Government urged to help SMEs retain staff

SMEs retain staff


SMEs retain staff Small firms urgently need Government support to help them avoid redundancies, the Forum of Private Business (FPB) has warned.

The business group has called for the Government to switch its focus from encouraging firms to recruit staff to enabling them to keep hold of good employees.

Since the introduction of the Government’s golden hello scheme on 6th April, businesses that recruit and train applicants that have been out of work for six months or more will receive a payment of up to £2,500. But the FPB has warned this is not enough to help small firms.

“It is important to remember that recruitment is still taking place, and for these employers this scheme is very welcome, but most small businesses are concentrating on trying to keep hold of their skilled employees,” said the FPB’s chief executive, Phil Orford. “This should form the central pillar of the Government’s support strategy.”

Responding to the FPB’s criticism, a Department for Work and Pensions spokesman said:

“The issues of retaining employees and recruiting aren’t mutually exclusive. The Government’s policy for businesses is to encourage them to keep people in employment as well as encourage them to take on long-term job seekers.”

According to the FPB, if the Government modified the Working Tax Credit scheme to support shorter working hours, it would help businesses limit their redundancies.

“The administrative structures are already in place to modify the Working Tax Credits to allow for the retention of key and skilled staff on shorter working hours,” said Orford. “This process should be based upon the actual hours worked, with income validated by the employer, rather than the current scheme’s method of basing calculations on the previous year’s earnings.”


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