Effects of COVID-19 on the UK Service Sector
The Covid19 pandemic started in 2019 had an effect to all the economies at a global scale. This is evident with mainly the services sector which identified its recovery as a result of nationwide lockdown implemented in March-May 2020. In the first half of 2021-22, the overall growth in the service sector was identified with 10.8%. In addition to this, the GVA pertaining to the services sector is estimated to grow by 8.2% till the end of 2022. However, as per the latest report by “McKinsey Global Survey” it is estimated that despite of the relatively optimistic year the rising number of cases in North America and Europe since October 2021 was a considerable threat to the economy (Belghitar, Moro and Radi? 2021). This is especially in relation to the Omicron Variant. It is worth noting how over 57% of the global economy which was previously expected to increase till March 2022, has demonstrated a decline since the previous quarter. Moreover, the expectation of over the Covid-19 pandemic is particularly alarming in many countries including the UK (Juergensen, Guimón and Narula 2020). The purpose of this essay is to evaluate the overall impact of standard of living and employment in the UK in terms of managerial decision-making by the SMEs with the use of relevant economic policies.
As a response to the COVID-19 situation in the UK, the government introduced several measures associated with employment which are to be followed by the SMEs. In this aspect, the “Job Retention Scheme (JRS)” can be identified as one of the main measures introduced by the government of the UK in order to help the employers maintain their present workforce which has been affected as a result of the COVID-19 outbreak. In this regard, the SMEs were eligible for application of HMRC grant in relation to the employment cost for individuals who were not working or working temporarily with reduced part time hours. The scheme was scheduled to expire on 31 October. However, relevant extension was made till 31 March. There had been numerous claims in relation to the period ended before 31 October (Papadopoulos, Baltas and Balta 2020). In this aspect, the extension until 30 November 2020 was provided by the government. As per the relevant initiative taken by the government, more than 80% of the total employees were subject to a maximum capital of £2,500 per month which further reduced to actual number of hours worked at the time of the claim period. Similarly, some of the other economic policy response can be identified with how Kickstart scheme was applied to Wales, Scotland and England only. This was introduced as a support scheme for employment which targeted SMEs claiming universal credit as a large number of employees being on long-term unemployment. There were, the kick starter placement scheme covered the wages of the individual employees during 25 hours of working in a week. Similarly, the first placement associated with the scheme started in 12 November with consideration of 20000 individuals employed by December 2021 (Cowling, Brown and Rocha 2020).
Government Initiatives in Response to COVID-19
The different types of existing small and medium enterprises in the UK have a significant role in shaping the economy. The present findings pertaining to the SMEs in the UK has been able to account for more than 50% of the total revenue nationally on an annual basis within the various types of businesses. As a result of collecting such high amount of revenues from the SMEs, the government has been able to implement variety of precise programs which are seen to aim at ensuring national development. Despite of such ideation, the Covid-19 pandemic has been seen to have a drastic impact on the commercial activities being conducted within the SMEs in the UK (Zutshi et al. 2021). As a result of being identifying the first case of Covid-19 in the UK, the performance in the SMEs is identified to hit rock bottom in many regions. Moreover, the majority of the enterprises which were newly established needs to support the decision for the venture capitalists as for the everyday business operations. Along with this, the multiple range of entrepreneurs are seen to be helpless as a result of being put out of their commercial errands which are on hold. On a similar note, the government in the UK has also realised the decline in the revenue as a result of difficulty in supporting different types of actions within the nation (Brown 2020).
The relevant journal articles have been able to point out the precise data in relation to influence of effects on employment and standard of living in the UK with respect to managerial decision-making in organisations especially SME. Based on the findings of such articles, the authors of mainly emphasised on how the overall impact of pandemic pertaining to the SMEs in the UK has been seen with the considerable impact on government intervention in providing an appropriate solution for the crisis. Moreover, there has been a significant amount of argument from the imminent others in the United Kingdom on how the SMEs take a relatively longer duration for establishing concrete foundation being the businesses (Brown, Rocha and Cowling 2020). Along with this, the ongoing pandemic has implied on a significant role in formulating plans within the SMEs which are particularly seem to be disoriented in nature. While the considerable effect of Covid-19 on the SMEs in the UK is based on the fact how a large number of SMEs within the region has been compelled to retrench several employees. Therefore, in terms of effects on employment and standard of living in the UK with respect to managerial decision-making in organisations the SMEs have been in turn forced to retrench employees in mass. In this context all authors have also particularly indicated on the fact how most of the SMEs operating within the UK have encountered certain uncertainties in terms of retention capacity of the staff. As a result of the fact of the existence of economic volatility in the UK, a majority of the SMEs is seen to be losing a considerable track in terms of revenue and facilitating the clients with affordable prices of services and goods (Brown and Cowling 2021).
Role of SMEs in the UK Economy
The weaking of economy within the SMEs as a result of the Covid-19 pandemic has created laying off as the only solution for majority of the employees in order to reduce the aggregate cost associated with production. On a similar note, there has been availability of similar options to the SMEs in the UK to borrow loans from various financial institutions in order to compensate the financial requirement. Therefore, although authors in the subject have opined how an inferior economic standard is seen as the main problem associated with several regions to implement lockdown for a considerable amount of time period, thereby greatly impacting the commercial errands for them to the SMEs (Puthusserry, King, Miller and Khan 2022). In this aspect, the relevant research addressing this issue has emphasised on how the SMEs are not seem to be in an appropriate position to earn considerable profits in comparison to what they used to make in the past. This is significantly increased the challenge to repay off previous instances of debts. In some of the other cases, it has been has also perceived how the SMEs have been greatly impacted by the COVID-19 pandemic in terms of extent of venture of the business being bankrupt and admitting significant number of debts, thereby affecting the firm’s profitability. In this aspect, the specific authors have anyone to did how the importance of venture capitalist to address future cases of new strikes associated with pandemic should be planned from beforehand (Gourinchas et al. 2020).
The discussed issues concerning the SMEs within the UK has ensured a proper investment in the risk management in order to minimise the different types of risk as in from others (Razumovskaia et al. 2020). In this manner, the deployment of precise strategies is seen to be relatively easy for entrepreneurs to address the existing weaknesses and strengths for preparing for the crisis well in advance. It is further worth noting how the editorial ascertainment in relation to the ongoing Covid-19 pandemic has translated to significant loss within the UK (Brown and Cowling 2021).
As per cited studies, we are able to understand how the medium and small size enterprises within the UK has been identified with sectorial impact. In this context, the highest effective sector within the SME can be directly identified with wholesale, agriculture, construction, professional services and logistics. Based on the affirmations provided by Hopley Lee, the most highly sectors were directly understood with government support sectors which are dependent on sustaining their business or individual activities (Amankwah-Amoah, Khan and Wood 2021). Despite of the present study is being conducted in relation to Covid-19 pandemic in the UK, there exists a considerable number of studies which shows how government was compelled to allocate the majority of the funds in their budget focused on the spread of the virus in not just UK but other countries as well. Therefore, a considerable number of funds had to be emphasised on factors such as providing purchase options for the instrument and investing in health sectors. These actions prompted a challenge for the vast number of SMEs and is also caused different losses pertaining to errands and financial position in consideration of the limitations as well. Therefore, based on the reported studies, the authors have investigated how there exists a large number of SMEs which is dissolved in the market as a result of the Covid-19 pandemic in the UK (Roper and Turner 2020).
Impact of COVID-19 on SMEs in the UK
The analysis of the existing studies also shows how instances of dissolutions pertaining to the SME is comparable during March 2019 and March 2020. In this regard, the UK has been able to witness significant amount of increase in the dissolution related to SMEs. This increasing the percentage percentages identified with 75%. Therefore, this form of data may not be always be able to provide appropriate support for enterprises are medium-sized and especially and especially when these enterprises will not find any economic support, they tend to fall in performances related to debt. Such an evaluation suggests that both the medium-sized and small size enterprises were seen to be incapable of supporting the relevant ventures may have taken a downturn on the economy. In particular, the West Midlands and Wales in the UK was seen to record the maximum percentage of recordings of economic downturn in these regions. It is worth noting how despite of several initiatives being taken by the government supported programs, the SMEs has found it difficult to access the program (Deschryvere, Mikkola and Conn 2020).
As per the production of original study, apart from the UK, highest number of orders and packages affecting the SMEs in seen to be used on provide different types of supportive program the UK government. In this context, it has been very difficult for the SMEs for the purpose of identifying the factors which can directly and for accessing the different forms of programs. Therefore, the different types of shortcomings for the businesses are being more evident among the SMEs (Faisol, Astuti and Puji 2021). The steps taken by the UK government has compelled the firms to proceed with performing the critical analysis in order to alleviate the problem of the will of economic crisis before the situation gets worse. In this manner, we need to identify that failure to cope up with the exact plans for supporting the relevant SMEs would gradually resulting decreasing number of medium and small size forms in the region risking employment provided by the SMEs across the border (Cigu et al. 2021).
Some of the other studies have enumerated how a strong focus on the impact of over 19 pertaining to the small and medium-sized enterprises in the UK has led to unprecedented uncertainties within the economy. As a result of the outbreak of the illness, several medium and small enterprises have greatly been affected pertaining to the catastrophe. This regard, the relevant research has illustrated how the typical impact of pandemic on the SMEs is mainly concerned with investment postponement (Muriithi 2021). Based on such arguments, it can be inferred that multiple number of SMEs had estimated an overall expansion in the commercial activities in 2019 itself. However, as a result of the Covid-19 pandemic, it suddenly became difficult for the entrepreneurs to carry out their plans. The consideration of SMEs greatly depends on the regular expeditions and travels. This made it difficult for the SMEs perform any kind of expansion in the commercial activities as a repercussion of the rapidly increasing number of Covid-19 cases (Harris et al. 2020).
Retention Capacity of Staff at SMEs
As a result of the UK government considering imposing lockdowns, travel bans and curfews, the SMEs within the UK had to rely on transport sector for and this sector was particularly affected by closing down at the point of operation. On the contrary, some of the other excerpts of the research done by the analyst have indicated how supply chain management sector is associated with the SMEs has been also badly impacted by the Covid-19 pandemic. A majority of the forms in the region associated with outsourcing raw materials in regard to the neighbouring states. As a result of imposing the lockdowns and travel bans across the borders, the supply of the product was affected to a great extent, thereby leading to high amount of price among the products within the country (McQuaid and Webb 2020). Therefore, the pertinent issues in the UK associated with high amount of prices of the products as a result of COVID-19 pandemic had led to a majority of the consumers opting out of substitute products and being able to produce at a cheaper price as majority of individuals was audible to afford the high prices offered by the SMEs (Beraha and ?uri?in 2020). Based on the opinion given by the different types of authors, we are able to identify how a large number of SMEs had no choice but to operate at a loss being resulting in a massive decrease in unit volume sold due to the high price. In contrast, the medium-sized and small size enterprises were ready for facing the pandemic and were immediately forced to perform the necessary adjustments in relation to the strategies of the business among which one was associated with reduction of pricing strategy approach being taken by the SMEs (Akpan, Udoh and Adebisi 2020).
Conclusion
Based on the depictions of a vast majority of research, we are able to conclude that COVID-19 pandemic is seen to impact the overall progress on the SMEs at a global scale. Moreover, all the discourse provided by all the authors has come to an agreement that economic volatility associated with developing firms and blue-chip companies failed to set the target objectives and were therefore were forced to reduce the price for the purpose of meeting customer’s preferences and needs. In this aspect, the key stakeholders were able to develop precise strategies pertaining to risk management and controlling development crisis in the long run. Based on the consideration of such risk mitigation strategies, it would be ideal for the SMEs to proceed with their actions amidst the prevailing challenges. It is further worth noting how capitalising in the online marketing platform would allow the market venture capitalists to involve interactions with individuals and identify the relevant problems.
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