UK SME’s Prepare for a Revenue Loss of Approximately PS138,000 in 2025
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Nearly one quarter (24%) lacks optimism about the business outlook for 2025
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Half of employees fear that mandates to return to the office could affect employee retention
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As Labour’s Autumn Budget comes into effect, the Labour Party’s top priorities for 2025 are rising inflation, economic instabilities and tax policy.
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Despite economic stress, more than half of UK companies (55%) plan on expanding their workforce over the next year
According to a new report by Fiverr, the leading freelancer platform, UK businesses will face significant challenges after Labour’s Autumn Budget. The average loss is expected to be PS138,000 per business in 2025, and 25% of businesses expect losses exceeding PS100,000.
Despite the Bank of England reducing interest rates, Labour’s proposed PS40billion tax hike – half of which would directly affect businesses – has increased financial pressure on SMEs in preparation for 2025. Business leaders are most concerned about inflation and rising costs (50%) as well as the economic instability of the UK (45%) and the wider implications of Labour’s policies on taxation (37%).
UK business expects revenue challenges after Labour’s Budget
Over half of UK businesses (54%) attribute operational instability to the current political climate. A staggering 83% of UK businesses think that the proposed changes to Labour’s budget policies, and the increase in national minimum wage, will affect their revenue. Three-quarters of business leaders (76%) believe that Labour’s tax policy will negatively affect workers’ wages, and 60% are planning to reduce headcounts or freeze hiring over the next 12 months.
There is still some optimism despite these challenges. The data shows that 62% leaders believe Labour’s focus improving workers’ rights can positively impact employee’s mental health. This offers a glimmer hope in an otherwise turbulent future.
SME embraces RTO but fears employee retention
UK business leaders have shown a willingness to try new trends in the workplace. 50% are willing to test a four-day workweek, but 24% do not believe it will be successful under Labour. While 61% support a model that allows employees to return to the office three or more days a week, they cite improved productivity (61%), increased collaboration (40%) and professional development (38%) as its main benefits.
Leaders are aware of the negative effects that RTO policies can have. The half of leaders believe that mandating attendance at the office could negatively impact employee retention. 26% are concerned about workplace friction and morale. Nearly a quarter are also concerned about the impact on the work-life balance of employees and the possibility of increased operational costs.
Tech and AI roles will dominate hiring plans in 2025, with freelancers being key to filling skills gaps
Over half (55%) of UK businesses plan to increase their workforce by 2025 despite economic pressures. 33% will maintain the current level of staff. Nearly half of hiring priorities are centered on tech and IT roles. 24% target AI-specific jobs. Fiverr’s 2024 UK Future Workforce Index shows that businesses are willing pay more for AI skills. Over 80% of business leaders will offer an average of 45% higher wages to candidates with AI experience. Only 19% of companies plan to hire in the creative and design sector, which shows a lackluster demand.
Several factors influence hiring decisions. The most common reason for businesses to reduce recruitment is the advancement of AI (43%), followed closely by regulatory changes (34%), as well as budget constraints due to the cost-of-living crisis (33%).
Freelancers have become a critical part of the workforce. 55% already integrate freelancers in their teams, and 32% leverage their AI expertise. Half of UK business leaders believe that freelancers will be essential in achieving their goals by 2025, and 45% intend to increase their reliance upon freelancers over the next year.
Hila Harel is the Director of International Growth for Fiverr. She comments, “As UK business leaders navigate upcoming challenges, I find it encouraging to see them increasingly turn to freelancers in order to tackle economic instability and changing workplace trends. The four-day work week is on the rise, and policies to return to offices are also gaining traction. It’s evident that workplace flexibility has become a priority. We look forward to freelancers playing a larger role in business as 2025 approaches. Not only will they help businesses weather uncertainty, but they’ll also drive growth and innovation despite ongoing challenges.
The article UK SME Revenue Losses to Average PS138,000 in 2025 appeared first on Human Resources News.
