Beyond the Autumn Budget: Technology Holds the Key to Future Growth

As the UK’s Autumn Budget brings cost increases across the board, businesses face tough decisions on workforce optimisation and spending. Automation and AI offers more than simple cost-cutting in this climate – it lays the foundation for highly productive teams, writes Angus Milledge, SAP Concur Sales Director for EMEA.

The UK’s 2024 Autumn Budget was expected to shake things up – and it has. Most notably for businesses shouldering the burden of the tax increases. The fiscal roadmap is aimed at stabilising the economy, but at a significant cost for the business community.

Among the biggest changes, National Insurance (NI) contributions for businesses will rise to 15% starting in April 2025, an increase projected to raise an additional £25 billion for the economy. The Institute of Fiscal Studies estimates that actual revenue may only reach around £16 billion because of anticipated wage freezes. Whatever, the actual number turns out to be, what is certain is that it will directly impact British business’ bottom-lines IF they decide to continue with the status-quo.

Add to that increases to the National Living Wage threshold, and for many businesses, staff hiring is expected to slow down.

The Economic Landscape: Challenges for Businesses

The Budget’s economic implications extend beyond NI contributions. The boost to GDP is expected to be temporary, dipping back to 1.5% after next year, and analysts expect it may spur inflationary pressure and interest rate increases – again. The new measures will naturally lead businesses to reconsider how they manage human capital, budgets, and strategic planning.

 

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Productivity improvements and cost efficiency will be key, especially for small to medium-sized businesses whose bottom lines are more sensitive to cost increases. For companies in people-rich sectors like retail and hospitality, where workforce costs are already a large portion of expenses, the challenge is even bigger.

In response to these changes, businesses need to adopt a proactive, technology-driven approach to effectively manage their operational costs. This budget doesn’t just change immediate financial obligations; it signals a transformation where tapping into technology and automation will be essential for maintaining competitiveness, and operational efficiency.

Human Capital Management and Productivity

For many businesses, the Budget will inevitably lead them to scrutinise their workforce management strategies. Rather than relying solely on hiring freezes or cutbacks, smart companies will invest in productivity-boosting technologies. For instance, automating routine tasks in finance and HR that can free up employees to focus on higher value-added tasks. Maximising productivity per employee will be a key differentiator in a time when human capital is expensive and difficult to scale.

As businesses look to absorb these rising costs without entirely passing them onto customers, productivity gains through automation will become a hard-saving measure rather than a soft advantage.

Why Automation and AI Matter More Than Ever

Automating spend management processes – like employee expenses and supplier invoices – can help businesses ensure they remain within budget and manage costs more effectively. Cutting down the time spent capturing data on expense receipts and supplier invoices through AI automation is the first key step in helping teams boost productivity. It’s the difference between an AP employee being able to process 500 invoices or 1,000 invoices a month. Or an expense claim taking an employee a whole afternoon to compile rather than being able to take photos of receipts in minutes and have an expense claim automatically created for them. But this is just one piece of the puzzle. 

There are time and cost savings to be gained through the higher accuracy of data captured through intelligent machine learning. Using technology to flag errors or duplicate claims and spot anomalies ensures a greater level of compliance, while employees can clearly see what spending is in policy and what’s not before it reaches the finance team to process. Another area where businesses lose a lot of time is during the spend review process. It can take days or weeks to get all the right levels of approvals – a problem that’s compounded when the expense claim or invoice is lost in someone’s inbox, or worse still, in paper form somewhere in the office.

Using technology to integrate processes more effectively will also be key. In fact, research we just released shows that companies using an integrated platform to manage spending saw 64% more efficiency and over 15% annual cost savings. By connecting spend management, payroll, and financial reporting in a single platform, companies gain a more comprehensive view of their spending in near-real time and can identify areas to optimise.

Businesses are turning to AI-driven insights within these platforms to enable real-time financial visibility and analysis, empowering them to make informed decisions quickly. Through the wide breadth of data SAP Concur has access to, serving over 53,000 companies worldwide, we can help companies in benchmarking and tracking productivity metrics across departments, enabling leaders to make informed decisions on resource allocation.

By embedding AI-driven insights directly into their finance systems, companies can set realistic productivity goals and continuously monitor performance, adapting as necessary in response to market conditions. AI-powered automation isn’t simply about cutting costs; it’s about achieving accuracy, compliance, and agility – qualities that businesses will need in the face of upcoming economic pressures.

Preparing for April 2025 and Beyond: A Multi-Faceted Strategy

To navigate these economic changes effectively, companies need a multi-dimensional approach that balances cost control, operational efficiency, and strategic investment. Budget planning will need to be highly responsive, identifying areas for cost reduction while ensuring that revenue-generating activities remain supported. This includes setting up cash flow buffers to prepare for the NI hike in April, and forward-thinking companies will already be assessing where they can streamline expenses without compromising growth.

Technology, and specifically automation, will play a central role in these preparations. By harnessing the potential of AI and adopting an integrated spend management approach, companies can ensure robust financial management that supports both present needs and future growth. In essence, the Budget changes aren’t just about increased costs; they’re a call to action for businesses to adapt to a new operational paradigm where efficiency, people power and data-driven insights are indispensable.

Schedule a call with us to understand how an AI-driven technology approach can help you navigate risk and get set up for growth in 2025.