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12 March 2012

Small firms ready to employ again as confidence picks up

Reference number: PR 2012 13

FSB News Release
PR 2012 13
Issue date: Monday 12 March 2012
Small firms ready to employ again as confidence picks up
Small businesses are looking to employ in the coming months as small business confidence picks up after a quarter of shedding staff, new figures from the Federation of Small Businesses (FSB) show.
Figures from the FSB''s ‘Voice of Small Business'' Index shows a net balance of 8.1 per cent of small firms laid off staff in the three months to February – the highest figure since the survey began, in some cases partly due to rises in wages rises eating into 28.2 per cent of firms margins.
However, as small business confidence improved, many firms anticipate a slight increase in sales in the coming months. And nearly a third (27.4%) of small firms want to increase their investment plans which will also help to create new jobs – a net balance of 1.2 per cent of small firms is looking to take on new workers in the next three months, the highest level since Q2 2010.
Though hiring intentions among small firms may be picking up, unemployment is still set to rise this week – especially youth and female unemployment. The FSB is calling on the Government to help small firms take on staff in the Budget later this month to help stem rising unemployment by putting measures in place, such as:
  • Increasing the National Minimum Wage for apprentices to £123 per week – eight in 10 small firms have said they would support a rise in apprenticeship wages
  • Ensuring Work Trials are made available to all suitable candidates on demand with no complicated qualifying criteria
  • Introducing fees for the majority of claimants at employment tribunals to reduce the number of serial claimants and speculative claims, or those which have little foundation
  • Encouraging small businesses to offer jobs they place with Jobcentre Plus as a Work Trial opportunity
  • Using extra finance, through increased revenues or through additional public sector consolidation, to incentivise job creation by a reduction in employers'' National Insurance Contributions, targeted at young people to make them more attractive to employers
  • Paying full Jobseekers Allowance equivalent to those people that want to set up a business under the New Enterprise Allowance Scheme for one year and combine it with a guaranteed loan of up to £2,000. Also, ensure access to the scheme is available to potential applicants immediately, instead of waiting six months before they are eligible to encourage more people to become Real-Life Entrepreneurs 


John Walker, National Chairman, Federation of Small Businesses, said:
"Small firms have been resilient in difficult economic times and after a period of reducing staff levels, it is good news that the outlook is improving and that for the first time since 2010, they are looking to take on staff.
"In the Budget, the Chancellor has an opportunity to build on and instil this emerging optimism by helping to create jobs and help those that want to, go it alone. For example, he can bring forward reforms to employment tribunals, including fees to discourage vexatious claims. Work Trials should be made available to all suitable candidates on demand, with no complicated qualifying criteria.  And extending the New Enterprise Allowance would encourage more people to set up in business and in turn, help grow the economy. It is simple measures like this that will make a huge difference."
Notes to Editors
1. The FSB is the UK''s leading business organisation with around 200,000 members. It exists to protect and promote the interests of the UK''s Real-Life Entrepreneurs who run their own business. More information is available at
2. The FSB ‘Voice of Small Business'' Index is a quarterly macro-economic report analysing the trends of small businesses in the UK market. To view the ‘FSB Voice of Small Business'' Index please go to 
3. This report has been produced by the centre for economic and business research (cebr). The figures are based on a survey carried out by Research by Design between 1-14 February 2012 and received 3,125 responses. To find out more visit
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