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Digitalization in SMEs: How New Work is changing everything

Remote work, flexible working hours and greater personal responsibility: digitization in small and medium-sized enterprises (SMEs) brings decisive advantages not just for the company itself. Employees have clearly taken a liking to the new digital working world, on which the Corona Virus (Covid-19) pandemic acted as an accelerator. What was once considered "new work" has now become the norm.

In this article, we will share what New Work is and how it has driven digitization in SMEs.

What is New Work?

The concept of "New Work" is constantly being re-imagined, but it has been around since the 1970s. Since the Corona virus crisis, the subject has been a hot topic in SMEs and in large segments of society, focusing primarily on Remote Working or “working from home”.

American professor Frithjof Bergmann developed the concept of "New Work". According to his definition, it encompasses an alternative to the wage labor system of the time, a model he criticized as outdated. In his view, the central values of the new world of work were freedom, independence, and participation in society - "New Work" was born.

Today, New Work encompasses several perspectives of modern working, the core of which is digitization and a new level of flexibility:

  • More flexible working hours (various working schedule models, part-time, etc.)
  • More independent work locations (home office, remote work)
  • Adaptable corporate structures, mindsets and habits (agility, knowledge transfer, connected, etc.).

The range of topics in particular makes New Work an interesting proposition for companies. However, many SMEs and even large companies only identify with one component of New Work and may be missing the bigger picture. For example, it is not enough to simply introduce a digital collaboration tool and call that’ jumping on the New Work bandwagon’. By focusing on only one element, neither holistic digitization nor new working methods are going to work for small and medium-sized enterprises. Nevertheless, work from home, flexible work locations and agile working methods are each a piece of the puzzle that heralds a digital workplace and New Work.

SMEs invest in digitization

The Covid-19 pandemic has accelerated digitization in SMEs and fueled a shift toward the Digital Workplace. Nevertheless, SMEs were already looking at modern work models beforehand for one important reason: An ongoing shortage of skilled workers. In recent surveys of both Global and US companies; more than 69%-80% are struggling to fill skilled positions; 50% report difficulty hiring qualified professional and office workers, and 69% are experiencing IT talent shortages.

Offering flexible working opportunities is considered one of the most attractive factors for attracting new employees. 80% of middle-market CEOs surveyed will continue to offer partial remote work even after the Covid-19 pandemic ends, calling flexibility a “smart business strategy”. The plan is working: Many employees are enjoying the digital office and believe that digitization relieves them of some of the burdens of their day-to-day work.  

Sources: The Conference Board, Everest Group, Manpower, Microsoft

Working from home is not the only solution for SMEs

Other employee surveys showed that 81 percent enjoyed working from home and the majority want that flexibility to continue. It has also been predicted that 36.2 million Americans will be working remotely by 2025, an 87% increase over the pre-pandemic rate.  The elimination of commuting, greater flexibility and the ability to better manage work, family, and leisure were cited as the greatest benefits. However, surveys also shows that for many people, working only from home is not their first choice. The lack of social contacts, the long communication channels with colleagues and not having access to all documents are the negative side of the coin for the majority of respondents. That's why the majority of employee surveyed are in favor of a hybrid approach - a mix that combines remote work with time spent in the office.

Sources: Harvard Business School, Upwork, McKinsey

For many SMEs, the sudden changes brought about by the Corona Virus pandemic were painstaking work in which a great deal of money was invested. Simply reversing them is therefore unthinkable for many. The "new" normal and the digital workplace will be established for a long time. The studies show many executives surveyed believe that the changed working world will continue even after the pandemic ends.

Where we work and how we communication with each other will have a significant influence on how New Work will look at SMEs. Facilitating exchange and work across departments with a central platform is necessary and will continue to be so in the future. Therefore, a decisive factor can be the choice of suitable software for process digitization and automation, with simple and recurring activities being automated. By using a central digitization platform that integrates digital data as well as documents, it is possible to work interconnected from anywhere. The goal should be to keep up with the "big guys" when it comes to digitization and not to go digital solely for economic reasons.

Nevertheless, the digital workplace means more flexibility, which must be understood and used by the workforce. This requires new skills and a different mindset about work. The entire workforce, regardless of their position in the company, must have a high degree of adaptability and willingness to change if digitization in SMEs is to succeed in the direction of New Work.

SMEs can use their decisive advantage over large corporations to implement New Work concepts: They are more agile due to their size. This means that changes can proceed quickly. According to a study by Ernst & Young, more than half of the employees surveyed are even looking forward to the future world of work. At the end of the day, one factor for corporate success should not be underestimated: That the workforce is satisfied.

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