Running a small business certainly isn’t easy — and the pressure only increases when it comes to managing employees. But they play a really critical part in enabling the UK economy.
Did you know that in 2021, small and medium-sized businesses in the UK had a combined turnover of £2.3 trillion and employed 16.3 million people in the UK, which accounts for over 60% of all private-sector employment?
That’s huge! And between rostering, payroll, recruitment, onboarding and the myriad of other ‘hats’ a small business owner wears, it can be incredibly stressful.
In fact, research we recently conducted in partnership with Lonergan Research revealed almost half (49%) of UK small business owners surveyed said managing employee processes and compliance was taxing on their mental health.
We believe we can play a really critical role in using the power of technology to support employers, and in doing so, play a role in stabilising the economy and contributing to GDP.
That’s why today at Xerocon London, we launched our Changing World of Work report, which examines the attitudes and behaviours of small business employers and their employees in the UK in the midst of one of the biggest workplace disruptions we’ve experienced in recent history.
I was also delighted to also showcase our suite of employee management tools in Xero, to help small business employers navigate these challenges.
The changing world of work
To produce this comprehensive report, we surveyed 344 small business employers in the UK to gain an understanding of the issues that most impact them. Our report found:
- Almost half (49%) believe managing employee processes and compliance is taxing their mental health
- 56% said that managing employees in an ever-changing regulatory environment is stressful and confusing
- One third (33%) worry their staff will be paid incorrectly due to confusing payroll legislation.
- 58% said technology that helps to forecast payroll costs would make them less stressed about their business
- One- third (33%) say workforce shortages and retaining staff are one of their top three challenges over the next 12 months
We also surveyed 551 UK small business employees, and found that employees are reassessing their values:
- Work-life balance (56%) and personal health and well-being (54%) were noted as top work concerns for the next 12 months
- 23% said they are planning to change jobs within 12 months
- 77% ranked pay and bonuses as one of their top three most important factors when considering a new role. Flexibility of hours was the next most important factor
The role of technology in employee retention
The report also revealed that outdated technology is playing a big role in the issues UK small businesses face. It’s also the top cause (21%) of employee frustration when it comes to admin tasks.
While many businesses embraced a quick shift to digital processes during COVID-19, our research found that one third of small business employers still use spreadsheets for forecasting staff costs and cash flow (36%), managing employee attendance (32%), processing payroll (30%), and managing employee-initiated expenses (33%).
One fifth use pen and paper for managing tasks like employee leave, time and attendance (21%), and roster creation and management (23%).
Other findings include:
- Nearly half of small business employers using cloud software found it helped with eliminating manual paperwork (45%) and making processes more efficient (45%)
- More than half (58%) of small business owners in the UK agree that technology to help forecast payroll costs would make them less stressed about their business
- 68% believe that allowing staff to complete people-related tasks would free them up to focus more on running their business
Our suite of employee management tools in Xero
The Changing world of work report has reinforced how critical it is that small businesses adopt technology to help ease stress and frustration, both for themselves and their employees. This has reinforced the importance of our purpose — to make life better for people in small business — and the value of tools that help them manage their workforce.
At Xerocon London, we showcased our suite of employee management tools that help small businesses manage their workforces more effectively and efficiently. These include Xero Payroll, XeroMe, Xero Expenses, and Planday — the workforce management solution Xero acquired last year that automates roster creation.
The research has shown us just how important these tools are for business owners and their employees, and what a vital role you play in helping them create an empowering and positive experience for employees, to help them win the war for talent.
Download the full Changing world of work report now and make the most of the insights available — it’s packed full of small business employer and employee insights from the UK.