03 March 2020 | Bradford Keen
Staff at 37 per cent at small and medium-sized firms operating in all industry sectors are suffering from mental health issues because of late and unfair payment practices.
The latter include mid-contractual changes, withholding of a proportion of monies due (known as 'cash retentions') and fees for being paid within the correct time frame.
The survey of 2,000 decision-makers at SMEs, commissioned by engineering services bodies BESA and ECA, identified the main issues as:
- Stress - 29 per cent;
- Depression - 14 per cent;
- Extreme anger - 9 per cent; and
- Suicidal feelings - 3 per cent).
The survey found that 22 per cent of SME owners have reduced their salaries or not paid themselves owing to late or unfair payment.
London was the worst affected region, with 42 per cent of SMEs reporting that staff have suffered from mental health issues owing to late or unfair payment. Businesses in the North and East were the least affected, at 34 per cent each.
Legal (90 per cent) and construction (82 per cent) were the sectors most affected.
Debbie Petford, director of legal and commercial at BESA, stated: "This poll confirms what previous industrywide surveys have shown - a dual crisis of mental health problems and unsustainable business practices. With this growing evidence of the huge social and economic damage caused by systemic unfair payment practices, the question should no longer be what is the cost of reforming the status quo, but how can we afford not to?"
Rob Driscoll, director of legal and commercial at ECA, said: "These shocking new findings show how late and unfair payment is causing a wave of mental health issues right across the economy and society. With mental health now rightly in the spotlight, it's beyond the pale that large businesses continue to impose such issues on SMEs across industry."
BESA and ECA want the government to give the Small Business Commissioner powers to sanction late payers and to create a retentions deposit scheme to protect construction SMEs.