Despite considerable challenges remaining on the road to full economic recovery, 2014 looks set to be a brighter year for the UK’s 4.9 million small and medium-sized enterprises. New research conducted by Clydesdale Bank reveals that planned staff recruitment by SMEs this year should create over 400,000 new jobs across the UK. This equates to a nearly 3% rise in staff across the entire SME sector.
The bank’s report, issued after surveying over 800 SMEs, will be good news for the government and business leaders, as the financial health of Britain’s SMEs is traditionally seen as indicative of the nation’s overall economic performance. While over half of the businesses surveyed did not plan to increase their staffing levels, only 1 in 50 stated that they planned to cut staff numbers. This is a marked improvement on recent years, indicating that the fortunes of Britain’s SMEs are on the upturn.
Another positive sign to emerge from the research was that predicted growth was not exclusively concentrated around London and the South-East. On the contrary, optimism was strongest in the North-East, where nearly two-thirds of SMEs reported that they planned to hire new staff in the coming twelve months. Following this, close to half of the SMEs in London, the Midlands and Scotland intended to increase their workforce.
The strongest industries in terms of confidence were the manufacturing and accounting industries, with over half of businesses in those sectors planning to add employees during 2014. However, business prospects remain uncertain for the UK’s wholesale and retail traders, with less than one in ten anticipating job growth.
In terms of size, it was small businesses with fewer than 50 employees that predicted most growth, with nearly two-thirds anticipating they would require more staff. This compared to just over one-third of medium-sized businesses – those companies who currently employ between 50 and 249 staff – who expressed such an outcome.
While the biggest hurdle for many of the UK’s SMEs remains access to funds vital for long-term growth, the Clydesdale Bank report will be seen as another strong indicator that Britain’s SMEs at last see some light at the end of the tunnel. While many fledgling businesses succumbed during the bleakest years following the financial crash, those that survived have learned to innovate and are now stronger as a result.