More than one in five – 21 per cent – of smaller firms expect to lay off staff by September and 90 per cent of employers say their staff have approached them with worries since November 2020.
Research from digital employee benefits service provider WorkLife reveals that 29 per cent of SMEs have been forced to furlough staff since November 2020, with a quarter 25 per cent cutting staff hours, 22 per cent reducing pay and 20 per cent unable to offer an annual salary increase.
A total of 90 per cent of firms say their employees have approached them with worries since November last year, with concerns about losing their jobs a concern for 32 per cent, the impact of the pandemic on their personal finances a worry for 28 per cent and the risk of their salary reducing a concern for 21 per cent.
The Bank of England has predicting that unemployment will peak at 5.5 per cent when the furlough scheme eventually comes to end.
Almost a third of firms – 31 per cent – have a positive outlook about their future prospects, expecting revenue to increase, but 45 per cent think their income will remain subdued over the next year.
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.
The research was 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.
Bee says: “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.