SME recruitment outstrips large organisations

Recruitment growth highest - and redundancies lowest - in two years

Recruitment demand in SMEs has reached a two-year high, and is nearly 10 percentage points above demand in large organisations, according to UK-wide research from nearly 1,500 organisations by recruitment company Reed,
published today (Monday 26 July 2004).



Nine out of ten Small and Medium sized Enterprises (SMEs) plan to recruit staff over the next quarter , compared to 81 per cent of large organisations. The research shows demand for new staff in SMEs is accelerating at its fastest rate and has reached its highest level in two
years.

At the same time redundancies in SMEs are half the level in large organisations, and have reached a two-year low. Only five per cent of SMEs plan to downsize over the next Quarter, compared to one in ten large organisations.



While the new Reed Recruitment Index reveals that SMEs are most optimistic about opportunities to grow, this success could bring its own problems.
Nearly half of all SMEs are now finding skills shortages when they recruit, raising the risk of wage inflation if this trend continues.



SMEs also need to work harder than large organsations in order to attract the best people as the job marketplace becomes increasingly competitive.
While the corporate Internet sites of large organisations can help attract the candidates they require, by definition most SMEs do not have the high brand profile needed to make this recruitment route effective.

James Reed, CEO of recruitment company Reed, comments:
SMEs are leading UK recruitment demand, reinforcing their reputation as the engine of growth within the UK economy.
While large organisations continue to restructure and Public Sector recruitment demand is slowing, SMEs are moving quickly to meet economic opportunities and are recruiting at record levels.


Although this trend is good news for job-seekers, if it continues it will raise concerns about salary inflation.

Commenting on the research Stephen Alambritis of the Federation of Small Businesses said This confirms that small firms are growing. Earlier this year 43% of our own members reported an increase in employment compared with two years ago.Only 16% experienced a drop in job numbers. Small firms are innovative and flexible and are set to continue to be the Uk’s job creation champions.