Small businesses rising hire and hire

Last month, myhrdept posted an article entitled ‘Employment High’, outlining the employment rate hitting a record high at 73.1 per cent in the three months to May.

This week, according to the CBI (Confederation of British Industry), it seems that small businesses have gone on their biggest hiring spree since records began a generation ago.

Booming domestic demand has delivered a fourth consecutive quarter of growing output and orders for small and medium-sized businesses, according to the CBI’s SME Trends Survey. Numbers employed by smaller companies rose at their fastest rate since the survey started in 1988, with 24 per cent of companies saying that they were increasing staff numbers.

The figures will fuel some optimism that the economic recovery will flourish beyond London and the financial services industry. However, in the three months to July, export orders remained flat,. The CBI said that “The disappointing export performance may be a consequence of the strong pound, which has forced about a dozen quoted exporters into profit warnings in recent weeks”.

Katja Hall, the CBI’s deputy director-general, said “Smaller manufacturers are settling into a regular growth pattern, with their order books and output growing for the fourth consecutive quarter. Firms remain upbeat about their business situation”.

Ms Hall went on to add “We need the government to get behind our small and medium-sized manufacturers to help them to sell their products and services to new markets around the world, giving a sustainable boost to long-term growth.”

About 31 per cent of companies said that they were more optimistic about their business situation, against 11 per cent who reported being less optimistic.

However, the CBI aired caution that shortages of skilled labour were hindering companies’ growth plans. The proportion of companies citing skill shortages as a factor slowing down output rose sharply, from 14 per cent to 23 per cent, over the quarter.

According to the Department for Business, Innovation and Skills, small and medium sized businesses account for 59 per cent of private sector employment and 48 per cent of private sector turnover. Small businesses with fewer than 50 employees account for 47 per cent of private sector employment and 33 per cent of private sector turnover alone.

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