Need To Know: Your Business Updates for May 2022

  • 01 May 2022

Business news to help you ahead of May 2022

Welcome to the May 2022 'Need to Know' update. You'll find key information on absencee costs being faced on UK firms, concerns of market competition, new Scotland Covid-19 advice, delays to the start of EU import checks, and the financial benefits of hiring an ex-armed services person.

Business owners hit with higher sickness and absence costs

According to a new study from the office for National Statistics (ONS), the sickness absence rate in the UK in 2021 rose to 2.2%, from a record low of 1.8% in 2020. This is the highest recorded figure since 2010, when it was also 2.2%.

It is estimated that 149.3 million working days were lost through sickness or injury in the UK in 2021, equivalent to 4.6 days per worker.

 

The most common reason for sickness absence in 2021 was "other" conditions, including accidents, poisonings, diabetes and coronavirus (COVID-19).

COVID-19 accounted for nearly one in four of all occurrences of sickness absence in 2021.

The groups with the highest rates of sickness absence in 2021 included women, older workers, those with long-term health conditions, people working part-time and people working in caring, leisure and other service occupations.

Federation of Small Businesses (FSB) Policy and Advocacy Chair Tina McKenzie said: “The average cost of sickness absence, including finding cover, stands at more than £3,000 a year for small employers, equating to £5 billion across the small business community as a whole.

“With operating costs surging in the round, small firms need more financial assistance to go on doing right by their staff when they’re unwell.

“On the day that the Government has announced yet more help for big energy-intensive companies, we’re asking policymakers to take forward our joint proposal with the TUC for a small business sick pay rebate which will support those who have received no assistance whatsoever with utility bills.

 

“Allowing small community businesses to recover sick pay costs will give them that much more space to invest, recruit and retain staff, spurring our economic recovery from the grass roots up.”

To read more on this story click here.

Concern at lack of market competition

The UK Competition & Markets Authority (CMA) has published a new report detailing competitiveness in the UK and what that means for people and businesses.

The CMA has improved the techniques it uses to measure indicators of competition like market concentration, firms’ profitability and markups, and market entry and exit levels.

Key findings include:

  • The level to which markets are dominated by a limited number of companies - their concentration - remains higher than it was before the financial crisis of 2008.
  • Concentration is higher when ‘common ownership’, where competing firms are owned by the same companies, is factored in but lower when accounting for international trade.
  • Lower income households are more likely to consume goods and services produced in more concentrated markets. This is because a higher proportion of their income is spent on essential services, like gas and water, which tend to be produced by a limited number of companies.
  • Average markups - the amount added to the cost price of goods to cover overheads and profit - have increased since 2008, from just over 20% to about 35%, with the increase in markup being higher for the 10% most profitable firms.
  • Evidence suggests that the largest and most profitable firms are able to sustain their strong position for longer than they used to, with the likelihood of the largest firms in an industry remaining the largest firms increasing over the last 20 years.
  • Digital markets have huge potential to improve our lives and living standards and to play an important role in the post-pandemic recovery. But to deliver those benefits, they need to stay competitive. Weak competition in digital markets, like search engines, mobile ecosystems and social media, risks reducing innovation and choice, and leading to people giving up more personal data than they would like.

Mike Walker, Chief Economic Adviser at the CMA, said: “Our State of Competition report shows a worrying combination of trends. We are seeing markets getting more concentrated, companies enjoying higher mark-ups and the biggest firms maintaining their leading positions for longer. The fact that all these indicators are pointing in the same direction provides a warning sign about the state of competition in the UK.

“What’s more, we’ve found that the poorest households are likely to suffer the effects of these changes the most - at the very time when they are already being hit by sharp rises in the cost of essential items.”

 

To read the report click here.

Scotland announces new Covid-19 advice

From May 1, public health advice in Scotland has changed to ‘stay at home’ - replacing self-isolation for people who have symptoms or have tested positive for Covid-19.

Those with symptoms of Covid-19 and who have a fever or are too unwell to carry out normal activities are now told to ‘stay at home’ while unwell or if they have a fever.  They will no longer be advised to take a PCR test.

The changes will also see all contact tracing ending.

Testing for the general population was curtailed at the end of April, and test sites have now closed.  However, testing will remain available to certain groups in order to protect high risk settings, support clinical care and for surveillance purposes.

Those groups include health and social care workers, care home and hospital visitors, patients groups eligible for treatment, hospital patients, unpaid carers and people in prison.

Children and young people aged 18 and under with mild symptoms such as a runny nose, sore throat, or slight cough, who are otherwise well, do not need to stay at home and can continue to attend school, college, or University.

They should only stay at home if they are unwell and have a high temperature. They can go back to school, college or childcare, and resume normal activities when they no longer have a fever and they feel well enough to attend.

The Protect Scotland app will also be closed down shortly, but users are encouraged to keep the app on their phones in case it is needed again at a future date.

Patients should only attend A&E if their condition is an emergency, to continue to limit the pressure on services.  Patients can contact their GP during the day, local pharmacy or call NHS24 on 111 as an alternative.

FSB welcomes new HRT Tsar appointment

Madelaine McTernan has been named as new hormone replacement therapy (HRT) tsar, in a move welcomed by FSB.

Tina McKenzie, FSB Chair, Policy and Advocacy, said: “It is welcome to see this appointment to address the supply issues for HRT products. Hopefully, this will mark a moment to reflect on the importance of the menopause in public policy.

“There is a lack of awareness across society about the menopause. Especially given that women over 50 are the fastest growing section of the workforce, it is really important that individuals get the support they need.

“We recommended in our recent Business Without Barriers report that the Government should review NICE Guidelines, including on the menopause and other conditions that impact participation in work, such as anxiety, to ensure they include appropriate advice about work and employment. So, we would welcome a strategy that considered these issues.”

To read the FSB Business Without Barriers Report, click here.

More time given to firms to prepare for changes to EU imports

The Government has delayed introducing checks on EU goods entering the UK over concerns it will disrupt supply chains and add to rising inflation.

The Government said: "It would be wrong to impose new administrative burdens and risk disruption at ports at a time of higher costs due to the war in Ukraine and rising energy prices.”

 

Responding to the announcement, Federation of Small Businesses (FSB) National Chair Martin McTague said: “Imposition of full import controls this summer would have meant yet another burden for small firms which are already wrestling with new trade rules and spiralling operating costs.

“This move will give them more time to prepare for future changes and reassess supply chains.

“Over the long-term, the Government should do its utmost to minimise trade friction with regions all over the globe - increasing the threshold at which import tariffs kick in, and putting small business chapters at the heart of all new free trade agreements.”

You can read more about the decision here.

UK firms urged to hire former armed service personnel

Businesses hiring former members of the UK armed forces in their first year of civilian employment can save thousands through National Insurance relief.

Employers will not have to pay National Insurance contributions for veterans in their first year of civilian employment after leaving the armed forces. Businesses will also be able to claim this relief retrospectively for any qualifying employees who joined their company in the last 12 months.

Businesses could save £2,567 per employee on the average salary in the UK. A business hiring 10 qualifying veterans could save over £25,000.

To find out more, click here.

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