Full of eastern promise?

Cambridge Online survey of East of England service companies reveals 48 per cent slashed staff numbers over the past year, but things are looking up

Almost half of business services companies in the East of England reduced staffing levels by more than 10 per cent during 2009/2010.

The shock results come from service provider Cambridge Online. The company examined business service companies from nine counties in the region for its first annual East of England Regional Business Survey to determine what are their business plans for growth and investment, and how they use IT within their business.

Firms questioned included IT suppliers, shop fitters, business consultants, printers and recruitment agencies. Nearly a third (29 per cent) reported a drop in sales by more than 25 per cent during their financial year 2009/10, compared with an average of 18 per cent across all business sectors during the height of the recession.

A total of 48 per cent reduced staff numbers by more than 10 per cent, nearly double the regional average of 29 per cent. In addition, 19 per cent of business services firms sold off or closed less profitable parts of their business during the period.

Some 42 per cent of respondents said they regret not innovating earlier in the recession to create new income streams. On a more positive note, however, the worst appears to be over, as only five per cent report plans for new staff cuts and only one in 10 are looking to introduce new pay freezes.

Two thirds of business services companies also believe the East of England is ideal for accessing the skilled employees needed to grow business.

More than half (52 per cent) said their top priority is getting new customers, and 43 per cent of those surveyed use a CRM system, claiming that maximising sales opportunities is the main reason to invest in CRM.

Those questioned also said finding people with the right skills is a "significant factor" holding back business growth, with only the health of the wider economy and increased price sensitivity ranking higher.

Interestingly, 24 per cent of business services companies named acquisition or partnership as an opportunity to grow, compared with a national average of 16 per cent.

In terms of new technology, developing a social media strategy is of great interest to the surveyed firms, with 24 per cent saying IT budgets are set to increase.

Ray Olds, chief executive of Cambridge Online, said: “Early on in the recession, business services companies were hit hard and fast as businesses quickly cut their spending. These businesses needed to innovate quickly to find new revenue streams and bring on new customers to stem the loss of their regular business.

"Business services companies are now turning the corner and gearing up for growth – using IT more effectively, getting the most of CRM to exploit every sales opportunity, and exploring the benefits of social media are priorities for these businesses.”