Financial services SMEs laid off fewer employees than the average firm during the pandemic, according to exclusive data for City A.M.
Figures from Barclayscard show that while just under a quarter of SMEs are optimistic for the third quarter, more than a third – 34 per cent – of financial firms remain positive.
This is in part because they have managed to avoid mass redundancies thus far, with just 21 per cent of firms letting staff go compared to the average 41 per cent. Additionally, 32 per cent are planning to invest in recruiting staff over the next 12 months, compared to just 24 per cent of firms overall.
Barclaycard’s quarterly barometer published today shows that a stronger-than-expected performance in the second quarter boosted optimism in SMEs generally.
On average, SMEs reported a 14 per cent decline in revenue last quarter, less severe than an anticipated 28 per cent drop. Financial services SMEs saw a five per cent fall but expects just a three per cent increase in the next quarter, slightly below the five per cent national average.
Sectors that rely on consumer card payments, such as hospitality and leisure, were badly hit as lockdown forced them to close en masse. They were not able to reopen safely until the start of the third quarter.
However SME transaction data shows signs of recovery with the average daily transaction value rising 60 per cent in the third quarter compared to the previous quarter. However, transactions for the first half of quarter three remain 13 per cent behind year-on-year.
There was some glimmer of hope amid the gloom, as SMEs reported remote working as a benefit during the pandemic. A third of SMEs welcomed the opportunity to improve working from home capabilities.
Financial services SMEs noted that the pandemic had created further efficiencies, in part because they were able to pivot to digital. Forty-one percent of financial services SMEs spoke about the pandemic forcing them to digitise versus an average 21 per cent.
Plans surrounding remote working remain a core part of this innovation, with almost a fifth – 19 per cent – of financial services firms planning to move to a permanent working from home model.
Nearly two-thirds – 65 per cent – will keep some form of flexible working practices in place as staff return to the office, reflecting the approach taken by bigger firms.