Employment growth at the UK’s small and medium-sized enterprises (SMEs) is rising at a significantly faster rate than that of larger firms, according to new research.
The report, published today by Santander Business Banking, indicates that SMEs have created more than two and a half times as many jobs over the past five years, indicating the importance of the opportunities they offer.
Companies employing more than 250 staff added around 650,000 net jobs over the five years from 2013 to 2017, representing a 4 per cent increase, while enterprises with fewer than 250 employees have added 1.7 million, a rise of 14 per cent.
The bank said the results, composed from analysis of data from the Office for National Statistics, highlight “just how central SMEs are to the health of the UK economy and the country’s current record high employment levels”.
Although larger businesses continue to employ higher numbers of people in absolute terms, with a total of 16.47 million staff versus 13.96 million for smaller firms, SMEs are set to overtake larger businesses as primary employers by 2030 if the five-year trend of job creation continues to grow at its current pace, according to Santander.
However, separate research commissioned by the bank has found that significant numbers of young people are failing to recognise the job opportunities that SMEs offer.
The bank reported that just one-third of 16 to 25-year-olds leaving full-time education said they wished to work for an SME, while around one in six wanted to work for a start-up or micro-business.
In contrast, the most popular career aspirations were 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 the age group, equal to around five million young adults in the UK, expressing concern about their career opportunities on leaving full time education.
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. We are supporting thriving SMEs every day who are hiring for brilliant roles across all regions of the UK.”