SME employment growth 'three times faster than larger businesses' says Santander report
THE UK's small and medium-sized businesses have created three times more jobs over the past five years than larger businesses, according to new analysis of the latest ONS data commissioned by Santander Business Banking.
While firms employing more than 250 staff added around 650,000 net jobs over the five years from 2013 to 2017 (a four per cent increase), those employing less than 250 added 1.7 million (a 14 per cent increase), underscoring just how central SMEs are to the health of the UK economy and the country's current record high employment levels.
While larger businesses continue to employ more people in absolute terms – 16.47 million people versus 13.96 million for SMEs – Santander's analysis suggests SMEs will overtake larger businesses as primary employers by 2030 if the five-year growth trend continues at the same pace.
But separate research found that significant numbers of young people are failing to recognise the significant job opportunities that SMEs offer. Just a third (35 per cent) of Generation Z and Millennials leaving full time education say they wish to work for an SME, while an even smaller proportion, just one in six (18 per cent), want to work for a start-up or micro business.
In contrast, the most popular career aspirations are to work for a large firm (51 per cent), the public sector (51 per cent) or a global multinational (49 per cent).
This is despite nearly two thirds (64 per cent) 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.
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 life blood 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.”
Opportunities with SMEs are also growing fastest outside London. Between 2016 and 2017, the West Midlands and East of England saw the greatest increase in number of SMEs of any UK region.
In the East of England there were 8,400 new SMEs set up over the past 12 months while in the West Midlands, 6,900 new SMEs were founded over the same timeframe, equating to a 6.4 per cent increase in both cases.
A quarter of young people (24 per cent) said they plan to search for job roles in the capital, despite London being home to only 15 per cent of the UK's jobs4. Greater Manchester is second in popularity, with one in 12 (8 per cent) wishing to live there after leaving education, while Birmingham (7 per cent) completes the top three, even though they account for only 4 per cent and 2 per cent of the nation's jobs respectively.
The research by Santander Business Banking also found that the majority (70 per cent) of SMEs are actively recruiting for entry level roles, whether that be graduates (43 per cent), further education leavers (36 per cent) or school leavers (35 per cent).
To help connect graduates with SMEs, Santander runs a UK-wide internship programme (www.talent.santander.co.uk) which matches up SMEs with interns at one of its 84 partner universities.