Many employees will receive an additional 2.5 days of annual holiday leave at Christmas, which equates to 120 million days.

To celebrate the year’s end, 44% of small- and medium-sized companies will hold a festive party and 41% will completely shut down operations between Christmas Eve and New Year.

One in four employees (25%) will also be eligible to receive Christmas bonuses.

This is despite the fact nearly half (47%) of SMEs reporting concerns about their business prospects for next years.

Larger businesses are also feeling it. Nearly two-thirds (59%) predict a drop in consumer spending. 41% are worried about their businesses prospects as 2023 approaches.

Nearly seven out of ten (68%) SMEs are concerned about the negative effects that rising energy costs will have on their businesses.

Barclays conducted a survey of 578 leaders of small and medium-sized companies as part its quarterly SME Barometer research.

Colin O’Flaherty, at Barclaycard Payments, said: “The upcoming festive period will be our first since the pandemic without restrictions, with both employers and employees looking to make the most of it.

“While it’s been yet another challenging year for businesses, many SMEs are looking to inject some festive cheer by rewarding their employees, as business owners are aware of the positive impact that employee morale can have on staff retention.

“Our research, however, shows that although owners are very aware of the difficulties to come, they remain resilient in the face of risings costs, and we hope this festive period allows them to celebrate their achievements and ring in the New Year with energy and a degree of optimism.”

Honoring employees during the festive season

41% of SME employers also believed that staff activities leading up the holiday season contributed to employee retention.

In a separate poll of 2,000 respondents, 33% indicated that they are less likely look for another job if the employer rewards staff with Christmas-related activities.

Employers are experiencing an increase in the demand for benefits from new workers. According to 28% small businesses, more annual leaves is one of the top three benefits being requested. It follows higher wages (87%) and more flexible work (56%)

Data from Barclaycard Payments, which processes £1 in £3 of debit and credit card payments in the UK, showed a slight decrease of 1.58 per cent in the value of card payments to SMEs from July to September 2022 compared to the same period in 2021.

But more than half (55 per cent) of SMEs reported their total revenue grew – with turnover up around 9.1 per cent year-on-year, on average.

Businesses expect growth to continue during the festive season. 51 percent of respondents predict a year on year increase in revenue in Q4, while 49 percent expect revenue to grow from Q3 through Q4.