It’s been one of the most challenging years in recent memory for the UK SME sector. According to research carried out as part of our Small Business Monitor, firms have faced continued worries about income, fears about the time it will take to recover, and anxiety around keeping their employees safe and secure.
And while there was some positivity about the future for many of the SMEs we engaged with, particularly in terms of maintaining staff numbers, the second wave and subsequent lockdown in England caused yet more problems for companies.
Our study found that, nationally, almost three quarters (73%) of smaller firms saw their income reduce during the pandemic, with 46% reporting that it had fallen by up to 50%. 62% of SMEs expected their income to remain subdued over the next 12 months, with 42% saying it will be reduced by up to 50%. A small but not insignificant 5% of firms don’t expect to recover any income at all over the coming year
Despite the immense challenges, it has been encouraging to see how small businesses have adapted and embodied the entrepreneurial spirit our country is famous for. However with many looking set to face continued income issues, it is important to remember that, when the situation starts to improve, workers will be vital to their recovery, hopefully repaying the support they have received from their employers during the pandemic in the form of determination and commitment.
This means bosses will need to look after their workers more than ever and, in a financially depressed environment, help them make every pound count. With our research showing that both employers and employees value workplace services that help with financial wellbeing issues, offering benefits such as discounts on the weekly shop or free financial advice are both good examples of how you can show workers how valued they truly are.
We cannot ignore the impact on people’s mental health either, with those on furlough for a second time likely worrying if they’ll have a job at all come the new year. Three out of 10 (29%) small businesses who took part in our study worried about the impact the coronavirus pandemic is having on the mental wellbeing of their employees and, when asked about the worries raised by their staff, 42% said employees feared losing their jobs, 39% said employees worried about the health of their loved ones and 38%of employers said workers worried about the impact on their personal finances.
Encouragingly we found that mental wellbeing support is the most sought-after benefit among smaller firms, with 25% of UK SMEs keen to introduce it within the next six months. Next is payroll savings (24%), followed by health insurance and services, cycle to work and technology discounts (22%).
With so many firms clearly seeing the value of offering support with regards to mental health in particular, over the next six months we hope to see a growing number of bosses making use of tools like wellbeing applications, to help employees handle concerns with regards to mental health as we move through the crisis.
Of upmost importance for employers now is taking a long-term view when approaching support offered to employees as, not only will this have a lasting impact on loyalty, but also how a company is seen by others looking to do business with it.
Our Small Business Monitor is based on research carried out by 3Gem during the Summer of 2020 among 750 senior financial and HR decision makers in UK SME companies with 5 - 250 employees. To get your copy, email us at firstname.lastname@example.org.*