Mental health issues rising problem among SMEs in construction

Almost four in ten small and medium-sized businesses (37%) across all industry sectors are encountering mental health issues among staff due to unfair payment practices, according to a new YouGov poll.

The survey, commissioned by engineering services bodies BESA and ECA, identified mental health issues in SME staff due to late or unfair payments including: stress (29%), depression (14%), extreme anger (9%) and suicidal feelings (3%), directly resulting from late or unfair payment.

Other major findings included:
• More than two in ten (22%) SME owners have had to reduce their salary or stop taking a salary for a period of time, as a result of late or unfair payment.
• Those working for SME businesses in London reported the highest number of mental health issues among staff due to late or unfair payment (42%). Businesses in the North and East reported the smallest number of mental health issues (34% each).
• Compared to over 55s, under 35s were eight times more likely to say someone at their business had experienced suicidal feelings (8% vs 1%), and four times more likely to recognise self-harm among staff from unfair payment (4% vs 1%).

BESA Director of Legal and Commercial Debbie Petford stated:
“This poll confirms what previous industry-wide 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?”

ECA Director of Legal and Commercial Rob Driscoll commented:
“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.”

Overall, just over seven in ten SMEs (71%) across the entire economy are paid late. The worst affected sectors were legal (90%) and construction (82%).

The construction sector, which faces the additional burden of cash retentions that other sectors do not encounter, also fared poorly among mental health issues from unfair payment.

BESA and ECA are calling on the Government to give the Small Business Commissioner tougher powers to sanction late payers across every sector, as well as to legislating for a retentions deposit scheme to protect construction SMEs from systemic abuse of cash retentions and upstream insolvency.

 

About the survey

On behalf of BESA and ECA, YouGov surveyed 2,000 decision-makers among SME businesses, between 20 January – 3 February 2020. An SME is widely defined as a business with 249 or fewer employees.

The pan-industry survey covered the following sectors:

  • Manufacturing
  • Construction
  • Retail
  • Finance and Accounting
  • Hospitality and leisure
  • Legal
  • IT & telecoms
  • Media/ marketing/ advertising/ PR & sales
  • Medical & health services
  • Education
  • Transportation & distribution
  • Real estate

About unfair and late payment

As well as late payment, SMEs also face other unfair payment practices, including mid-contractual changes, withholding of a proportion of monies due (known as ‘cash retentions’) and fees for being paid within the correct timeframe.

About BESA and ECA – Working together to represent the engineering services sector

  • BESA and ECA collaborate on a range of issues in the engineering services sector. The partnership brings together the two leading associations representing engineering services; some 4,000 businesses with a combined annual turnover of almost £10bn.
  • Together, BESA and ECA cover a range of engineering, design, installation and facilities management activity, including electrical, heating, plumbing, energy management, micro-generation, ductwork, ventilation, fire and security, and wireless systems.
  • Joint work includes representation in key areas like contracts, procurement, payment and health & safety.

Overall, the engineering services sector accounts for some 40% of UK construction/maintenance turnover.

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