UK SMEs grow apace 'but fail to appeal to young'

Small and medium enterprises in the UK have created three times more jobs over the past five years than larger businesses, according to an analysis of government statistics.

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The analysis by Santander Business Banking of data from the Office for National Statistics showed that while firms employing more than 250 people added about 650,000 net jobs from 2013-17, those employing less than 250 added 1.7 million.Santander said the results "underscored just how central SMEs are to the health of the UK economy and the country’s current record high employment levels."

Santander analysis found that the SME workforce could overtake larger businesses by 2030

The analysis found that while larger businesses currently employ 16.47 million people while the SME workforce stands at 13.96, the current trend suggests the latter's workforce could overtake the former's by 2030.

Just 18% of young people expressed a willingness to work for a start-up or micro business

However, separate research commissioned by Santander found that significant numbers of young people did not recognise the career opportunities that SMEs offered with just 35 per cent of Generation Z and Millennials leaving full time education saying they wanted to work for an SME. And just 18 per cent expressed a willingness to work for a start-up or micro business, while about a half aspired to work for a large firm, including global multinationals, or the public sector."This is despite nearly two-thirds of Generation Z and Millennials - equal to around five million young adults in the UK – saying they are concerned about their career opportunities on leaving full-time education, suggesting that many are potentially discounting the role that SMEs play in the economy," said Santander.

Opportunities with SMEs growing fastest outside London

The analysis also found that opportunities with SMEs were growing fastest outside London with the West Midlands and East of England emerging as the regions with the greatest increase in numbers of SMEs in 2016-17.Even so, 24 per cent of young people surveyed said they wanted to work in London, even though the capital hosted only 15 per cent of UK jobs. Greater Manchester and Birmingham were the second and third most popular work destinations.Sue Douthwaite, managing director of Santander Business, said, “While there are many great roles available working for large companies across the UK, SMEs remain the lifeblood of the UK economy."There is strong demand from SMEs for staff and we would encourage people to look at the fantastic career opportunities that may be open to them outside of larger firms. As a bank focused on bringing much-needed competition to SME banking, we are supporting thriving SMEs every day who are hiring for brilliant roles across all regions of the UK.”

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However, coinciding with the Santander report was publication of a survey by Hitachi Capital Business Finance showing that the proportion of recently-former SMEs predicting growth had hit its lowest level for two years.While 54 per cent of SMEs formed in the past five years were confident of growth in the November 2016 survey, just 40 per cent felt the same this November.

Gavin Wraith-Carter, Hitachi Capital Business Finance: 'business age is now showing itself to be a very significant factor."

Gavin Wraith-Carter, managing director of Hitachi Capital Business Finance commented, “The final charge into Christmas is important for many small businesses. For those in retail and leisure, it’s a key for sales and in other sectors it’s a time to plan for the New Year."During the course of the last 18 months, smaller companies in general have been resilient and relatively calm in the face of unprecedented economic and political upheaval."What we have discovered with our latest research is an emerging new trend. Having looked in detail at community by sector and geography, business age is now showing itself to be a very significant factor."The very old and very young are struggling a lot more. The older ones may be more resistant to change, in a year when GDPR was voted one of the biggest headaches for the sector. For young businesses that are building up their experience and credit history, some feel less confident about coping with uncertainty and change."Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online DirectorySubscribe to Relocate Extra, our monthly newsletter, to get all of the international assignments and global mobility news.

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