Number of firms taking on new staff halves year-on-year according to latest Bibby Financial Services research
The level of recruitment among UK small and medium-sized businesses has halved in the past 12 months, according to research by invoice finance specialists Bibby Financial Services (BFS).
As unemployment figures continue to rise - standing at a 16 year high of 2.67million according to the Office for National Statistics - the results of BFS’ quarterly Business Factors Index reveals the number of small and medium sized businesses taking on more staff has plummeted year-on-year from 14 per cent in Q4 2010, to just seven per cent in Q4 2011.
The Business Factors Index analyses the performance of BFS’ 4,000 clients across five key sectors as well as surveying the outlook of 450 small and medium sized business owners across the country.
The research has highlighted the difficulties faced by small and medium sized businesses during 2011 as the recovery in the economy, which was anticipated at the start of the year, failed to take hold.
However, there are some signs of optimism for the future of the job market for 2012 as the number of job vacancies rose to 467,000 during the last quarter of 2011.
Edward Winterton, executive director at Bibby Financial Services, said while it has been difficult for businesses to take on more staff over the past year, now is the time to invest in the future and look at the different options to support growth.
He said: “It is not difficult to understand why businesses have been reluctant to take on more staff over the past 12 months with such uncertainty in the economy and challenges such as the eurozone crisis and concerns of a double dip recession.
“Our own research suggests the number of small and medium sized business owners taking on more staff has fallen sharply from 14 per cent to seven per cent year-on-year.But with the number of vacancies opening up, there is cause to be more optimistic about prospects for 2012.
“Businesses need to consider how to grow this year and what investments they are able to make in terms of recruitment. That is why it is crucial to explore the range of funding options that are available, including invoice finance which is a flexible form of funding enabling firms to manage cash flow more effectively and plan for future growth.
“Working with 4,000 clients in the UK, we know that businesses want to grow but continually come up against a number of barriers. Unless UK businesses can find ways to invest in recruitment we will not see the growth from small and medium-sized enterprises that the Chancellor is hoping for to drive the recovery of the economy.”
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