SME overtime troopers "boosting economy by £22bn"
Extra hours worked by owners of small firms provide economy with equivalent of 1% of GDP – but worries remain over long-hours cultures
Bosses at small and medium-sized enterprises (SMEs) add £22bn to the UK economy by working overtime, according to a new report from digital lender Everline and the Centre for Economic and Business Research (CEBR). Using new data from Everline’s Small Business Tracker, the report found that on average, almost 80% of SME managers admitted to working overtime in the past month, while 18% reported working more than 60 hours or more per week on a regular basis.
Harvesting the views of more than 1,000 decision makers in small businesses, the survey also found that of those who usually work conventional weekday hours, more than half (52%) have plans to continue working on at least one bank holiday over the coming 12 months – pumping an extra £1.7bn into the UK economy. Indeed, more than a tenth of bosses say they are likely to be working on Boxing Day and New Year’s Day (12% and 13% respectively).
But despite that evidence of impressive staying power, Everline managing director Russell Gould says that working overtime threatens to distract or fatigue bosses, preventing them from paying enough attention to the important task of planning their firms’ futures.
“Skills remain an issue for small businesses,” Gould said, “and evidently working ‘nine to five’ is a misnomer for employers who are working longer days in order to compensate for those gaps. The worry is that, in a digital world where speed and time are paramount, small business owners are spending too much time covering other people’s work when they could be focusing on growing their business.”
According to the survey, much of the overtime that owners take over bank holidays is carried out to prevent them from falling behind on their work – a problem reported by 51% of respondents. Older bosses are the biggest offenders when it comes to roaming beyond their standard working weeks, adding an extra 13 hours compared to their younger counterparts’ nine. As such, older owners are more likely to assume responsibility for a wider range of functions – eg, marketing, administration and finance.
CEBR economist Sam Alderson argues that a lack of suitably skilled workers available to many businesses has encouraged many managers to take a hands-on approach. “The strong pick-up in business activity illustrated by the Small Business Tracker is evidently stretching the capacity of small businesses,” he said. “A shortage of skills is constraining the ability of businesses to expand their resources and as such decision-makers are being forced to take on responsibility for greater range of functions.”
He added: “While small business owners should be applauded for their dedication and hard work, it’s a shame that these qualities are being devoted to tasks such as administration rather than strategy and business development: areas that could translate into sustainable growth for the small business sector.”
While SME overtime may add more pennies to the nation’s coffers, it is clearly putting managers under increasing pressure – with the risk that everything from their family lives to their sleeping patterns could be affected. In a recent Insights interview, business psychologist Professor Cary Cooper criticised the long-hours culture at large in UK companies and explained that it is vital for health and wellbeing and health that staff have manageable workloads.
“People get ill if they are dissatisfied with their jobs,” he said. “Most ways of providing people with job satisfaction are within the power of a line manager – enabling people to have autonomy over their job, giving clarity over job roles, ensuring staff have manageable workloads and not allowing a long hours culture to develop.”
However, SME chiefs are clearly in a bind if they are taking on too many tasks – because the buck stops with them.
Owners who are keen to refocus on growth would benefit from signing up to this forthcoming CMI seminar, SMEs: Taking Your Business Forward.