A recent survey of business owners at small to medium-sized enterprises has highlighted that employee wellbeing will be their top area for investment in 2025, outranking product and technology development.
The study, conducted by Skipton Business Finance asked almost 1,000 business owners and key decision-makers questions concerning business optimism and priorities over the next 12 months.
Business owners ranked employee wellbeing as the top area for investment this year (27%), followed by product development (20%), technology innovation (16%) and the recruitment of top talent (12%).
The study shows that the general outlook towards managing a business in 2025 is optimistic, with 75% of respondents reporting a more positive view of the year ahead compared to 2024.
Matthew Shepherd, Chief Commercial Officer at Skipton Business Finance says: “It’s encouraging to see most business owners entering 2025 have a renewed sense of optimism, despite ongoing economic challenges. Our survey results highlight the resilience of UK business owners and it’s great to see that above all, employee wellbeing is a priority.
“Happier and healthier colleagues in an employee-first environment are key to maintaining staff levels and can have a huge impact on the overall success and customer service levels of a business.
“We’re finding more of our customers are not only putting time into prioritising the welfare of staff but are willing to invest funds into the likes of flexible working solutions and mental health support initiatives.”
Understanding last year’s challenges
Findings from the survey also highlighted persistent challenges and evolving priorities as businesses look to navigate economic uncertainty.
In 2024, cash flow was identified as the most pressing challenge for businesses, with 27% of respondents citing it as their primary concern.
Other challenges included hiring and retaining staff (17%), business retention and rising business rates (15% each), and the pressures that come with feeling personally responsible for the success of the business (14%).
How do governmental changes impact the results?
Economic uncertainty is still the top concern for 45% of business owners in 2025, followed by inflation and the rising costs of living (both 15%).
The majority (54%) of business owners also said they do not feel that the UK leaving the European Union supported the business as it intended.
This was followed by addressing skill gaps and shortages (10%), followed by plans to upgrade ports and build supply chains across the UK (8%) and the promise to reform education, such as apprenticeship opportunities (5%).
Matthew Shepherd also said:
“Despite ongoing challenges such as rising wages, material costs, rent, and energy expenses, it’s encouraging to see SMEs remain optimistic. In today’s economic climate, maintaining a positive mindset as a business owner goes a long way.”
