Bosses remortgaging homes to avoid making redundancies

This includes 35% admitting to having taken significant pay cuts in the last five years to avoid laying off workers.

Far from just a short-term measure, of those who have reduced their earnings to avoid making redundancies, 60% say it’s something that’s lasted for more than a year and nearly one in five (17%) say it could go on indefinitely.

What’s more, when it comes to the actual amounts bosses are foregoing, they’re far from token gestures.

Of those that have reduced their own wages, 70% have cut them by as much as a half, while one in 20 admit to scrapping their salaries completely.

But the sacrifices don’t stop there. As well doing away with marketing and advertising budgets (21%), they’re re-locating to smaller premises (12%) and off-loading stock / inventory at greatly reduced prices too (7%).

Janet Connor, Managing Director, More Th>n, said: "Business owners care about the bottom line and rightly so. It’s sad that so many small business owners have had to remortgage their homes and take hefty pay cuts, but at the same time it shows real compassion on their part that they’re prepared to sacrifice personal gains for the sake of their staff.

"This research shows that the trading environment for small businesses remains tough but the latest set of results from the BIG suggest they might be able to look forward to the summer with greater optimism – the relatively low 0.31% increase in costs for Q4 2011 follows an even smaller 0.05% increase in Q3. Things won’t change overnight but this is good news."

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One thought on “Bosses remortgaging homes to avoid making redundancies

  1. Viv Leach

    I am not at all surprised in this finding that businesses are EVEN (yes, EVEN) resorting to remortgage their homes (they must be big homes or the business owners must be embracing risk?) to ensure they can survive, pay their staff wages and keep ploughing on until the winds of this current recession blow over. Those that are doing that may be the entrepreneurs (it means bold undertaking, you know) that possess the resilience, determination and persistence that it takes. Though, I think its going to take a crystal ball to know if these businesses have done the right thing or not. It certainly sounds commendable if the economic situation turns around so people have the confidence and resources to spend. If not, then its only a matter of time before the financial powers that be will be poised to put up interest rates and that could leave a lot of businesses in a deeper mess if they are unable to secure new contracts, sell more products and services and keep belts tightened. They must know something about throwing caution to the wind if they put their properties on the line? If they get it wrong then thats going to lead to even more properties coming on to the market that join the ever growing number that are not selling.

    I worry even more for the one-man band business, who hasnt even thought of remortgaging. Or maybe they have and they dont think this is the best option. Is that why more one man band businesses are preferring to fold and become a part of the army of unemployed chasing the jobs that are about – I just heard today its 20 people chasing each job. I dont think that is right. If you speak to the businesses who are advertising employed posts its more like HUNDREDS of applications. I suppose if there is no work where you live, then at least you can put your house on the market to move to an area where there is work? Er, wrong. Cos, saying that, house sales remain a problem too unless you have so much silly money that you can pick up a bargain miillion pounds property at a knock down price.

    The parting shot paragraph with the latest research stating that although things are tough they might be able to look forward to the summer with great optimism….. yes, if they set up a Charity Shop as people seek even more bargains; or if they think about setting up a Social Enterprise to give something back to the community? All I know is that with changes come a cascade of effects. It doesnt matter if you are in business or not, if you are having to survive this economic uncertainty you will have to face facts that you will have to keep on smiling no matter how hard it gets; you will have to keep on taking action and motivate those under you so that they believe that you can keep your business afloat.

    When you are the business at the receiving end then yes, you do whatever it takes. In every situation there will be winners and losers. Just make sure if you are remortgaging your home that your business will be one of the winners!

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