The gift of time – SMEs to reward employees with 120m extra days off this Christmas
Over half a million1 UK small and medium-sized enterprises (SMEs) are spreading Christmas cheer among their workforces this year by giving the gift of time, according to the latest quarterly Barclays SME Barometer2.
One in ten (10%) of the nation’s 5.6 million SME businesses said they’ll be gifting each employee 2.5 extra days leave, on average, meaning that SME staff across the country will receive 120,345,602 days off cumulatively3. People working in hospitality and leisure (3.5 days additional holiday) and manufacturing (3 days) will get even more time off.
The Barclays research found that 41% of SME employers believe staff activities leading up to the festive season contribute to employee retention. Similarly, a third (33%) of consumers say they are less likely to look for another job if their employer organises activities to reward staff over the Christmas period. In fact, of employers who are seeing an increase in demand for benefits from new employees, more annual leave is one of the top three benefits being requested by existing employees, according to 28% of small businesses, behind higher wages (87%) and more flexible working (56%).
In addition to providing time off, two fifths (44%) of SMEs will be hosting end-of-year parties, spending an average of £56 per head on festivities, while 41% will be closing offices between Christmas and New Year and 25% will be awarding Christmas bonuses.
Q3 SME Revenues
Although data from Barclaycard Payments, which processes £1 in £3 of debit and credit card payments in the UK4, showed a slight decrease of 1.58% in the value of card payments to SMEs from July to September 2022, compared to the same period in 2021, more than half (55%) of SMEs reported their total revenue grew – with turnover up around 9.1% year-on-year, on average.
51% reported turnover growth in Q3 2022 against Q2 2022, consistent with data from Barclaycard Payments, which showed a minor increase of 0.27% in the value and 1.62% in the volume of payments made to SMEs between July and September this year.
Businesses expect growth to continue throughout the festive season, as over half of small businesses (51%) predict a year-on-year revenue increase in Q4, and 49% expect revenues to grow from Q3 to Q4 this year.
Macro-economic concerns
Festive cheer and optimism are, however, dampened by the cost-of-living crunch as nearly half (47%) are worried about their business prospects for 2023.
Furthermore, more than three in five (68%) of SMEs are concerned about the negative impact that rising energy bills will have on their business, with 26% feeling very concerned.
Larger businesses are feeling the pinch too, with nearly two-thirds (59%) predicting a decrease in consumer spending, and 41% worrying about their businesses prospects as they approach 2023.
Colin O’Flaherty, head of SME at Barclaycard Payments, said: “The upcoming festive period will be our first since the pandemic without restrictions, with both employers and employees looking to make the most of it.
“While it’s been yet another challenging year for businesses, many SMEs are looking to inject some festive cheer by rewarding their employees, as business owners are aware of the positive impact that employee morale can have on staff retention.
“Our research, however, shows that although owners are very aware of the difficulties to come, they remain resilient in the face of risings costs, and we hope this festive period allows them to celebrate their achievements and ring in the New Year with energy and a degree of optimism.”
Earlier this year, Barclays launched a package of support aimed at boosting small businesses, with the bank hosting 600 business masterclasses this year, focussing on managing cashflow, business growth and support for wellbeing. Find out more at labs.barclays/business-health-hub
