Mind the (Support) Gap: SMEs and the Mental Health Disconnect

Striking new research findings from the Enterprise Research Centre (ERC) at Warwick Business School show that while three quarters of UK firms acknowledge that they have responsibilities to address employee mental health, only half actually have any initiatives in place. What’s more, this ‘attitude to action’ gap is widest in the smallest firms, which are also the most likely to say they have no plans to adopt initiatives in the future.

Small firms are also significantly less likely than larger firms to report mental health-related absence, probably reflecting the fact that they are much less likely to measure and record reasons for absence than their larger counterparts.

Overall, this suggests a considerably lower level of focus on, and engagement with, mental health issues in SMEs. This is clearly something that could disadvantage SME employees. But ERC’s data also shows that around 45% of firms that report mental health absence say that it impacts on their business – and that this increases to 56% in the smallest firms. In the context of an inexorable rise in reported levels of mental health issues in the UK and beyond since the onset of the pandemic in early 2020, this is a situation that merits focus, to ensure that the individuals experiencing issues receive the help they need, but also to avoid detrimental business consequences.

ERC’s unique longitudinal data set, drawn from six years of employer surveys, shows that at the height of the pandemic, employer uptake of mental health initiatives grew substantially. But the most recent data points to a drop for the first time since 2021. And it is the strategic initiatives such as having a mental health budget or a mental health lead at board level that have seen the biggest reductions. Yet where firms do adopt initiatives, they overwhelmingly report positive outcomes, including improved mental health, improved job satisfaction and better business performance. So, it makes sense, both for firms and for their employees, to engage in this agenda. And there is arguably a strong case for mental health support to be offered to small firms as part of the upcoming small business strategy, which aims to encourage growth and enhance business performance.

What can we do to encourage the smallest firms to adopt mental health initiatives?

Firstly, we should recognise that small business leaders are often multitasking in several roles, and in difficult circumstances, with a strong focus on the survival of their businesses. Providing targeted support to help them easily identify workplace mental health issues may enable them to navigate the mental health challenges while also attending to the wider needs of their business. Simplicity and actionable information are the keys here.

Secondly, support that helps smaller business leaders to evaluate the available mental health initiatives and to identify the best for their circumstances would undoubtedly help to drive uptake.

And finally, offering smaller firms compelling relevant evidence for the positive effects of mental health initiatives in firms like theirs – maybe through case studies and mentoring programmes – may help to persuade them of the value of engaging more overtly with this agenda.

Maria Wishart, Post-Doctoral Research Fellow, Anglia Ruskin University 

Please note that the views expressed in this blog belong to the individual bloggers and do not represent the official view of the

Enterprise Research Centre, its Funders or Advisory Group