Difficult times, drastic measures – SMEs have their say about bad management practices & cost-cutting initiatives

A recent survey of small to medium sized businesses by XLN Telecom – the UK’s leading telecoms company serving the small business community – reveals that the three worst qualities an employer can exhibit during difficult times to their staff are ‘hiding the extent of problems’, ‘making the problems appear worse than they are’ and ‘being distant with staff’ – indicating that SME employees want honesty and straight talk from their employers about the state of the business. 

The research from XLN also shows that the next worst traits an employer can display are ‘cancelling promised pay rises and bonuses’ and ‘driving around in a luxury car’.

These results come at a time when most SMEs have been introducing cost-cutting measures, the most common of these – according to XLN’s findings – being: slashing marketing spend, reducing staff and overtime, and changing utility providers.

The XLN survey of over 400 SMEs, however, reveals that opinions are sharply divided between employees and employers regarding the respective merits of some of these exercises – not least when it comes to reducing staff – 83% of employees stating cutting headcount is a bad move. By comparison, only half of employers (55%) viewed job-cutting in a negative light. 

Furthermore, the survey shows employers may be out of touch with their employees, not realising the negative impact certain “petty” cost cutting exercises may have when compared to more significant moves. For example, cuts on items such as “loo paper” and “free biscuits” generated greater disapproval ratings amongst respondents to the XLN survey than decisions made on reductions to “overtime pay” and “marketing spend”.  Conversely, items that employers are reticent to cut – such as the Friday evening/weekly drinks session – were viewed as items that the majority of employees surveyed would be happy to give up. 

Despite all the criticisms, it would nevertheless appear that UK SME bosses are getting things more right than wrong in the down-turn when it comes to dealing with their staff. Based on an analysis of the results of the XLN survey, there was seen to be broad agreement between the two camps on a range of key issues – most notably, the need for being honest about problems the business is experiencing, honouring promised pay rises, reducing overtime payments, and either cutting or training under-performers in a team. Surprisingly, there was also an equal agreement rating amongst staff and directors regarding the benefits of delaying company tax payments to ensure salary payments. 

Indeed, only 12% of employees surveyed felt the mood in the office was currently “depressing”, the overwhelming majority (66%) stating “It’s the same as always”. Furthermore, a significant 22% of respondents were actually “upbeat”.

Anthony Karibian, joint CEO and co-founder of XLN Telecom, commented: 

“Employees are the greatest – and often most under-used – asset a business has when it comes to finding ideas to tackle the challenges facing a business. By being open and inclusive with staff, a real winning spirit can be quickly engendered turning tough times into truly winning times.”


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