Coronavirus puts 1.7 million SME jobs in danger in UK
As many as 520,000 small and medium enterprises (SMEs) in the United Kingdom are in significant stress due to Covid19 pandemic, putting 1.7 million jobs under threat, says the latest Real Business Rescue – Red Flag Alert data analysis.
Data analysed by Real Business Rescue – Red Flag Alert show that coronavirus has plunged 16,000 more SMEs into distress in the last quarter alone – a 3% increase over the previous quarter.
The analysis further reveals that the number of start-up businesses (born after 2017) in significant distress had also soared in the last quarter due to coronavirus. There are now 92,000 of these new businesses in distress – an 18% (14,000) increase on the previous quarter when the total of businesses stood 78,000.
Of the 520,000 SMEs in distress, the analysis reveals the food and drug sector saw the biggest increase in troubled companies with a 6% leap from 12,951 in Q1 2020 to 13,741 in Q2 2020. Industrial transportation and logistics businesses were close behind with a 5% increase — from 11,909 in January-March quarter to 12,476 in April-June 2020 quarter.
However, when it comes to threat to jobs, the two sectors that pose maximum challenges are the health and education sectors and support services businesses. As many as 324,000 jobs are under threat at 81,000 support services businesses in distress and 271,000 jobs in 30,000 troubled health and education businesses.
The research also found that rescuing SMEs in the hotel and accommodation sector could be the most beneficial for jobs. For every one business in distress saved in this sector, the UK could protect 10 jobs. For at-risk SMEs in health and education this equates to nine jobs, printing and packaging eight jobs and manufacturing six jobs.
Shaun Barton, National Online Business Operations Director at Real Business Rescue said: “There are 1.7 million jobs at stake within these troubled companies and the pay-off from saving businesses one at a time is huge. For the directors of these businesses, they know that it’s not just their company at risk. It is the livelihoods of their workers.”
The research further found that the number of start-ups in significant distress in the travel and tourism industry increased by 21% from 372 in first quarter to 578 in the second with the same increase for the telecommunications and IT sector (from 3,101 to 4,519) and industrial transport and logistics sector (from 1,301 to 2,305).
