SMEs put hiring plans on hold, study finds
It found that in April this year, 94% were actively looking to grow their business, however current figures are now ‘significantly lower’ at 75%
SMEs are reportedly planning to put a stop on hiring plans because of the current level of economic uncertainty, according to the Association of Chartered Certified Accountants (ACCA) and The Corporate Finance Network’s (CFN) monthly SME Recover Tracker.
The tracker found just 12% of SMEs anticipate having more people on the payroll, a sharp decline compared with earlier this year in March (37%) and serves as a “strong signal” on investment.
Similarly, it revealed training programmes have also experienced a standstill, with almost half of businesses admitting to not finalising recruitment and training programmes for the next six months.
The tracker said this all points to the fact that attention has been diverted to “critical business specific issues” at a time of uncertainty as SMEs operate in crisis mode.
In addition, it found that in April this year, 94% were actively looking to grow their business, however current figures are now “significantly lower” at 75%. It comes as a further 7% of UK SMEs predict they will run out of cash in the next 12 months.
Glenn Collins, head of ACCA, said: “The decline in SME optimism has clearly had an impact on business investment. The stark recruitment figures demonstrate the stalling of investment in other lines of business and this is also filtering down to its people in terms of recruitment and development programmes.
“Businesses are having to deal with soaring costs as well as supply chain bottlenecks which are having a huge impact on how they conduct business in a timely manner – as well as their ability to make capital investments. Our businesses need some certainty in these uncertain times. Ultimately, employment, training and other investment tax reliefs and capital allowances should extend into the next parliamentary term.”
He added: “The next Chancellor needs to prioritise creating certainty to invest and extending investment opportunities; which will be crucial to economic recovery as well as sustained growth.”
