Small and medium-sized enterprises (SMEs) across the UK are demonstrating notable resilience by prioritising employee welfare and environmental sustainability, despite prevailing economic challenges, according to new research by Purbeck Insurance Services.
As inflation and the cost of living continue to exert pressure on both households and businesses, over half (51%) of SMEs have actively taken measures to support their staff. The survey, conducted by Purbeck, the UK’s sole provider of personal guarantee insurance, revealed that close to half of these businesses have either reassessed salaries or issued cost of living bonuses to aid employees in managing ongoing financial difficulties.
This commitment to employee welfare is even more significant given that only a third of Britons currently feel financially comfortable, as highlighted by recent data from YouGov. Nevertheless, amidst their own economic difficulties, UK SMEs are enhancing staff welfare frameworks, acknowledging the importance of maintaining devoted, motivated teams.
According to Todd Davison, Managing Director at Purbeck Insurance Services, “It’s encouraging to see many UK small businesses taking tangible steps toward decarbonisation while also prioritising their employees, even though they face their own fiscal obstacles. However, doing the right thing often involves a cost.”
In tandem with their focus on employee welfare, SMEs are also earnestly addressing environmental responsibilities. Prior to World Environment Day on 5 June, Purbeck’s research showed that nearly two-thirds (64%) of SMEs have already adopted measures to lower their carbon footprint.
Sustainability efforts are notably prevalent among businesses operated by younger leaders aged 25-34, with the West Midlands showing the strongest regional commitment. Conversely, businesses in the North East appear the least inclined to implement environmental policies.
Larger SMEs, those with 100-249 employees, are at the forefront of green initiatives, implementing measures such as reducing business waste (adopted by 45%) and initiating in-house recycling schemes. Additionally, one in three SMEs actively addressing environmental issues is promoting sustainable procurement practices within their supply chains, signalling an increasing operational focus on sustainability.
Despite the costs associated with environmental initiatives and employee support, Purbeck’s report indicates that sound business practices are leading to solid staff loyalty. Smaller firms enjoy the highest retention rates, with 40% of businesses with fewer than 10 employees rating their retention as ‘very good’, surpassing that of larger firms.
Davison added, “With suitable financial support, even the smallest enterprises can substantially contribute to net zero goals without adversely affecting their finances or employee well-being. It’s crucial to safeguard owners from risk when loans are necessary — personal guarantee insurance aids in mitigating borrowing risks, allowing SMEs to focus confidently on long-term objectives.”
The results underscore how UK SMEs, often regarded as the backbone of the economy, are not merely enduring but are actively propelling social and environmental progress from the grassroots. As the momentum towards net zero intensifies and employees continue to face economic pressures, this dual emphasis on sustainability and staff support could be pivotal in shaping a more resilient and conscientious economy.
Read more: [UK SMEs show resilience by supporting staff and embracing sustainability](https://bmmagazine.co.uk/news/uk-smes-show-resilience-by-supporting-staff-and-embracing-sustainability/)
