Small businesses are looking at flexible working as a way of cutting costs, new figures show.

The research, from mobile communications firm T-Mobile, shows that 47% of small and medium-sized enterprises (SMEs) are considering a flexible working policy to reduce overheads, while 49% say that their mobile communications contracts give them adequate flexibility to be able to react to an uncertain economy and 47% now feel more pressured to allow employees to work flexibly compared with two years ago.

Graeme Leach, chief economist of The Institute of Directors (IoD), said: "The UK has enjoyed 15 years of successive growth but this is now coming to an end. Many SMEs will have never experienced recession before and so the risk of under or over reacting to the downturn will be high. Life is going to get a lot harder before it gets better. Thus far the winds of recession have been confined to the housing and construction sectors together with certain big ticket markets such as cars. This is about to change as the ripples of recession spread out across all SME sectors.”