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Following research which shows the vital role small businesses play in supporting the community and those disadvantaged in the jobs market, the Federation of Small Businesses (FSB) is calling on the Government to help small businesses continue and extend their work.

Community involvement

The FSB’s report, ‘Small Business, Big Heart’, reveals that 80% of small firms are contributing to local charities or the wider community in some way, with 38% donating their time and 32% providing skills, wider resources, or mentoring to others.

Small employers are already more likely to hire those from harder to reach groups than big corporations. 78% employ an older worker, 34% have a member of staff with low levels of educational attainment, and 30% employ at least one person with a known disability or mental health condition.

The FSB is calling for the Government to recognise the fundamental role these caring small firms play, and support them with National Insurance Contributions (NICs) holidays, Statutory Sick Pay (SSP) refunds and greater support for work experience placements. They’re calling attention to the fact that the Government made a manifesto promise, as yet undelivered, of a one-year NIC holiday for firms that employ those from disadvantaged groups.

FSB national chairman Mike Cherry said that the contribution of small businesses to local communities is too often overlooked by policymakers.

“We’re not just generators of profits and tax: we’re an active force for good in society,” he said.

He also said that delivering the 2017 manifesto promise of a one-year NICs holiday for firms that take on those who have been out of work for some time, or with a disability or mental health condition, should be prioritised.

“We look forward to the Chancellor outlining exactly how the commitment will be taken forward in the upcoming Spring Statement.

“With the labour market tightening, EU migration down and skills shortages starting to bite, it’s more vital than ever that this incentive is made available.”

Helping the next generation

The report also highlights the considerable support provided by small businesses for young people. More than 42% of small employers actively engage with schools, colleges or youth organisations and 41% offer work experience, either as part of their recruitment process or part of community outreach efforts.

The FSB is urging the Government to consider introducing compulsory work experience in schools across England.

“We need to ensure that young people are work-ready when their education finishes,” said Mike Cherry.

“That means giving them exposure to the business world at an early age. It’s high-time for the Government to do more to enable work experience in small firms.”

The cost of supporting sick leave

‘Small Business, Big Heart’ shows that smaller firms are at the forefront of the Government’s Good Work agenda, with 89% offering flexible working and many recognising the benefits that come with doing so, including reduced staff absences and cost savings. However, sickness pay is costing them dearly, particularly long-term. 34% said sickness absence had cost them over £1,000 in the last 12 months.

The FSB wants to see the Government allow best-practice employers to recoup some of the costs they incur from long-term staff absences, drawing on the precedent set by the Percentage Threshold Scheme (PTS), which used to allow firms to reclaim a share of Statutory Sick Pay if their SSP expenditure exceeded a set percentage of their National Insurance bill.

Mike Cherry said that while small business owners are keen to support staff suffering from ill health, they need help to make that possible.

“If you’re a micro business and a member of your team is away for a long stretch, that can cause a lot of financial pressure,” he said.

“The return of a targeted PTS-type initiative would help address this challenge.”

What staff and community initiatives could you put in place with more financial support from the Government? Has long-term sick leave affected your finances?

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

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