Slims Consulting Publish Research into Job Losses in Small Businesses

Category : Contract
Date : 27/11/2009

Slims Consulting was commissioned by the Federation of Small Businesses (FSB) to carry out research to explore the key challenges facing small business during the recession.

The key findings from the research were:

• small and micro businesses play a vital role in the Scottish economy comprising 96% of all registered enterprises and 40% of all private sector employment.
• small and micro businesses have been the key driver of employment growth in the Scottish economy over the past decade, providing an additional 67,400 jobs for the Scottish economy.  This has more than offset the decline of 33,900 in the number of jobs in large businesses with 250 or more employees over the same period.
• despite the contribution of the small and micro business base to Scottish employment growth, it is currently not possible to accurately determine the extent of job losses in this section of the economy during the current recession.  This is due to a time lag in the official statistics and a lack of information collected at local authority level.

Slims Consulting carried out a series of consultations with small and micro businesses as part of this research.  The key findings from this were:

• small and micro businesses have faced challenges on several fronts including decreases in demand, increases in late payments and reduced access to affordable finance.  Combined, these factors had severely impaired the cash flow in the majority of business consulted.
• redundancies were found to be a measure of last resort in the majority of cases with actions such as short time working, business owners/directors reducing salaries and non-essential cost-cutting implemented by businesses before letting staff go.
• awareness of public sector support was found to be very low amongst the businesses consulted.  Limited assistance was provided in the lead up to and during the redundancy situations and none of the businesses, or their employees, had any contact with PACE during the redundancy process.

Based on the evidence gathered, Slims Consulting offered four broad recommendations:

1.  Local labour market intelligence on job losses in small and micro businesses must be improved.

2.  Public sector agencies must have a greater focus on delivering early interventions to small and micro businesses.

3.  Business support services currently available to small and micro businesses should be reviewed.

4.  Awareness of the range of support available to small and micro businesses should be improved.

The full report can be downloaded from the FSB website by following the link below.   There is also a link to some press coverage of the report.

FSB_Website

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