UK recession official as small firms confront employment issues

As the ‘R’ word becomes statistically official, some small businesses are already looking to the future when it comes to employment opportunities.

By News Desk
23rd January 2009 at 13:42

small businesses concerned about redundanciesTwo quarters of negative growth with Gross Domestic Product (GDP) falling by 1.5% and the UK economy is officially in recession according to data from the Office of National Statistics released today.

Dr John Philpott, chief economist at the Chartered Institute of Personnel and Development said:

It is now a dead cert that unemployment will rise above 3 million before the current crisis is over.

And for many small businesses employment issues now seem to be top of mind.

The Federation of Small Businesses saw a 214% increase in the number of enquiries to its employment support hotline during the last quarter of 2008.

As a result the organisation which represents over 200,000 SMEs around the UK, is calling on the government to support small firms and encourage employment.  The FSB has come up with a five point plan to address the issue which focuses on:

  1. simplifying legislation;
  2. cutting payroll taxes;
  3. promoting part-time work;
  4. providing more opportunities for small businesses to bid for public contracts;
  5. and investing in training apprentices as solutions to rising unemployment

Meanwhile the Forum of Private Business (FPB) earlier this week highlighted that 61% of its members found employment law a significant barrier to growth.

Legislation needs to be confronted to make it easier for small businesses to retain staff in these difficult times and start recruiting once a recovery shows signs of appearing.

FPB ceo Phil Orford pointed out that SMEs:

… require a long-term plan to address all of the difficulties small businesses face in relation to employment, including a significant reduction in employment regulations. Removing this stranglehold must be a central component of the Government’s economic recovery strategy.

[Picture credit: Magnus D licenced from Flickr]

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