We should support Britain’s small businesses to create jobs
While this was music to many ears, the amount of people in the UK that are currently out of work remains alarmingly high, with long-term joblessness at its worst level for 16 years.
Young people are among those facing the toughest time in the job market. Youth unemployment alone remains above the one million mark, and as the government acknowledges, there is a risk of creating a lost generation unless this problem is tackled head on.
As far as I am concerned, the answer is staring us in the face. The UK has over 4.5m small businesses that form the backbone of the British economy. This is a group that could have a disproportionately large impact on Britain’s employment rate if they were encouraged and incentivised to take on new employees.
We recently polled 500 small businesses for our report – One Giant Leap:The Vital First Step To Becoming An Employer – and found that the vast majority (91 per cent) of sole traders would not consider taking on an employee in the next 12 months. Moreover, more than a quarter of respondents attributed this to the administrative burden of bureaucracy and paperwork (that weighs particularly heavily on small enterprises).
In Britain, we have a huge pool of bright, young, ambitious graduates, eager to work and start their careers, as well as skilled and enthusiastic trades-people who are on the lookout for jobs. Their unemployment equals lost potential. So, we must ask the question – why are small businesses so reluctant to taking the leap and recruit new talent?
We spoke to small business owners up and down the country who gave us valuable insight into their reluctance to hire.
Take Zoe Jackson, founder and managing director of performing arts company Living the Dream, who employs most of her staff on a freelance, project-by-project basis. She said: “I would love to be in a position to make some of these roles full-time but I am concerned about the ‘extras’ involved; maternity leave, redundancy payments and pension schemes, as well as the administrative complications of PAYE.”
Zoe’s response was typical of many small business owners. However, what is striking is that more than half of those we polled admitted that hiring another member of staff would help them to grow their business. So what can we doto help them take that step?
There is a perception among small firms that taking on staff is an unwanted administrative burden. Therefore, if we are to reduce the number of Britons unemployed, we need to break down the barriers that are preventing companies from expanding their workforce.
Sole traders that are concerned about the bureaucracy of employment could benefit from a number of simple measures, not least engaging with mentors to gain valuable advice and guidance on their business.
In addition, getting a better handle on financial management would give greater assurance to small business owners that they can financially afford to hire an additional employee. Finance is a crucial area in which many business owners feel a lack of confidence and some 65 per cent of small firms still rely on manual processes to manage their finances. With this in mind, there is no doubt that many small businesses could harness tools and software that greatly simplify administrative tasks such as payroll and VAT.
It’s vital that Britain’s small businesses create jobs as they expand, be it through new recruits, flexible staff or even apprentices. So let’s get behind them and offer support and encouragement so they can take the giant leap and go for growth.business, jobs, ONS statistics, small businesses, unemployment
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