SMEs risk being left behind on the road to net zero

Just a third (33%) of the UK’s smallest businesses have made introducing sustainable benefits a top priority compared to 53% of all companies, according to research from employee benefits technology company Zest.

This is partly driven by increased demand from employees with over four in ten (44%) HR leaders claiming that the number of employees requesting sustainable benefits has increased in the last year. However, just 35% of HR leaders at businesses with 10-49 employees reported the same trend.

Over half (53%) of businesses say there has been a rise in the number of employees who care about sustainability over the last year and 52% say the number of sustainable benefits offered to employees has increased. Three in ten (29%) HR leaders believe that sustainable benefits are now a top priority for employees.

The research also highlights the growing awareness of the environmental impact of company pension schemes – 45% of businesses say that there has been an increase in employees who care about this impact. However, this was a noticeable trend for just three in ten (31%) of the UK’s smallest businesses.

The UK’s smallest businesses are at risk of being left behind by larger competitors when it comes to boosting sustainability credentials. Just 25% of businesses with 10-49 employees say that improving sustainability is a top priority for the organisation, compared to an average of 34% amongst all UK businesses.

Only a fifth (21%) of the UK’s smallest organisations say sustainable benefits play a key role in meeting overall green targets, whereas a third (32%) of all businesses acknowledged the importance these benefits play. Worryingly, a quarter (24%) of the smallest businesses say they believe sustainable employee benefits are a temporary trend, higher than the 18% UK average.

The research demonstrates the commercial advantages of prioritising sustainable benefits – 32% of businesses say these benefits increase morale, a third (32%) say these benefits helped to better attract and retain employees. A fifth (18%) of HR leaders admit their businesses has lost talent due to a lack of sustainable benefits.

With higher numbers of small businesses opting not to prioritise sustainable benefits, there is a risk that these businesses will be impacted competitively by potentially losing out on talent or reducing productivity.

Matt Russell, CEO of Zest, comments: “With employees more focused on sustainability than ever before, organisations need to ensure they are boosting their sustainability efforts including within the benefits on offer.

“Given the strong link with business performance, those who aren’t investing in sustainability risk losing ground to competitors and reducing profitability. It’s already a hugely challenging time for leaders to operate SMEs, the last thing they need is to lose key talent and see productivity decline by ignoring their sustainable impact.”

Zest is an employee benefits technology company with over 500 customers, including Hargreaves Lansdown, Taylor Wimpey, Yahoo and Travis Perkins, serving over 300,000 employees. Its multi award-winning platform offers a fresh approach to truly flexible employee benefits.

Employers can use Zest’s ROI Calculator to learn more about potential savings on employer NI contributions as well as approaches to reduce talent loss and boost productivity: https://www.zestbenefits.com/roi-calculator/