Rising inflation has already cost UK SMEs an average £186,249 each according to a landmark nationwide survey released today by Fiverr.
The study – conducted amongst 1,000 SME owners and decision makers across the UK – found that 85% of UK businesses say their companies have lost money in recent months as a result of rising inflation and increased living costs.
As a knock on effect, over 1 in 5 (22%) of SME owners say they have had salary increase requests from staff, 21% are experiencing longer working hours and 24% cite reduced morale.
Despite the gloomy economic outlook, 56% are feeling optimistic about the future of their businesses. And to weather the storm, 29% plan to implement more remote/ hybrid options to accommodate for less overheads and physical costs and 34% are putting better measures in place to prepare for future inflation rises.
Among the worst impacted industries were arts and culture with an average loss per business of £280,790, HR (£254,107) and architecture, engineering & building (£244,104 loss).
50% of businesses blame the UK government for being unprepared for the rising inflation and 23% plan to reduce their headcounts to mitigate rising costs.
With cuts to permanent staff, 1 in 4 SME leaders say they have turned to freelancers to help plug talent gaps during busy periods.
Peggy de Lange, VP of International Expansion at Fiverr said, “UK businesses have proven their resilience over the past couple of years but the cost of living crisis has undeniably delivered another obstacle on the path to recovery.
“Changes to headcount and working arrangements are unfortunately a necessary evil during cost-saving periods, but business leaders must continue to support their staff to ensure issues like reduced morale and longer hours do not turn into something more serious like a burnout.
“It’s therefore encouraging to see savvy business leaders turning to support like freelancers to plug any gaps during busy periods.”