More Small Businesses Laying Off Staff in Early 2012

FSB Voice of Small Business Report - Q4 2011More small businesses are planning to lay off staff in the first quarter of 2012 than take on new employees, according to research by the Federation of Small Businesses (FSB).

As official figures released this week revealed that unemployment had reached 2.64 million — the highest level since 1994 — the FSB’s quarterly Voice of Small Business Index has found that a net balance of 6.5 per cent of small firms intend to shed staff in the first three months of this year.

The survey of 1,674 firms also highlighted that small business confidence has dropped to its lowest level since early 2010, with 75 per cent reporting rising costs and falling revenues since the second quarter of 2010.

The FSB said that the Government needed to do more to incentivise small firms to recruit and make it easier for them to hold on to staff. For example, by making firms with fewer than ten employees permanently exempt from the planned extension to the right to request flexible working.

 “Most of our members won’t have an HR function — it’s the owner-manager that has to keep up to date with changes in the law,” said an FSB spokesman. “To get an exemption from certain parts of employment law would mean they can actually get on with growing their business.”

Jessica McDonald, marketing director for Birmingham-based dental equipment manufacturer Dearson Equine, said she had been finding it difficult to find staff with the right skills and Government should be offering more support to businesses taking on apprentices and training staff.

“We have two apprentices and would love to take on more. Employers themselves need to take on responsibility for training. But the Government needs to play a part in that by supporting ongoing skills development, which is very expensive,” she said.

A spokesman for the Department for Business, Innovation and Skills (BIS) said:

“Whenever we implement policies, we look at them from a small business point of view.”

“We’re not looking to burden businesses with new regulations that prevent them from taking on more staff. Through both the employment law review and Red Tape Challenge we want to make it easier for business to take on staff and give them the confidence to do so, without compromising fairness for employees.”

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