Less than one in two UK small business owners expect to have made staff redundant by the end of the year (46%), as the nation’s traditional family businesses emerge as those fighting the hardest to protect their workforce – according to new research from Hitachi Capital Business Finance.
With fears of a national spike in redundancies when the Government’s Coronavirus Job Retention Scheme is wound down – the new Hitachi Capital data suggests the UK’s small business community is leading the move to protect jobs.
Whilst 46% of small business owners predict no reduction in headcount for the rest of the year, it was the nation’s more traditional family-run businesses that stood out as doing the most to look after their staff at a difficult time (57%).
They were more likely than the average small business to have given bonuses to their staff during lockdown (13%) and initiated one-to-one pastoral calls to support staff member wellbeing (12%).
They were also committed to improved sick pay for those isolating of suffering COVID-19 symptoms (15%).
Beyond supporting staff, family business owners were more likely than the average small business owner to have taken a personal pay cut (24%) or asked their staff to work fewer hours a week (27%) in order to protect staff numbers as a whole.
The extraordinary levels of commitment from family businesses to protect jobs results in them anticipating lower levels of job cuts by the end of the year – at just 7%. Significantly, these figures have nothing to do with taking pragmatic decisions based on cash flow, as family business owners reported a steeper decline in turnover for the year – a fall of 34% compared to a national average of 30% (and 29% for tech start- ups). Further, family business owners said they were in need of more funding to grow their business in 2021 – an average requirement of £69,000 compared to a small business average of £60,000 and £53,000 for tech-enabled start-ups.
Jo Morris, Head of Insight at Hitachi Capital Business Finance said, “To some, family businesses conjure up images of tradition, heritage and community such as the local store in TV’s ‘Open All Hours.’ Whilst family businesses may have more traditional values and outlook, our research suggests that caring and looking after people is often at the heart of their business. And this bodes well during a time of unprecedented economic uncertainty. Despite the greater challenges that family businesses have in adapting their businesses and in seeking finance, many have worked extremely hard since lockdown to avoid the painful process of letting people go.
“At Hitachi Capital we have been researching small business outlook for six years. What has become apparent since lockdown is there is no such thing as an average business in the UK. In the coming year we are committing more time to better understand the range and variance of views within the small business community, within specific groups and communities, so we can better help a wider range of enterprises to adapt and grow through the challenging, uncertain times ahead.”