Small Businesses Planning To Increase Their Headcount

SMEs Plan To Recruit As Confidence Levels Continue To Rise

21.01.2014

Fergal Dowling, Partner | +44 (0)121 214 5476

The recent upturn in economic activity has given more small British businesses the confidence to hire new staff.

According to a new report by recruitment firm Michael Page, 48 per cent of small and medium enterprises (SMEs) are planning to increase their headcount in 2014.

The organisation's 2014 Employment Trends Survey showed smaller firms are more likely to add new members to their teams than large corporations.

Managing director at Michael Page Oliver Watson said: "SMEs are bullish compared to large companies in the core business hubs of the UK.

"In London and the Home Counties, 41 per cent of SMEs reported that they would increase headcount this year compared to only 20 per cent of large companies."

He added that a similar pattern is emerging in the Midlands and north-west of England.

In central parts of the country, 41 per cent of smaller businesses are looking to expand their workforce this year, while just 20 per cent of large corporations have similar ambitions.

As for the north-west, the report confirmed that 37 per cent of SMEs are in a position to grow, compared with 32 per cent of large companies.
 
Mr Watson stated that all of the main industries that contribute most to the nation's gross domestic product have performed well of late, with automotive, construction and manufacturing firms all reporting an upturn in fortunes towards the end of 2013. Banking organisations also reported encouraging levels of growth in the final quarter of 2013.

"Within these key sectors SMEs are trumping large companies in relation to hiring optimism," he continued.

These findings tie in with a recent study published by audit, tax and advisory firm BDO, which showed companies are growing in confidence.

Its latest Optimism Index reached 103.1 in November, which was up from 101.7 in October. This represented the strongest performance since April 2010 and provides more evidence to support suggestions the UK economy is starting to mount a sustained recovery.

Expert Opinion
With an increasing amount of good news emerging in relation to the economy, it is unsurprising to see that small businesses developing recruitment plans and looking to bring new people into their organisations.

"Start-ups and entrepreneurs should be wise to the benefits that an influx of new talent can bring into a business, offering not only more hands on deck but also new skills and ideas.

"However, it is equally important for SMEs to be wise to the need to have the right structure in place to handle recruitment and human resources issues, such as access to legal advice on employment issues such as contracts, policies and the offering of benefits.

"Growing a business can be a difficult process, but the right support at hand can ensure a smoother development process."
Fergal Dowling, Partner