moving forwards, you're moving backwards. Our fast-moving 24-hour economy demands a lot from entrepreneurs and requires a high degree of agility. This trend will certainly continue in 2024. In line with this, we can see that generative AI will continue to develop with even more application. These include chatbots to support customer service, and also the development of new products and marketing campaign. However, AI's further efficiency boost and deployment often leads to manufacturing and service delivery on a mass level and an impersonal approach, now that the need for personal contact and tailored experiences are set to become more important to consumers in 2024, as forecast by global research and consulting firm Gartner.
There's a well known saying: if you're not moving forwards, you're moving backwards. Our fast-moving 24-hour economy demands a lot from entrepreneurs and requires a high degree of agility. This trend will certainly continue in 2024. In line with this, we can see that generative AI will continue to develop with even more application. These include chatbots to support customer service, and also the development of new products and marketing campaign. However, AI's further efficiency boost and deployment often leads to manufacturing and service delivery on a mass level and an impersonal approach, now that the need for personal contact and tailored experiences are set to become more important to consumers in 2024, as forecast by global research and consulting firm Gartner.
“I strongly believe that entrepreneurs should embrace technological innovations, but also that they should keep their eye on the personal touch,” Joep continues. “In my view, enterprises strike the right balance between the two will be more successful in 2024 and in the longer term. AI will not replace people, but it can be a valuable addition to human work. When software focuses on simple, routine tasks, people can be deployed in more creative roles. That creativity is important in 2024. It allows you to differentiate yourself and give customers that personal touch. You can find creativity in yourself, but also in collaboration with other parties. That is because joining forces leads to dynamic platforms with many advantages for users. Exact also invests heavily in user experience. We know that technological progress is great, but also has an impact on our well-being. The average Dutch screen time is – hold onto your hats – about 5.5 hours a day. We know that consumers want to reduce their screen time in the coming year, and that can do that with applications that are faster, easier and more user-friendly. This user experience trend is not just about software. It's about customer service too, for example, whatever makes it easier to reach consumers in a more personal and efficient way."
3. “Be a responsible entrepreneur and employer: set measurable targets”
Social outlook for 2024
This trend has been going on for some time, but enterprises that are not making sustainable and ethical choices by 2024 will miss the boat. Responsible business is therefore not just about the impact we are having on the environment. It is about the impact we are having on people too. Carbon reduction is important of course, but paying attention to the local environment your enterprise operates in is at least just as important. So is being a good employer. A study by the European Investment Bank shows that 76% Europeans of under 30 consider the climate impact of employers when going for a new job. Looking more closely at what people want from their employer, growth and personal development are extremely important. A recent study GoodHabitz shows, for example, that 45% of Dutch employees tend to start looking for a new employer if their existing employer doesn't offer them sufficient personal development opportunities. A good work-life balance is very important for 80% of respondents in their choice of employer.
This trend has been going on for some time, but enterprises that are not making sustainable and ethical choices by 2024 will miss the boat. Responsible business is therefore not just about the impact we are having on the environment. It is about the impact we are having on people too. Carbon reduction is important of course, but paying attention to the local environment your enterprise operates in is at least just as important. So is being a good employer. A study by the European Investment Bank shows that 76% Europeans of under 30 consider the climate impact of employers when going for a new job. Looking more closely at what people want from their employer, growth and personal development are extremely important. A recent study GoodHabitz shows, for example, that 45% of Dutch employees tend to start looking for a new employer if their existing employer doesn't offer them sufficient personal development opportunities. A good work-life balance is very important for 80% of respondents in their choice of employer.
Entrepreneurs have long had a responsibility to contribute to people and the environment, but in 2024 it is important to set concrete and measurable targets as well. With a view to the legislation implementing the Corporate Sustainability Reporting Directive (CSRD), for example. Although smaller enterprises will not have to provide such sustainability reporting until after 2026, it will affect them sooner indirectly, for example if they are supplying goods or services to larger enterprises. What exactly your enterprise will need to report on will vary from industry to industry, but generally climate impact will play a key role. We also believe that we must make responsible choices, which is why Exact has drawn up a comprehensive responsible business programme as an integral part of our operations strategy. This means it's not a separate department, but a joint responsibility. That employee involvement is important to really make a difference. We want to halve our emissions by 2030 compared to pre-2019 levels. Earlier this year, we saw we had reduced our footprint by more than 30% already. However, we have also set targets in terms of diversity in our workforce, development opportunities and our contribution to the local community. For example, all Exact employees have the opportunity to volunteer three working days a year. That is something I like to engage in personally as well. Another good example of how we want to help people strike a better work-life balance is our pilot to work from another country one week a year,” Joep adds.
In conclusion
We can summarise by saying that efficiency is the word of the year for 2024. Joep Hoeks concludes: “Absolutely, and not just from a business perspective. You can work more efficiently by focusing on automation and new technologies. This then leaves more time for other things, such as creativity and personal contact with customers, but also for personal development and a good work-life balance.”
In conclusion
We can summarise by saying that efficiency is the word of the year for 2024. Joep Hoeks concludes: “Absolutely, and not just from a business perspective. You can work more efficiently by focusing on automation and new technologies. This then leaves more time for other things, such as creativity and personal contact with customers, but also for personal development and a good work-life balance.”
