Company owners desperate to keep their businesses going are taking huge hits for employees. In addition to the one in ten who have remortgaged their homes, 35% have admitted to taking significant pay cuts in the last five years to avoid laying off workers.
Of those who have reduced their earnings to avoid making redundancies, 60% say it’s something that’s lasted for more than a year and nearly one in five say it could go on indefinitely.
Of those who have taken cuts to their own wages, 70% have cut them by as much as a half while one in 20 have scrapped their salaries completely.
Across the country, the issue of holding onto staff when times are tight is most prevalent in the West Midlands affecting 41% of small businesses.
The same proportion of business owners in the West Midlands also said the trading environment “wasn’t good” and 43% said new business leads had all but dried up.
Figures from More Than’s Business Inflation Guide which tracks the prices for the 20 most important expenditure costs for small businesses showed that for the second consecutive quarter key costs rose very marginally at 0.31% during Q4 2011.
Janet Connor, managing director at More Than, said: “Business owners care about the bottom line and rightly so. It's sad that so many small business owners have had to remortgage their homes and take hefty pay cuts but at the same time it shows real compassion on their part that they're prepared to sacrifice personal gains for the sake of their staff.
"This research shows that the trading environment for small businesses remains tough but the latest set of results from the BIG suggest they might be able to look forward to the summer with greater optimism - the relatively low 0.31% increase in costs for Q4 2011 follows an even smaller 0.05% increase in Q3. Things won't change overnight but this is good news."
