The Sage Business Heartbeat Survey is based on responses from 2,554 UK business decision makers from the Sage customer database of over 600,000. The survey sample is weighted to reflect the UK’s 1.6 million VAT-registered businesses according to DTI figures. 72 per cent of all respondents were the owner, CEO, managing director, chairman, founder or general manager.
The Sage Business Heartbeat Survey is a regular study representing the views of UK business owners and heads of business. If you would be interested in submitting subjects for the Heartbeat Survey to investigate, please contact us via www.sagepresscentre.co.uk/heartbeat/.
RED TAPE CRUSHING ENTREPRENEURIAL DRIVE
Number of bosses who say ‘Never Again’ double
A staggering 41 per cent of company bosses say they would be unlikely to set up in business if the opportunity arose again. The figure, part of the 2005 Sage Heartbeat Survey, is up from 27 per cent in 2004. The survey is an ongoing study into the ups and downs of business life in the UK, conducted by YouGov among more than 2,500 business decision makers, on behalf of Sage UK. Perhaps more worrying is that 49 per cent of women (compared to 36 per cent of men) say they would not start a new business if the opportunity rose again.
The results call into question the reality of the so-called enterprise culture supposedly gripping the UK. They also emphasise the increasing impact on business of red tape, cited as one of the biggest reasons for entrepreneurs turning their backs on future business opportunities.
Employment legislation is a key area of concern:
- 69 per cent of respondents agree that the burden of proof has swung too far in favour of the employee
- 61 per cent that the continued extension of family-friendly policies is bad for business
- 71 per cent (76 per cent of men and 62 per cent of women) would support UK opt-out from future enterprise culture weakening EU legislation.
Although business is aware of the importance of fair play and equitable rights, the corresponding increase in form filling and resulting complex legal wrangles is having a disproportionate impact on small companies. In fact, 19 per cent – a fifth of all businesses – have considered giving up because of red tape surrounding employment legislation. The growing mountain of red tape has actually stopped 32 per cent of businesses from taking on new employees. One way or another, the overall cost of red tape is starting to bite.
The cumulative cost to firms of regulations introduced since 1998 is now £39bn, according to the British Chambers of Commerce’s “Burdens Barometer”, published recently. David Frost, Director-General of the BCC, says:
“British business cannot compete with a £39bn millstone around its neck”.
According to the Sage research, UK bosses have particular problems in dealing with issues surrounding poor staff performance, long-term or unauthorised absence and redundancy. Getting it wrong can prove costly. Last year saw 115,042 employment tribunal claims brought against employers, representing a 61 per cent rise over the past decade, according to figures from the CBI. The average unfair dismissal award (2003/4 figures) was £7,275; sex discrimination £12,971; disability discrimination £16,214 and race discrimination £26,660.
After issues highlighted in last year’s Sage Heartbeat Survey, Sage HR Advice, a service providing customers with a detailed human resource and employment law website and access to qualified professionals, was introduced. Sage has now expanded its business advice service with the launch of Sage Health and Safety Advice. The legally reliable services translate employment and health and safety law into plain English and promote best practice. In addition to a comprehensive website giving advice and document templates, the guidance includes email alerts, monthly newsletters, FAQs, telephone and email support to ensure that companies remain compliant. As part of its commitment to the health of UK business and to coincide with the release of the 2005 Sage Heartbeat survey, Sage has set up an HR Advice information line on 0845 2450268. Further information is also available at www.sagepresscentre.co.uk/heartbeat/.
According to Jo Ray, Managing Director, Small Business Division, Sage (UK) Ltd,
“Sage has been working with SMEs for 24 years and through our customer base of over 600,000 small businesses we understand the issues they face. Everything we do is aimed at helping business owners save time and money so they can focus on what they set out to do. While these findings are concerning, they show more than ever that businesses need help in dealing with the multitude of issues that they face in the UK.”
“Human resources, whether it be recruitment, employee motivation or compliance is vital to any business. However, many small business owners do not have access to reliable, practical advice. Sage’s HR and Health and Safety Advice services provide exactly that – they will help protect and grow your business, pre-empt issues before they occur and save time and money. The services are further evidence of Sage’s commitment to providing SMEs not only with the best business management software but also with outstanding customer support and advisory services.”
“The worry for many small companies,” says Duncan Cheatle, founder of entrepreneurial networking group The Supper Club, “is that as soon as they start looking into the issue of compliance with legislation, they are opening a can of worms. Business owners fear that what they will find will take time to implement and prove costly to their business. Any service that can provide affordable, practical advice is welcomed, especially from a company like Sage, which is widely trusted by SMEs.”
Top ten red tape burdens*
- Working time regulations: £11.1bn (cumulative cost for 1999-2004)
- Data protection rules: £4.6bn (cumulative cost for 1998-2004)
- Vehicle excise duty (reduced pollution) regulations: £4.3bn (cumulative cost since 2001; the recurring annual cost for firms is £1.2bn)
- Control of asbestos at work: £1.4bn since December 2002
- Disability discrimination rules: £1bn (cumulative cost since 1999)
- Employment Act 2002: £565m
- IR35 tax rule: £465m (cumulative cost since 2000)
- The Tax Credits Act 1999: £465m
- Stakeholder pensions: £404m
- Flexible working regulations, 2002: £400m
* Sourced from www.economicsuk.com