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iStock 524718551
iStock 524718551

Smaller firms facing a ‘low workforce morale epidemic’

Almost all (99%) small businesses in the UK believe Covid-19 restrictions have impacted the mental health of their employees and subsequently led to an increase in workplace issues, finds new research.

According to the poll of 250 UK SMEs, conducted by the employment team at law firm Moore Barlow, four in 10 businesses have noticed an increase in performance issues, a similar proportion (38%) have experienced a rise in disputes between colleagues, and a third (33%) have reported growing levels of absence.

One in three (36%) SMEs also reported a reluctance from employees to return to the office with work from home guidance having ended and close to a quarter (23%) said that attracting or retaining talent is the biggest challenge facing their business.

Katherine Maxwell, partner and head of employment law at Moore Barlow, said: “There is a workforce morale epidemic sweeping through the UK’s SME community. The impact of Covid-19 on a small team is felt that much more keenly than it is in a larger firm with a bigger workforce. SMEs are also less able to weather economic instability, adding to stress levels for employees who may be concerned about their livelihoods.”

Firms see reviving the office dynamic as key to addressing their workforce woes, with the vast majority (92%) planning a return in some form once the current government guidance is relaxed. Most (84%) are planning a hybrid working model where employees work either two or three days a week from home.

Two thirds (65%) also said they were beefing up their perks and benefits offering to improve recruitment and retention, with wellbeing programmes (14%), volunteering allowances (14%) and unlimited leave (13%) the most commonly cited new initiatives.

Katherine added: “The ‘Covid-19 effect’ is creating a more tense workplace where frayed tempers, low productivity and heightened anxiety are commonplace. Firms are looking in the right places for solutions – improving their offering to employees and introducing better wellbeing support – but they should think about their processes and procedures too. For example, introducing internal mediation techniques to help handle disputes amicably before they escalate can really help, while implementing thorough performance management programmes are vital for getting struggling employees back on track.”

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The research follows data from NHS Digital in January that showed that the number of ‘fit notes’ issued by doctors in the UK had increased by 5% since the start of the first lockdown in 2020.

About Moore Barlow:

Moore Barlow is one of the UK’s leading law firms, focused primarily on meeting the needs of private individuals & families, owners and leaders of fast-moving organisations and businesses, and people whose lives have been affected by serious accidents or negligence.

With 70 partners, 272 lawyers and legal professionals, and a total staff of nearly 500, Moore Barlow has offices in Southampton, Guildford, Woking and Lymington, as well as two locations in London (Richmond and the City).

The firm is a member of IR Global – a multi-disciplinary professional services network that provides legal, accountancy, financial advice to companies and individuals around the world – and is the sole UK legal advisor within Ecovis, an international network of more than 7,500 lawyers, accountants and consultants with capability around the globe.

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