Unemployment Plunges As SMEs Enjoy Economic Revival

Jobless Figure Plummets Again To 2.16 Million


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

The latest employment figures have indicated that the number of people out of work has plunged again, as SMEs and other companies continue to boost their workforce in response to the economic recovery and increased optimism about the future.

Figures produced by the Office for National Statistics showed that in the three months to April 2014, the number of people out of work dropped by 161,000 to 2.16 million, or 6.6 per cent of the workforce. This represents a fall of 347,000 from April 2013.

The number in work was up by 345,000 compared with the three months to January 2014 and had risen by 780,000 over the previous year, taking the size of the workforce to a new record high of 30.54 million. This increased the proportion of those aged 16 to 64 in work to 72.9 per cent.

Such figures may come as little surprise in light of recent economic growth figures, which have indicated the UK economy enjoyed a gradual improvement in output last year that has accelerated in 2014.

The news was hailed by the Department for Work and Pensions, with employment minister Esther McVey commenting: "As we build a stronger economy, businesses up and down the country are feeling increasingly confident about creating jobs, meaning many thousands more people are in work every day - ensuring a better future for them, their families, and for the country as a whole."

Shadow work and pensions secretary Rachel Reeves said the fall in unemployment was "welcome," but argued many are "struggling to make ends meet" as pay rates have not kept up with inflation.

The rise in employment looks set to continue, according to the latest Markit/CIPS Purchasing Managers' Indexes.

It revealed that the rate of increase in service sector recruitment has reached its joint fastest level in 17 years - in response to growing backlogs of work and orders - while increasing confidence means companies are set to expand their investment further.

Expert Opinion
Falling unemployment is very welcome, but it is important that businesses of all sizes in sure they have the human resources capability and expertise in place to ensure the correct policies are in place to ensure that new staff are aware of their responsibilities and duties when being hired.

"It is particularly important for smaller businesses to ensure they have access to specialist advice from third parties including lawyers, particularly as such growing firms may not necessarily have the in-house skills or expertise to ensure that contracts and other policies meet the necessary criteria.

"The dangers of not addressing this issue could be significant, so it is vital that businesses ensure from the outset that they are equipped and prepared for the growing pains which can emerge when developing their operations."
Fergal Dowling, Partner