THE likelihood of small businesses creating jobs to drive economic growth is in jeopardy because fewer believe they will be able to employ new staff in the year ahead, according to a new survey.
Over a fifth of small business owners expect to recruit this year but confidence that they will be able to do so is dwindling compared to December 2010, when almost 30% of respondents to the quarterly Forum of Private Business said they planned to take on new staff.
And the survey found 14% intend to simply recruit in the coming year, while a further 8% plan to hire, but believe they will have to train new staff in the necessary skills their businesses require.
In addition, business owners have identified a pressing need for external support and training for themselves and senior managers in a number of key areas, including finance, product development, employee engagement and sales and marketing. “It is concerning that small business owners’ confidence in their ability to create jobs in the current economic climate and drive recovery is falling.
“Clearly, there is still a pressing need to address barriers such as employment taxes and red tape, steep recruitment costs and skills issues,” said the Forum’s research manager Tom Parry.
“But we also need measures to support staff retention – and the upskilling of senior managers and business owners themselves. Further, policies such as the abolition of the default retirement age are unhelpful at a time when we should be incentivising business growth and job creation with employment-friendly incentives.
Parry added: “Micro, small and medium-sized businesses were responsible for 65% of jobs created between 1997 and 2007, so smaller employers are crucial to job creation in this country.
“In contrast to the United States, where smaller firms are already starting to employ again, the high cost of employment, fear of making a mistake in the recruitment process and the continuing uncertain business climate are deterring our members from recruiting at this present time.”
More than half said they expect to retain their current employees, with an additional 4% identifying a skills shortage among existing workers, while just 4% believe they will have to shed some staff in order to meet their growth plans. In addition, 4% intend to use only subcontracted labour.
Approximately a quarter of respondents said greater profitability would support their efforts to retain staff, with 17% citing less red tape, 15% improving business confidence and 11% support for training in the workplace.
Just 10% of respondents feel they can develop the skills required to access further finance internally, while more than half are seeking outside help.
