Covid-19 forces one-in-three small businesses to close says new report

Nationally, a total of 35% of all SMEs said they had been forced to shut down during the Covid-19 crisis according to the first ‘Small Business Monitor’ from WorkLife, a new employee benefits service from online money manager OpenMoney.

While 18% said they were planning to reopen, 17% admitted they were unsure when they would be able to get back to work. The figure was fairly consistent across most industry sectors, but as expected the retail and hospitality sectors were worst hit, with 24% saying they didn’t know when they would be up and running again. Almost three quarters (73%) of firms saw their income reduce during the pandemic, with 46% reporting that it had fallen by up to 50%. 62% of SMEs expect their income to remain subdued over the next 12 months, with 42% saying it will be reduced by up to 50%. 5% don’t expect to recover any income at all over the coming year. Rob Marshall, managing director of WorkLife, believes that companies and employees need help to get back on their feet. He said: “As our research shows, the current situation is bad news for bosses and terrible news for their employees. But with WorkLife, there is a real opportunity for employers to provide their workers with the help they need during what is clearly going to be a difficult period of recovery and return to work. And it won’t cost companies a penny for the rest of 2020 [the normal cost is £2 per employee per month].” The WorkLife platform links up with payroll information and workplace pensions, so employees can see all their benefits and salary in one place. Employers can even add their own benefits and rewards. The company’s Small Business Monitor is based on research carried out by 3Gem among 750 senior financial and HR decision makers in UK SME companies with 5 - 250 employees. Fieldwork took place 7 to 26 June 2020. The full report will be published next month.