Alarming number of SMEs operating at breaking point
A growing number of UK businesses are on the brink, with a new report examining workplace productivity in small and medium enterprises (SMEs) revealing that one in five businesses nationwide say they are operating in or near survival mode.
Employment Hero’s Work That Works report – a study into SME workplace productivity with insights from 1,000 business leaders and 1,200 employees across the UK – captures the voices of business owners and founders across the UK and uncovers a troubling snapshot of resilience in decline. An alarming 39% of business owners who employ under 50 people describe their companies as merely surviving, not thriving.
From London to the Midlands, SMEs are feeling the squeeze
Struggles vary by region, but the sentiment is clear – economic uncertainty, rising costs, and operational pressures are taking a toll on entrepreneurs and SMEs alike.
38% of businesses in the Midlands say they are in or near survival mode, while more than a third of Northern businesses are also on the brink (34%). Even businesses in the capital are reporting significant strain, with 29% of London firms in survival mode.
Small businesses, big pressure
The picture is especially bleak for small SMEs. Just 43% of their leaders are satisfied with the technical knowledge in their business, compared to 51% in mid-sized firms (50–249 employees) and 64% in larger ones (250+). Many are also delaying investment in technology.
While this may save short-term costs, it risks bigger problems down the line. Small SMEs are 50% less likely to prioritise tech investment in the next 12 months than their mid-sized counterparts, and one in 10 say they’re investing less than they have in the past.
Kevin Fitzgerald, Managing Director at Employment Hero, said: “Our research shows just how many small businesses are operating at breaking point. The solution isn’t asking them to work harder, it’s removing the barriers that stop them working smarter. That means cutting the admin burden, closing the tech gap, and giving teams the clarity and tools they need to focus on what really drives value.”
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