Nearly half of small business owners and managing directors (47%) had to stop their own pay due to the impact of unfair payment practices by their buyers, according to new survey findings from engineering services trade bodies ECA and BESA.
A whopping 92% of respondents said their business had faced payment issues, while 65% said they were paid late frequently or very frequently.
Overall, three-quarters of business owners said they had made sacrifices, including reducing their own salary (37%), and cancelling company training and learning activity (23%). More than one in three said they have struggled to pay business taxes due to payment issues.
Alarmingly, almost one in 10 employers were forced to pay their own staff late – an action which can have devastating effects on employees, who may then miss mortgage or rent payments as well as other vital overheads such as utilities and loan repayments.
Rob Driscoll, ECA Director of Legal and Business, said: “This ground-breaking data shows the truly devastating effects late payment has on the lives of business owners, their staff, their children, and their wellbeing.
“With a lack of fair payment directly causing widespread mental health issues, abusive payment practices fundamentally remove the capacity for individuals to feel purpose or value in a sector which enables £540 billion GDP within the wider UK economy. The data lifts the lid on the industry’s self-harming commercial behaviour.”
The survey was held in association with the Prompt Payment Directory. Survey supporters cover a range of construction activity, including electrical, plumbing, building, scaffolding, roofing, civil engineering, fire safety, painting and decorating, and interiors. They include SELECT, the Scaffolding Association and Chartered Institution of Civil Engineering Surveyors.