Employee support and assistance to the Armed Forces remain a priority for SMEs

13/ 11/ 2023

The new wave of the EBAs quarterly survey SMEs in Wartime shows that the number of companies that pay salaries to employees in full and support the Armed Forces and humanitarian projects is currently higher than the number of those that have resumed their full-fledged work. Currently, almost half of the surveyed entrepreneurs united by the Unlimit Ukraine project, namely 45%, are working in full. Another 48% are currently working with restrictions, and only 7% are not working. At the same time, 63% fully fulfill their obligations to pay wages, and 53% of respondents provide financial support to the armed forces and the population. Even though the number of companies that pay wages in full has increased from 56% to 63% over the past three months, some negative trends remain in the labor market. A fifth of respondents are cutting salaries, and 3% are not able to pay at all. In addition, 17% of respondents resort to staff reductions. At the same time, SMEs are increasing their support for the armed forces and the population: 53% provide financial assistance (48% in Q3), and 24% help their own employees involved in the countrys defense (19% in Q3). In addition, 28% help with their own products, and 26% provide services. The number of companies with employees mobilized to the Armed Forces has increased from 37% to 41% over the past three months. In particular, in 26% of companies, their number is up to 10% of the companys employees liable for military service, in 8% - it reaches 10-20%, in 6% - 20-30%, and in 1% - 30-40%. At the same time, a fifth of respondents (21%) report that among those mobilized are specialists critical to their companys operations, including company executives, technologists, engineers, mechanics, production operators, and accountants. In the temporarily occupied territories, 9% of the entrepreneurs we surveyed still have assets. Mostly, these are land plots, office and production facilities, goods and equipment, and vehicles. One-third of the entrepreneurs we surveyed, including 33%, have no financial reserves at all. It is slightly higher than in the third quarter (28%). A fifth of entrepreneurs (20%) have reserves for several months, 15% - for six months, and 28% - for a year or more. Only 2% have reserves for one month. About a third of entrepreneurs, namely 28%, report that their business has suffered losses as a direct result of hostilities. In general, businesses estimate losses from the war as follows: 59% report losses of up to USD 50 thousand, 7% - in the range of USD 50-100 thousand, and 21% - over USD 100 thousand. Anna Derevyanko. Executive Director of the European Business Association. Although the trend towards the resumption of small business is positive, we see that less than half of the surveyed companies were able to return to full operation. In this context, government support and direct support from international partners are very important, which is confirmed by other EBA studies. Grants, affordable lending terms, and proper information about other support opportunities would allow more entrepreneurs to recover. For reference: The survey was conducted from October 20 to 31 among individual entrepreneurs who are participants of the Unlimit Ukraine SME support project from the European Business Association. A total of 86 entrepreneurs took part in the survey.

The new wave of the EBA’s quarterly survey “SMEs in Wartime” shows that the number of companies that pay salaries to employees in full and support the Armed Forces and humanitarian projects is currently higher than the number of those that have resumed their full-fledged work.

Currently, almost half of the surveyed entrepreneurs united by the Unlimit Ukraine project, namely 45%, are working in full. Another 48% are currently working with restrictions, and only 7% are not working. At the same time, 63% fully fulfill their obligations to pay wages, and 53% of respondents provide financial support to the armed forces and the population.

Even though the number of companies that pay wages in full has increased from 56% to 63% over the past three months, some negative trends remain in the labor market. A fifth of respondents are cutting salaries, and 3% are not able to pay at all. In addition, 17% of respondents resort to staff reductions.

At the same time, SMEs are increasing their support for the armed forces and the population: 53% provide financial assistance (48% in Q3), and 24% help their own employees involved in the country’s defense (19% in Q3). In addition, 28% help with their own products, and 26% provide services.

The number of companies with employees mobilized to the Armed Forces has increased from 37% to 41% over the past three months. In particular, in 26% of companies, their number is up to 10% of the company’s employees liable for military service, in 8% – it reaches 10-20%, in 6% – 20-30%, and in 1% – 30-40%. At the same time, a fifth of respondents (21%) report that among those mobilized are specialists critical to their company’s operations, including company executives, technologists, engineers, mechanics, production operators, and accountants.

In the temporarily occupied territories, 9% of the entrepreneurs we surveyed still have assets. Mostly, these are land plots, office and production facilities, goods and equipment, and vehicles.

One-third of the entrepreneurs we surveyed, including 33%, have no financial reserves at all. It is slightly higher than in the third quarter (28%). A fifth of entrepreneurs (20%) have reserves for several months, 15% – for six months, and 28% – for a year or more. Only 2% have reserves for one month.

About a third of entrepreneurs, namely 28%, report that their business has suffered losses as a direct result of hostilities. In general, businesses estimate losses from the war as follows: 59% report losses of up to USD 50 thousand, 7% – in the range of USD 50-100 thousand, and 21% – over USD 100 thousand.

Anna Derevyanko Executive Director of the European Business Association

Although the trend towards the resumption of small business is positive, we see that less than half of the surveyed companies were able to return to full operation. In this context, government support and direct support from international partners are very important, which is confirmed by other EBA studies. Grants, affordable lending terms, and proper information about other support opportunities would allow more entrepreneurs to recover.

For reference:

The survey was conducted from October 20 to 31 among individual entrepreneurs who are participants of the Unlimit Ukraine SME support project from the European Business Association. A total of 86 entrepreneurs took part in the survey.