SME recruitment booming

2004

Demand for staff in small firms has reached a two-year high, with nine out of ten planning to recruit over the next few months and many facing skills shortages.

A poll of 1,500 SMEs by recruitment firm Reed has found that recruitment demand in SMEs is nearly 10 percentage points higher than demand in larger organisations.

The figures also suggests that redundancies in smaller firms are running at half the level of large companies, with a mere five per cent planning to shed staff compared with one in ten larger organisations.

But this SME hiring boom comes at the cost of growing skills shortages. Half of small firms said that they were experiencing difficulties finding the skilled staff they needed.

Reed’s Chief Executive, James Reed, said that SMEs were leading UK recruitment demand, reinforcing their reputation as the engine of growth within the UK economy.

"While large organisations continue to restructure and public sector recruitment demand is slowing, SMEs are moving quickly to meet economic opportunities and are recruiting at record levels," he said.

"Although this trend is good news for job-seekers, if it continues it will raise concerns about salary inflation."

Stephen Alambritis, of the Federation of Small Businesses, said that Reed’s figures confirmed their own belief that small firms were growing fast.

"Earlier this year 43 per cent of our own members reported an increase in employment compared with two years ago,” he said. "Only 16 per cent experienced a drop in job numbers.

"Small firms are innovative and flexible and are set to continue to be the UK's job creation champions."