Mid-sized businesses driving job creation

Jo Faragher

Source: Barclays

Medium-sized businesses are leading the charge in terms of job creation, according to a survey of more than 700 businesses by Barclays.

The Barclays Job Creation Index found that 71% of mid-sized businesses (with a turnover of between £5m and £100m) are creating new roles this year, up from 65% of mid-sized businesses in 2012.

Small businesses were the least likely to create jobs this year, with 48% of companies with a turnover of up to £5m stating they would be adding new jobs. Slightly fewer large businesses (between £100m and £500m) are planning to create jobs, at 65% compared with 72% last year.

The overall news was positive, with 56% of companies planning to create new jobs in 2013. At the same time, 79% of all businesses have no plans to cut headcount within the next 12 months.

However, one of the key findings of Barclays’ survey was that the majority of businesses are reluctant to take on ex-public sector workers. Fifty-seven per cent of respondents said this was the case. David Roust, head of Barclays’ recruitment industry team, said that this would leave many public sector workers – who have been hit harder by job cuts over the past two or three years – in a “challenging position”.

Commenting on the overall findings, he said: “Mid-sized businesses have continued to weather the economic storm, and still have room to grow, which explains their willingness to hire. Comparatively, the UK’s largest companies might not have reduced headcount in recent years in the expectation that the economic conditions would improve. As their people are often multi-skilled they can be moved to other areas within the business, so there’s less of a need to create new jobs.”

Another positive indicator was that more than a quarter (26%) said that the recent reduction in National Insurance, meaning the first £2,000 of employers’ contributions are waived, would have a major impact on the job market.