The next time you look enviously at your 'rich' boss they might have in fact just remortgaged their own home to pay your wages and let you keep your job.
Recent research by the business arm of the UK insurer Moreth>n, 10% of small business employers have done just that, they have remortgaged their own homes so as to retain their staff rather than make them redundant.
Not only that says Moreth>n, these 'benevolent British bosses' are taking other financial hits to keep their employees' salaries going. A full 35% said that they had taken significant personal pay cuts over the last five years in favour of laying off their staff.
And of the 300 firms surveyed in March 2012, 60% of those who have taken pay cuts said that it lasted for more than a year and 17% said that this situation could endure indefinitely.
These bosses have also cut other budgets such as advertising and marketing as well as 12% of them re-locating to smaller premises and 7% selling off stock at bargain-basement prices.
Many of them (28%) have also considered relocating to where the business is more likely to be.
Moreth>n Business produces the Business Inflation Guide (BIG) index that looks at inflation for the 20 most critical costs for business. The latest of these shows that costs for the have risen only marginally for the last two quarters bringing at least a little relief for many business owners.
Janet Connor, Managing Director, MORE TH>N commented “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 per cent increase in costs for Q4 2011 follows an even smaller 0.05 per cent increase in Q3. Things won't change overnight but this is good news.'
But on the flip side, how much time has really been bought at the cost of these remortgages? I also wonder how many of them put down the real reason for remortgaging and raising the cash on their mortgage applications; because if they had, one wonders if the application would actually have been accepted.