Pandemic and Late Payment affecting mental health of small business owners
Impact of Late Payment on Mental Health
New Federation of Small Business (FSB) research has illustrated Covid's negative impact on the mental health of close to two million entrepreneurs.
In a survey by the Federation of Small Businesses involving 1,000 business owners, 34% of small business owners stated that their mental health had suffered over the duration of the pandemic.
Latest Government figures show that there are 5.5 million small businesses across the UK, indicating that approximately 1,800,000 have suffered a mental wellbeing hit due to COVID.
One in four (24%) report that they currently have a mental health condition such as anxiety, depression or post-traumatic stress. This rises when concerning disabled entrepreneurs where the figure rises to four in ten (43%). One in seven (16%) of small business owners report having a mild mental health condition, with 6% and 2% respectively stating that they have a moderate or severe condition.
The new research flags the extent to which small business owners are struggling to make use of the workplace health support offered by government. Only one in ten (13%) disabled business owners or business owners with a health condition have used the Access to Work Scheme, aimed at providing targeted workplace help for both business owners and employees. More than a third (35%) have not heard of the scheme at all. A quarter (25%) are not aware that sole traders are eligible to access it.
With loneliness the theme of this year’s Mental Health Awareness Week, the new study also highlights the ongoing impact of the UK’s poor payment culture on mental wellbeing. Six in ten (62%) of small business owners state that they were subject to late or non-payment after COVID hit, with a quarter (26%) stating that dealing with poor payment impacted their mental wellbeing during the pandemic.
The cost to the average small employer of having staff away from work due to physical or mental health conditions surpassed £3,500 last year, translating to a £5bn cost to the small business community as a whole.
In light of the findings, FSB is encouraging the Government to:
- Improve Access To Work take-up by ensuring health professionals point patients towards the scheme when writing fit notes.
- Launch a new, ambitious alternative to the New Enterprise Allowance to help those with mental health conditions who are out of work to create start-ups.
- Make Audit Committees directly responsibility for supply chain practice, elevating the importance of prompt payment within corporate environmental, social and governance (ESG) programmes, and place ending the UK’s late payment culture at the heart of BEIS’s forthcoming enterprise strategy.
- Develop “Pathways to Entrepreneurship” strategies aimed at dismantling the unique barriers faced by different entrepreneurs, including those with mental health conditions.
- Take forward FSB and TUC’s joint proposal for a small business statutory sick pay rebate, to help firms recover the cost of the millions of days lost to sickness absence each year.
