A growing share of UK small and medium-sized enterprises (SMEs) are operating at breaking point, according to Employment Hero’s Work That Works report. Based on insights from 1,000 business leaders and 1,200 employees across the UK, the study finds that one in five businesses nationwide say they are in or near survival mode, while 39% of owners with fewer than 50 employees describe their companies as “merely surviving, not thriving.”
Regional pressure points
- Midlands: 38% report being in or near survival mode.
- North: 34% say they’re on the brink.
- London: 29% of firms report significant strain.
Skills and tech gaps hit smaller firms hardest
Smaller SMEs report weaker in-house capabilities and are holding back on tech spend:
- Only 43% of leaders at small SMEs are satisfied with their organisation’s technical knowledge, versus 51% at mid-sized firms (50–249 employees) and 64% at larger firms (250+).
- Small SMEs are 50% less likely than mid-sized peers to prioritise technology investment over the next 12 months, and 1 in 10 are investing less than before—moves that may save cash now but risk bigger operational problems later.
What employers say
Kevin Fitzgerald, Managing Director at Employment Hero, said:
“Our research shows just how many small businesses are operating at breaking point. The solution isn’t asking them to work harder, it’s removing the barriers that stop them working smarter. That means cutting the admin burden, closing the tech gap, and giving teams the clarity and tools they need to focus on what really drives value.”
Read the full report: https://employmenthero.com/uk/resources/business-productivity-report/
