Small businesses are taking on more staff, according to the Federation of Small Businesses (FSB). Its Voice of Small Business Index found that 15% of SMEs have increased their staff numbers in the third quarter of 2013.
This is the highest figure since the Index began in 2010 and mirrors the recent improvement in labour market figures.
The FSB also expects more recruitment in the SME sector from April 2014, when all small businesses will be eligible for a cut of up to £2,000 in their National Insurance Contributions. According to FSB research, small businesses will use the Employment Allowance to boost staff wages (29%), employ additional staff (28%) and invest in resources (24%).
Recruitment by small firms has a significant impact on jobless figures, says the FSB. It says that the vast majority (88%) of unemployed people who enter the workforce do so by starting a business or working for an SME.
John Allan, FSB national chairman, said: “Compared with a year ago, small businesses are employing more staff and are looking to expand in the near future. Our findings show that the Employment Allowance due to kick in next spring will have the desired effect.”
However, a new survey of 2,500 UK SMEs that set up this year has found that 65% of businesses only employ one person. The research by Freelancer.co.uk found that 72% said that they were more confident of keeping staff costs to a minimum as they were able to employ people as and when they needed – suggesting that many small businesses today prefer to use short-term contracts and freelancers.