17 per cent of Small Businesses to Recruit in 2011

Fewer than a fifth of small businesses plan to recruit next year, a survey from insurance firm QBE has found.

The survey of 400 small-business owners found that only 17% intend to recruit in 2011.

“There are clearly risks to the recovery in the lack of new recruitment that is expected in 2011,”

said QBE European Operations managing director of distribution, Terry Whittaker.

“Businesses are expecting a longer wait before recovery.”

Chartered Institute of Personnel and Development (CIPD) chief economic adviser, Dr John Philpott, said that economic uncertainty is making many small firms reluctant to recruit.

“I’m not greatly surprised by the number of small firms that are making plans to recruit, as the sector is still very much in difficulty.”

The Office for Budget Responsibility’s (OBR) recent report, Economic and fiscal outlook (PDF), on the fiscal outlook showed that unemployment will peak at just over 8% next year, before falling to 6% in 2015. According to the report, unemployment in the third quarter of 2010 stood at 7.7%.

Philpott said that the OBR forecast for 8.1 % unemployment was “optimistic”.

“However, the report shows they are expecting a period of weakness in the early part of next year, before the jobs market picks up at the end of 2011 and beyond. So their forecast isn’t necessarily inconsistent with the fact that small employers are not planning to recruit in the short-term.”

“If the slowdown in the economy is only as modest as the OBR is expecting, businesses will be in a better position to recruit next year. But it’s more likely to be sharper and in that case employment will be weaker than the OBR expects, too.”

For further information read our business advice articles on recruiting & interviewing, recruiting & employing disabled staff and recruiting from communities.

17 per cent of Small Businesses to Recruit in 2011

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