WorkLife’s latest Small Business Monitor reveals that 29% of SMEs have been forced to furlough staff since November 2020, with a quarter (25%) cutting staff hours. More than a fifth (22%) have reduced pay, while 20% have been unable to offer an annual salary increase.
With job losses now on the horizon and The Bank of England predicting that unemployment will peak at 5.5% when the furlough scheme eventually comes to end, WorkLife’s analysis finds that a mix of both permanent (14%) and temporary (9%) SME jobs are potentially at risk.
When it comes to income, while almost a third (31%) of firms are taking a positive outlook and expecting revenue to increase, 45% think their income will remain subdued over the next year, indicating why the future for some workers might be looking so uncertain.
Against this backdrop, employees are clearly feeling the strain. Some 90% of firms say their employees have approached them with worries since November last year, with concerns about losing their jobs (32%), the impact of the pandemic on their personal finances (28%) and their salary reducing (21%) high on the list.
WorkLife director Steve Bee says this demonstrates a need for employers not just to rebuild their businesses, but also the confidence and wellbeing of their staff.
Bee commented: “While the past year has been tough for bosses, things haven’t exactly been rosy for their employees, many of whom now face continued job insecurity alongside higher living costs due to rising inflation. So, while ensuring the business is equipped to meet future operational challenges will be crucial, just as important will be supporting the wellbeing of staff as we move through the recovery phase.
“For firms facing continued income issues and thinking they might need to cut employee numbers, it’s important to note that the most valuable support won’t come through direct and expensive remuneration, but rather by embracing flexibility and offering genuine understanding towards people’s worries and concerns. This might be achieved through allowing people time away from work to interview if they’re facing redundancy, or looking at offering low-cost benefits such as shopping vouchers to boost people’s pay packets if they’re not getting an annual salary increase.
“Whatever situation the business is in, over the next few months a key priority should be providing an affordable but meaningful benefits package for staff that provides genuine support for the day-to-day challenges they might encounter”
WorkLife’s Small Business Monitor is based on research carried out by 3Gem among 750 senior financial and HR decision makers in UK SME companies with 5 – 250 employees. Fieldwork took place 14 to 22 March 2021.