John Allan, national chairman of the FSB, said: “Compared with a year ago, small businesses are employing more staff and are looking to expand in the near future, and this points to growing confidence from the UK’s small businesses.”
With a broadly perceived upturn in the UK’s economy already apparent, Mr Allan added that a further catalyst for even more recruitment by the small business sector is likely to result from the cut of up to £2000 in the national insurance contributions for small firms that will come into effect from April 2014.
Indeed, according to FSB research, 29 per cent of small businesses will use this “employment allowance” to boost staff wages, 28 per cent will employ additional staff, and 24 per cent will invest it into resources.
That said, although small firms can create more jobs for the UK economy, they will nonetheless need greater support from government policymakers, said Mr Allan.
This is more important than ever considering that nearly 900,000 people have been unemployed for more than one year while 960,000 young people remain out of work. Furthermore, the FSB reported that the vast majority (88 per cent) of unemployed people who enter the workforce do so by starting a business or working for an SME.
The FSB found that 49 per cent of SMEs with employees on the national minimum wage have either increased wages in the last 12 months or are considering raising pay.
The FSB also found that 49 per cent of SMEs firms already pay all their staff at or above the living wage, and highlighted that, although the living wage is a positive aspirational goal, it should not be imposed on businesses, either through legislation or through other means such as public procurement contract terms that will only reduce competition and harm the smallest firms.
However, the situation for the UK’s independent financial advisers is not so straightforward, with the perennial challenge of finding the right combination of skills in a new hire at the right price.
Jonathan Fry, private wealth director for London-based Jonathan Fry & Co, said: “The problem for a long time has been to find someone who is good at facing clients, and has sufficient technical skills, and a substantial awareness of markets and the broader economy without having to pay investment banking salaries.”
Compounding the problem, he added, has been a cultural one in the UK that seemed to regard a career in the broader financial services sector as in some way a cut below working in a bulge-bracket investment bank, an ancient private bank, or a top asset management firm.
“These firms recruit what they consider to be the best, straight out of the top universities, partly due to their abilities, of course, but also because of the connections that they have made at school and/or university. And they pay them big to begin with, and keep paying the good ones even more,” Mr Fry concluded.