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The SME Challenge

The challenge with SME's and ethical compliance in the construction industry
The letters S M E with the words small and medium enterprises
© CIOB Academy

Small and Medium Enterprises (SME’s) account for over 99% of the overall population in each of the main industry sectors and are therefore distributed similarly to the business population overall. This is according to the Department for Business, Energy & Industrial Strategy, Business Population Estimates for the UK and Regions 2016, 13 October 2016

At the start of 2016, in accordance with the Office of National Statistics, Output in the Construction Industry, No. 17, 2016 Edition, out of 273,775 private contractors on the BIS Builders Address file.

Just under 20% (975,000) of all SMEs were operating in Construction. 96% had 13 employees or less.
38% had 2-3 employees. Only 58 companies had 1,200 employees or more.

The nature of the construction industry is that a significant amount of work is completed by SME’s in the supply chain. Large organisations will often be very aware of ethics, but also have greater challenges ensuring implementation of ethical policy and procedure, and legal requirements are adhered to. This is especially important in their supply chains, who are often SMEs. They may even have compliance officers in place to support this.

By contrast the SME sector has a more varied level of awareness of the legal requirements, and may not always have policies and procedures in place, because there is a matter of scale to contend with. This can be a risk to both themselves, and to the organisations they supply to.

Comment below on: How many of these companies do you think are talking about ethics?
How many of them know what they have to do legally?
How many of them have policies and procedures in place? Add your views and experience.

© CIOB Academy
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Construction Ethics and Compliance

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