Preliminary information on the SME barometer: Majority of businesses satisfied with COVID-19 support but call for more flexibility
According to the preliminary information on the SME barometer, a quarter of businesses say that the COVID-19 crisis has improved the situation of their company, whereas another quarter believe that they will not bounce back. More than 75 per cent of small and medium-sized enterprises (SMEs) reported that COVID-19 support met their needs well or somewhat well. However, businesses call for more flexibility to recover.
The Federation of Finnish Enterprises, Finnvera and the Ministry of Economic Affairs and Employment monitor businesses’ economic prospects with the biannual SME barometer. Because the COVID-19 crisis has made this year quite exceptional for businesses, questions on experiences during the crisis and on the reforms introduced to help businesses were added. The material related to these questions is published in advance, separate from the SME barometer. Representatives of 4,700 SMEs responded to the survey.
“Preliminary information on the SME barometer indicates that the COVID-19 situation has affected businesses in very different ways. Some have been able to reinvent themselves due to the crisis, but for others, activities had stalled. This shows how hard it is to make political decisions. However, the Government reacted quickly, and a majority of businesses feel like they have benefited from the COVID-19 support measures,” says Mika Lintilä, Minister of Economic Affairs.
Quicker lay offs helped businesses save jobs
During the first wave of the coronavirus, activities had come to a halt in almost a quarter of SMEs.
Of the respondents, 27 per cent reported that shortening the period of notice before lay-off was helpful, making it the most important measure for SMEs to safeguard their activities and jobs. Other measures such as changes to tax prepayments (18%) and termination of employment contracts on production-related and financial grounds (16%) were also considered vital for survival.
“During the first wave of the coronavirus, in addition to business subsidies and loans, the Government introduced more flexible arrangements for businesses, such as shorter notice periods before lay-offs, and tax reliefs. It is good news that businesses have been satisfied with these diverse measures,” says Minister Lintilä.
More than half needed support – only few applied for loan
The most popular types of crisis support include development support provided by Business Finland and ELY Centres as well as support for sole entrepreneurs and temporary unemployment security for entrepreneurs. As many as 42 per cent of SMEs have struggled through the spring without resorting to any financial support.
The diversity of support measures and the changes to the system have been challenging to many SMEs. Regardless, more than 75 percent feel like the support met their needs well or somewhat well.
“The fact that only few SMEs have applied for a loan speaks for an uncertain future outlook,” says Petri Malinen, Economist at the Federation of Finnish Enterprises.
Flexible working time arrangements and fixed-term pay subsidies an effective quick fix
Expanding flexible arrangements for working times would make the biggest difference in helping businesses move on from the COVID-19 crisis. It was chosen by 29 per cent of the respondents. In addition, fixed-term pay subsidies available to laid-off employees returning to work and other forms of direct support (22%) and a permanent reduction in the period of notice before lay-off (19%) would help businesses recover.
“The COVID-19 crisis will change the world – and the operating environment of businesses – permanently, at least to some degree. Expanding local collective bargaining would be the most significant measure to strengthen the operating conditions of SMEs in this changed environment,” says Mika Kuismanen, Chief Economist at the Federation of Finnish Enterprises.
In addition, businesses recognise a need to reform the business subsidy system. According to the respondents, greater flexibility in labour legislation and working hours would also improve their operating conditions.
Petri Peltonen, Under-Secretary of State, Ministry of Economic Affairs and Employment, tel. +358 295 063 662
Katri Lehtonen, Development Director, Ministry of Economic Affairs and Employment, tel. +358 295 064 926
Mika Kuismanen, Chief Economist, Federation of Finnish Enterprises, tel. +358 503 560 705, [email protected]
Petri Malinen, Economist, Federation of Finnish Enterprises, tel. +358 504 345 952, [email protected]