Fewer Small Businesses Planning to Recruit

Cost, red tape and poor skills among recent recruits are putting small firms off taking on fresh faces, according to research by the Forum of Private Business (FPB).

In the three months to March 2011, the number of small businesses planning to recruit in 2011 fell from 30 to just 22%, the FPB’s quarterly Referendum (PDF) survey found.

The major barriers to recruitment were found to be new staff unable to fit in (37 %), complying with employment legislation (36%), low skills among recent recruits (36%) and an unwillingness to learn (31 per cent). Almost one in four businesses of the 5,000 firms surveyed blamed the tax system for making employing people unaffordable.

“It’s concerning that small-business owners’ confidence in their ability to create jobs in the current economic climate and recovery is falling.”

said the FPB’s research manager, Tom Parry.

“Clearly there is still a pressing need to address barriers such as employment taxes and red tape, steep recruitment costs and skills issues.”

Parry said the government should do more to make it easier for smaller businesses to recruit.

“Policies such as the abolition of the default retirement age are unhelpful at a time when we should be incentivising business growth and job creation.”

Isa Maria Seminega, owner of Croydon-based Noisette Marketing, said she had considered taking on her first employee in January, but had been put off by the complexity and the time it would take to look after an employee.

“It’s too much. I’m working from home, I look after two children and I’m a small company, but there’s such a lot of legislation.”

“It wasn’t a money problem – it was more the amount of time I would have to spend doing payroll and all the checks.”

Seminega employed freelance contractors instead, but finds them a drawback.

“They do other work and you can’t always rely on them. I’m going to get to the point where I’m going to have to take someone on full-time, but I don’t know how I will do it.”

The FPB survey also revealed that one in five business-owners felt the government should make regulations “fairer” to give small businesses more control over recruitment.

Fewer Small Firms are Planning to Recruit

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