The latest employment statistics, released by the ONS last week, showed a 0.1% decrease in the unemployment rate.

In the quarter ending February 2012, 2.65 million people were without a job in the UK, a quarter-on-quarter drop of 35,000. Despite this, there were around 170,000 more people without a job than there were at the corresponding time last year, an ONS spokesman said.

It is thought that the increase can in some ways be attributed to a rise in the number of people accepting part-time rather than full-time positions.

The latest report also showed that base salaries rose by 1.6% in the 12-month period, but bonus awards in the first two months of this year were lower than they were in January and February last year.

The FPB believes that the employment rate would rise further if the government stuck to its promise of cutting red tape for small business owners. Phil McCabe, the Forum’s senior policy adviser, said the coalition needs to reduce bureaucracy and improve the tax system if Britain’s small businesses are to stimulate the jobs market.

David Cameron is relying on small businesses to drive economic growth but they need incentives, he added. The FPB has repeatedly asked the government to extend the National insurance Holiday to all firms and not just those in specific areas of the country. Furthermore, Mr McCabe would like employment law simplified so that employers have more control when it comes to staffing decisions.

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Contractors may be interested to learn that the latest Employment Outlook Survey from Manpower predicts that hiring will increase slightly in Q2. The survey reveals that the seasonally adjusted net outlook for employment is +2%.

The banking, finance and business services sector is the most buoyant with a reading of +16%. The manufacturing sector has positive hiring intentions as do employers in mining, transport and utilities. Employers in the South East, South West and the East of England are most likely to hire in Q2, whilst those in Northern Ireland, Scotland and the West Midlands could be making redundancies rather than hiring.

Globally, the recruitment market seems to be recovering well. Antal recently conducted a Global Snapshot survey in 47 countries. The results show that just 16% of companies intend to shed staff in the next 6 months compared to the 23% that were when the survey was conducted last September.

66% of UK companies said they planned to increase hiring putting us second in the list behind Luxembourg where 86% of organisations intend to recruit additional employees.

Meanwhile, the REC/KPMG monthly Report on Jobs shows increases in both temporary staff billings and permanent placements in February. Temporary billings recorded their greatest increase for nearly four years.

Kevin Green from the REC pointed out that private sector hire is increasing while the public sector is making redundancies. Vacancies in the IT and computing sector have been accelerating whilst those in nursing and care sectors have declined significantly.

The REC expects to see unemployment figures continue to rise until the end of autumn before staring a very slow decline into 2012. He also stressed that more than 20% of young people are in neither work nor education at the moment, a situation which needs to be addressed in the forthcoming Budget. Green would like to see the government introduce a National Insurance holiday, lasting at least 12 months, for every young person taken on by an SME.

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Nearly 150,000 small businesses in the UK, including many umbrella company workers and limited company contractors, are facing fears that they may become insolvent if they cannot maintain their contracts with the public sector.

According to recent research conducted by insolvency experts R3, this reflects an overarching trend wherein one out of three small businesses feel they rely on public sector contracts in order to remain viable in their chosen markets. As last year’s business failure figures were approximately 26,000 for the entire year, the number of businesses skirting insolvency this year is dramatically higher.

Steven Law, president of R3, commented on the trade organisation’s findings by saying that while the likelihood of all 150,000 businesses losing their public sector contracts is quite low, the UK’s large number of small businesses who rely on contracts with the public sector, which have been de rigueur since the 1990’s, any cuts at all from the public sector will be quite keenly felt.

Mr Law concluded by saying that British businesses had an obligation to not only keep this risk in mind but also to seek out professional business advice well before any crises arise due to their public sector contracts drying up.

In related news,the Coalition government’s new National Insurance Contributions holiday, which was instituted in order to drive the growth of new business, is considered to be unlikely in regards to compensation for heavy public sector losses, says IntaPeople.

The Engineering, IT, and Legal recruitment specialist warned of such an event after the new holiday was introduced this past week.

The new scheme offers up to £5,000 to new businesses for taking on up to ten new employees during the first year of its operation under the scheme, which is geared towards business growth outside of the City, the South-East, and the South.

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