Small and medium-sized companies’ confidence about their business prospects has slumped in the past year as uncertainty about the ongoing Brexit process has increased, new independent research for MetLife UK shows.
Its study among firms employing between 50 and 300 staff, which make up around 34,000 companies employing more than 3.3m people found that just half (49%) are optimistic about their future over the next five years. That is dramatically lower than the 76% who said they were optimistic when MetLife UK conducted the research last year.
Even more concerning is the increase in pessimism about business prospects over the past year – nearly a quarter (23%) of businesses are concerned about the next five years compared to just 7% when MetLife first researched the issue.
Nearly one in three (30%) identify Brexit as the biggest issue preventing their business from growing with 34% of smaller businesses employing between 50 and 99 saying it was their biggest concern. The next biggest issue was increased competition which was blamed for holding back growth by 22% of senior managers.
Uncertainty caused by Brexit has become the biggest issue for SMEs in the study 44% said it was their biggest concern with 20% saying it was a major issue. In fact, the uncertainty exceeds that of profitability, which 39% said was a major issue.
Worries about how to respond to Brexit are driving increasing interest in seeking advice from consultants and advisers on how to handle the challenges, nearly two out of five (39%) say they will seek advice over the next year compared with 32% when MetLife UK asked the question a year ago.
However, MetLife’s research found SME bosses are split over whether completing the Brexit process or cancelling it would be better for their business. Around 34% say completing the UK’s withdrawal from the EU will increase optimism while 35% believe cancelling Brexit will increase optimism. Businesses in the North West and Scotland were the most in favour of cancelling Brexit with 46% in the North West and 42% in Scotland saying it would boost optimism.
Adrian Matthews, Employee Benefits Director, MetLife UK said, “On the face of it it’s good news that nearly half of SMEs are optimistic about their business prospects for the next five years but the contrast with a year ago is stark.
“It is worrying that so many firms are pessimistic and clear that SMEs, which make such a major contribution to the UK economy, need support and guidance as the UK heads towards another deadline of 31 October 2019.
“At a time of uncertainty, it is important for organisations to look at their people strategies and look to reinforce confidence in their employees about their prospects Group risk benefits, as part of an overall employee benefits strategy, can make a significant difference to SME staff retention if positioned as part of a compelling employee value proposition. This in turn enables businesses to concentrate resources on other priorities”
MetLife UK is established as the UK’s third largest Group Life provider by number of schemes it insures3 and the sixth largest Group Income Protection provider by in-force premium.