SME COVID-19 challenges and opportunities for the workplace

Socio-Technical Centre

Hannah Collis is a Researcher in Occupational and Organisational Psychology at Leeds University Business School and a Member of the British Psychological Society. Her research explores individual differences and wellbeing at work, specifically looking at how the workplace interacts with and influences personality and wellbeing over time, and what this means for work behaviours and performance.

Women sat in informal meeting in modern office

The COVID-19 pandemic has resulted in changes to how we work and how organisations function, impacting across a huge range of job roles, levels, and industries. Organisations of every size have been impacted, yet you would be forgiven for thinking that larger organisations have it the hardest when it comes to managing the strategic planning and return of their workforce, especially given the media attention that these organisations have been given over the course of the pandemic.  

While we can learn from the actions of large firms, they are not typical of most of the UK’s companies. Small or Medium sized Enterprises (SMEs) make up 99.9% of the organisations within the UK, employing 60% of the population, however, much less attention has been paid to the challenges that they face during the pandemic and, in particular, returning their staff to offices.  

Cash Flow 

Unlike many of the larger organisations, SMEs are much more dependent on consistent cash flow and stable funding chains. An issue faced by many SMEs was not just this instability however, but the impact of late payments from other organisations facing problems due to the pandemic, which subsequently limited the investment into the organisation, people or future projects. For many businesses, this led them to question the long-term security of the business, particularly when they worked closely with other SMEs going through the same problems. While government loans were introduced to support SMEs here, the broader impact of restricted cash flow on themselves, and partner SMEs, has had a significant impact on future work pipelines and overall business longevity.  

When considering the role of the workplace, a tighter cash flow would have impacted how much SMEs could invest in it. For example, in order to have employees working within the office during the pandemic, it required adaptations to the office to make it COVID-secure, such as introducing sanitiser stations, space markings and screens in customer-facing points, which all required funds not immediately accessible by SMEs, further impacting workflow and productivity. Now, when we look to the return to the workplace, SMEs may further suffer in that they may not be able to significantly change space layouts for new ways of working or office refurbishments, for example, due to this limited cash flow.  


Organisations of various sizes have faced challenges in relation to their people, such as managing the shift to remote working. Some of the commentary on this topic has highlighted that SMEs are actually in a better position to identify those struggling with working from home due to their flatter hierarchical structure and better relationships across job levels. This allowed organisations to provide additional support quickly and effectively in order to support their employees wherever they worked.  

What they did find to be a challenge, however, was the impact of home-schooling and other caring responsibilities on their workload and working patterns. Whilst this may not have been as noticeable in larger organisations, when key individuals in a smaller team need to prioritise their child’s learning it can severely impact the progression of projects and business needs. 

However, within our research and interviews conducted with key stakeholders within SMEs, an opportunity was identified in that the flatter organisation structure typically prevalent within smaller organisations facilitated the development of stronger relationships between staff members. The smaller number of employees made it easier to hold company-wide meetings to explain new plans or processes in response to the pandemic, seek feedback from everyone, and strengthen existing relationships, from senior management to lower or entry-level employees. This also enabled managers to identify if staff members were struggling when working from home, and if they were taking enough breaks from work, even if they couldn’t take proper holidays.  

When we consider the role of the office for SMEs within the people context, having closer relationships with employees allows for clearer communication regarding who to return and when, focusing more on those who may require extra support or extra flexibility. Furthermore, if SMEs wish to adapt or redesign office spaces for new ways of working, this can be discussed with staff quickly, allowing SMEs to be agile and responsive to economic changes and pressures. If this can continue, the workforce of SMEs can become more cohesive, collaborative and supportive of each other as we transition back into the physical workplace. 


An investment in new technology to support working from home and hybrid working patterns was seen across all organisations and sectors given the sudden onset of the pandemic. But while many of the bigger organisations invested in software such as Zoom or MSOffice packages, some SMEs didn’t have the cash flow or business need to invest in such comprehensive tools. Other software were available, more cost-effective and typically more tailored for SMEs, such as Google Meet. However, subsequent dealings with other larger organisations sparked the realisation that many IT security restrictions blocked meeting invites from these lesser-used platforms. And so, while this technology was brought in to support the business, it didn’t always support business development.  

However, when investing in new forms of technology to work remotely, our research with SMEs revealed that they were able to consult with their employees closely before implementing any new technology. Employees were given the opportunities to not only try software before investing in them, but were given freedom and responsibility to source any other forms of software they felt were needed to do their job properly. This meant that the new technology was suitable for everyone’s job tasks. The adoption of the new technology was quick and supported by everyone, and workflow didn’t drop as a result of changing processes.  

Furthermore, with continual training on new technology of software, technology was used effectively to support employees with any new working patterns both during and following the pandemic, as they had the technological tools required to work from home or in a hybrid model if needed, giving them the confidence to work effectively anywhere. Investing strategically in key technologies which support current and future business needs can generally save funds in the long-term, allowing for investment into other areas of the business such as employee development and office re-design. Investing in these areas was considered key in attracting new talent and growing businesses more in the coming years.  

Ultimately, SMEs have faced some unique challenges during this pandemic, but also may have experienced some new opportunities which they were able to exploit during this unprecedented time. It is important to understand not just how SMEs have been impacted, but how they can reopen safely and efficiently, and grow coming out of the pandemic.  

We are currently conducting research into the experiences of employees and adaptations of offices during and after the pandemic – if you would like more information please get in touch. You can also join our mailing list.

This project - Adapting offices to support COVID-19 secure workplaces and emerging work patterns - is funded by the Economic and Social Research Council (ESRC), as part of UK Research and Innovation’s rapid response to Covid-19. 

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