The latest CIPD/SuccessFactors Labour Market Outlook (LMO) survey has led industry experts to predict that small to medium size businesses will see a greater rate of employment in 2014 than large firms. This means that demand for highly skilled umbrella companies could be set to spike.
The Labour Market Outlook Survey is a quarterly report CIPD; a professional body for those who are a part of the HR industry, conduct with SuccessFactors; a business solutions company. It measures existing labour and employment trends throughout the country by surveying 935 HR professionals and predicts what direction they could take.
The LMO survey used the ‘net employment balance’ measure to come to this conclusion. This is like an equation; the number of businesses planning to hire new staff minus those planning to lay off staff. Using this system the survey resoundingly concluded that small to medium sized businesses overall have more intention to hire than large firms throughout the current year. On the scale the former scored +40, the latter +5.
Furthermore over three quarters of those surveyed indicated that whilst hiring is set to continue to soar as 2014 progresses, it may be at a slower pace than last year. Specifically the net employment balance for the final quarter of last year on average fell from +24 to +16. Delving into specific industries data given on hiring by those in the manufacturing and production sectors was stronger (+34) than data provided by those in the service sector (+24).
The CIPD’s labour market adviser, Gerwyn Davies commented on the finding that low pay awards has led to weak productivity which has led to low wage increases, stifling new employment. Davies said that real wage increases “can only be delivered if organisations can boost productivity, for example through smart investment in the training, development and management of their staff”.
Davies soon went on to note that small to medium sized firms are the exception to the rule. According to Davies their growth is rapid, and increasingly they will need to be “equipped to hire the right people and to rise to the management challenges associated with growth”.
The limited scope of small to medium sized businesses means that often the most efficient path for them to take is to hire freelancers and temporary/contract workers. Considering the quality of skilled worker in these categories that are attracted by the services of umbrella companies, it looks like as small firms set to grow, they will turn increasingly to umbrella company workers to refresh their rosters.
At Paymatters we’ve seen how contract/temporary and freelance workers benefit from the wide array of financial services offered by umbrella companies, which in turn makes them attractive prospects to businesses up and down the country. That looks set to continue in 2014.