Some 27% of UK employers are expected to make job cuts over the next 12 months while 13% say they will ask staff to take a pay cut.
That’s according to a survey by investment group MBH Corporation, conducted online between 21 and 23 August 2020, of senior executives and managers at a range of UK-based small to medium enterprises (SME).
Some 7% of respondents said they don’t expect to survive and 13% anticipate closing part of their business. Some 6% anticipate they will have to sell their businesses.
“Whilst there is no sugar coating for the effect the COVID-19 crisis has had on the small business ecosystem, it is pleasing to see how many were able to leverage off the government support and are positive about the way forward,” said Callum Laing, CEO of MBH Corporation.
“Optimism is an inherent trait of most small business owners and we’re seeing some incredible innovation as companies pivot to serve their clients best in these fluid times.
“We know that for many small business owners there have been many sleepless nights and tough conversations had over the past six months, but there are also plenty of businesses out there, not just in big tech, that have been able to find an angle and thrive during these fluid times.”
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Office for National Statistics (ONS) data shows that employers have axed 695,000 staff since March, and Britain’s unemployment rate ticked higher to 4.1% between May and July.
The claimant count, which includes unemployed and low-paid workers receiving work-related benefits, stood at 2.7 million last month, up 120.8% since March.
The government launched its furlough scheme earlier this year which was intended to help keep employers from sacking staff by subsidising up to 80% of their wages. It was optional for the employer on whether they wanted to top up the remaining 20% of wages.
However, the scheme comes to an end in October and many employers have warned that it needs to be extended to save jobs.
On 15 September, Britain’s chancellor Rishi Sunak declared the furlough scheme has “done what it was designed to” and resisted mounting pressure to extend support for hard-hit sectors.