For all the SMEs (small and medium-sized enterprises) of the UK, 2020 and 2021 have been some of the most difficult years they’ve faced. It’s fair to say that nobody was prepared for the changes that the pandemic was going to bring about, and many businesses suffered because of it.
With statistics showing that almost 1 in 5 small businesses fear they wouldn’t survive another lockdown, it’s clear to see the impact that the pandemic has had on SMEs across the UK. From changes to trading, a decline in finances and increased redundancies, here are just some of the ways that small businesses have been affected by COVID-19.
Thanks to social distancing measures that were first introduced in 2020, businesses had to quickly rethink how they were going to be able to continue trading. Aside from the lucky few, the majority of businesses require some levels of social contact, which just wasn’t possible when lockdown first began.
As time went on, many businesses were able to adapt to lockdown rules- but since 67% were forced to stop trading at some point during the pandemic, a lot of irreversible damage was already done. In fact, an estimated 234,000 SMEs have already permanently ceased trading since the pandemic started.
The financial aspect of reduced trading is already huge, but when you add other factors to the mix, it becomes even more burdensome. Measures to contain COVID such as masks, hand sanitiser, and social distancing floor plans, are likely to increase the costs of running a business, which isn’t great news for SMEs who are already financially challenged.
Industries whose sales involve a lot of face-to-face contact have been hit the worst, with businesses in recreational services, accommodation and food and transport and storage reporting the largest expected declines in sales in 2020.
The Government’s job retention scheme has been one good thing to come out of the pandemic, with small businesses being able to hold onto their employees while the Government pays the majority of their wages. However, with the scheme due to come to an end in September of this year, SMEs will be beginning to put plans into action regarding their employees.
For businesses who have seen a huge financial impact since the pandemic began, redundancy is likely to be at the forefront of their minds. Alternative options to redundancy like temporary layoffs, reducing staff hours or switching an employee’s job role may not be feasible if the company’s finances have been too badly affected.
Many SMEs that have completely ceased trading will simply have no other option than to let their staff go. While redundancies are a difficult time for everyone, there are some things that can be done to ensure the process goes smoothly.
Many businesses decide to take on a reputable career transition provider like Randstad RiseSmart, who will help ease workforce changes as people move out of your employment. Their experienced team of career transition coaches will work with your employees to help best prepare them for getting a new job, and since you’ve shown that you care for your departing staff members, you’re more likely to maintain a positive relationship with them.