Is it time to generate growth in your small business?
We’ve been following the Office for National Statistics’ monthly vacancies survey recently and it’s been interesting to see how the overall number of vacancies in UK businesses keeps marking record highs. At 743k openings for the period January to March this year, it’s the highest since comparable records began.
It’s useful to account for jobs growth as well though, not just the vacancies: below you can see a normalised view of the vacancies: the number of openings for every 100 employee jobs. It’s encouraging to see this “real” measure climbing to new heights too.
The vacancies count is a useful indicator of business and economic growth, as vacancies are created when 1) demand from businesses (i.e. sales) increases and new employees are required to absorb the work, and 2) capital is available to pay those new employees. There will of course be a floating baseline of vacancies even when there isn’t excess growth or capital, due to ordinary movement of employees between companies. This means that it is the changes to the vacancies count that are most informative, particularly when they’re sustained over prolonged periods, such as has been the case over the past few years in the UK.
Now, let’s look at how small businesses are contributing to the current count. The blue line in the following graph shows the vacancy numbers for small businesses – those with fewer than 50 employees.
Small businesses had a great run from September 2013 to July 2014, creating an average of 6,800 vacancies per month, which was better than the average 6,300 per month created by medium and large businesses in the same period.
According to the most recent data available, as of the end of 2013 there were six vacancies for every 100 small businesses, versus 465 for every 100 medium or large business. How does the market feel in your local small business community?
Medium and large businesses are continuing to push ahead with their vacancy creation, just about maintaining their growth rate since July 2014. Small businesses are still creating vacancies but at a lower rate. If for nothing else but the sheer pleasure of competition, this is a great call for small business owners to push ahead with their growth and hiring plans!
References: data taken from the Office for National Statistics: http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/april-2015/statistical-bulletin.html#tab-14–Vacancies