SMEs To Create Nearly Two Million Jobs This Year

Smaller Firms On Course For Huge 2014 Recruitment Surge

21.08.2014

Steven Beahan, Partner | +44 (0)114 294 7868

SMEs in the UK are set to create 1.9 million jobs over the course of this year, a new report has indicated.

The Direct Line for Business poll indicated that 29 per cent of small and micro businesses will add to their payrolls, with this tally including 400,000 home-based enterprises that will take on an employee for the first time.

Across the various regions, London is set to lead the way in small businesses taking on new staff, with 41 per cent set to do so, followed by 35 per cent in the south-west and 31 per cent in the north-west. At the opposite end of the scale, only 15 per cent of small firms in the north-east intend to hire someone.

The typical hours worked by a new staff member will be 28 per week, or 21 hours for firms hiring their first employee. Small firms will pay new workers £14,405 a year on average. In total, the expansion of the workforce through small business hires will generate an extra £27 billion in pay.

This increase in SME jobs appears to reflect the general pattern of growth across the UK, with the workforce now at a record size of 30.6 million.

The latest KPMG/REC reports on jobs across the UK showed the national picture to be very healthy, with July bringing the fastest rise in placements in five months.

On a regional basis, London saw a major surge in permanent vacancies, the south of England outside the capital witnessed rapid growth in both permanent and temporary roles, while the growth in starting salaries was at its highest in the history of the study in both the Midlands and the north.

Expert Opinion
This year has seen a dramatic turn-around in terms of the prospects and ambitions of many businesses, with improvements in the economy leading to a growing sense that now is the time for entrepreneurs and small businesses to carefully consider their options and how they intend to grow their operations further.

"Recruitment is a prime opportunity for businesses to not only increase their number of employees, but also diversify the talent and skill sets that they have at their disposal. Making the right choices in this regard can make a massive difference in efforts to expand and develop offerings.

"However, while growing a workforce is a positive, SMEs need to be wise to potential pitfalls and growing pains which can emerge. The right HR policies and initiatives need to be in place if steps are to be taken to ensure that workers are aware of their roles, but also engaged and motivated. Getting legal advice on this front is an absolute necessity."
Steven Beahan, Partner