Recruitment bosses' retirement hopes continue to fade

Retirement has become more elusive than ever for recruitment business owners as the UK struggles to emerge from recession, according to new research.

They are also overwhelmingly dismissive of Government attempts to stimulate bank lending to businesses through the Enterprise Finance Guarantee.

The survey from Clifton Asset Management, which provides specialist financial and strategic advice to SMEs, shows that 83 per cent of business owners feel their retirement is further away now than it was a year ago. This compares with 79 per cent in the previous quarterís survey, and 59 per cent 12 months ago.

ìDespite recent speculation about ëgreen shootsí, we are still deep in the worst recession in living memory and it is no surprise to see this fact reflected in the way small business owners see their future prospects,î said Neil Greenaway, managing director of Clifton Asset Management.

More than a third – 34 per cent - of companies in the survey said they had been forced to shed jobs over the past six months, with 10 per cent saying they may be forced to reduce their payroll even further. A small number – 3 per cent – say they have not yet had to shed jobs but anticipate having to do so in the coming months.

ìThese figures give some cause for optimism that the worst may be over but they should be treated with caution,î said Mr Greenaway. ìFor example, the number of those who say they have not had to reduce staff numbers in order to survive, and furthermore do not anticipate having to do so, continues to fall each quarter, and is below 50 per cent in our latest survey.

ìLikewise only a quarter of small businesses who took part in our survey are now operating a company pension scheme, and of those, a little over half are continuing to make regular contributions. This speaks volumes about our current financial plight and the degree of apprehension most business owners have about the future.î

Meanwhile according to the CAM research, there is still very little enthusiasm for the Governmentís flagship scheme to support small businesses through the downturn, the Enterprise Finance Guarantee.

While the number of business owners who are aware of the EFG has risen to 68 per cent, a massive 93 per cent see no benefit in making an application under the scheme. Across the UK just 2 per cent of SMEs say they have successfully managed to access funding through the scheme.

Neil Greenaway commented: ìWe learned recently from the Governmentís own figures, that the amount of money in the form of loan guarantees which got through to businesses over the financial year just gone, had actually fallen on the previous year and was well short of the 1.3 billion budget which had been set.

ìOnce again our survey backs up the huge store of anecdotal evidence we have received from business owners who again and again report that it remains near-impossible for them to access finance from the banks. Likewise, only a quarter of those questioned in our survey say that that the Government fully appreciates the crucial role of owner-managed businesses in the UK economy – although this figure stood a just 4 per cent a year ago.

ìSince we launched our survey there has been a steady increase in the number of business owners who are telling us that their retirement has moved further away.

ìWhile it is encouraging that nationally, a quarter of companies believe the worst of the recession may be over, our research continues to highlight the desperate situation for many in regard to pension schemes, and a complete lack of confidence in the Governmentís attempts to support their sector. Both of these factors need to be properly addressed before the UKís SMEs can feel fully confident about the future.î