Contractors working in HR and IT could see a growth in opportunities this year.

Adecco recently said that we can expect to see gradual jobs growth this year, led by the HR and IT sectors. The Olympics will also provide a welcome boost to the market.

The recruiter’s Job Watch survey showed that hiring slowed down considerably towards the end of last year. Despite the festive season, temporary recruitment in the retail sector actually declined, but permanent hiring increased. The survey also showed that the HR and IT sectors demonstrated tentative growth in the last couple of months of 2011.

Adecco’s MD, Steven Kirkpatrick, said jobs still exist and jobseekers shouldn’t give up. It is important for them to boost their chances by considering all the options, successfully marketing their skills and searching for opportunities.

The Olympic and Paralympic Games will create ten of thousands of opportunities, which will give jobseekers the opportunity to apply for a position outwith their usual sector and help them gain new skills and valuable experience.

SMEs also need to ready themselves for the possible disruption caused by the Games. BT recently surveyed 600 SMEs and discovered that 30% have not yet thought about disruption to the supply chain process during the Games, nor have they considered staffing levels.

Even SMEs who are not directly affected could have customers or suppliers in London who will be impacted by the Games. Furthermore, more than 33% of businesses think they might have staffing problems when employees are either unable to get to work, or want time off during the Olympics.

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Umbrella company contractors are more likely to find opportunities with small businesses, according to the results of a recent survey.

The European Commission published the results of its survey on the 16^th January this year and they make interesting reading. Not only do SMEs provide better quality jobs prospects than their larger counterparts, they provide employment for more than 67% of the UK’s workforce and are responsible for 85% of new jobs.

SMEs are an essential cog in the economic recovery and they go some way towards negating the affect the recession had on employment. The report goes on to say that in order to draw an effective policy after the crisis, there needs to be expert analysis of how new small business job creation was affected by the recession, as well as analysing the quality of current jobs.

Limited company contractors could find lucrative opportunities in the SME market. They could find better quality jobs with a higher rank than would be available in larger organisations. Small businesses could also reap the benefits of turning to highly skilled contractors who are available to slot into a role at a moment’s notice.

Conditions do look favourable for contractors this year. New business opportunities are starting to appear but a lot of employers still have concerns about the UK’s economic future. They are reluctant to commit to hiring permanent members of staff until conditions improve, so instead they will need to rely on the UK’s flexible workforce.

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Last year, the UK’s five largest banks agreed to lend £190 billion to UK businesses in 2011. By the end of the third quarter, they had lent £157.6 billion, which put them ahead of the target. However, only £56.1 billion of that was made available to SMEs, slightly below the small business lending target.

A British Bankers Association spokesman recently said that the Project Merlin banks are on course to meet their lending targets and their performance over the first three quarters shows that they are committed to helping businesses grow despite weak demand and the challenging economic environment.

On the other hand, FSB spokesman Andrew Cave, says lending conditions for small businesses have deteriorated since Project Merlin commenced. Lending has actually decreased whilst the cost of borrowing has gone up, he explained.

Chris Leslie, the shadow Treasury Minister, also pointed out that Project Merlin does not lay down conditions regarding the cost of small business loans. It’s fine to say the banks are offering loans, but not if they are so expensive companies cannot afford to take advantage of them.

In order to meet the small business lending target, the Project Merlin banks should have lent 19.9 billion to SMEs in the final quarter of last year. The Bank of England will be publishing figures later this month that will confirm whether or not this actually happened.

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The eyes of the world will be on the UK this year and PAYE umbrella company contractors have a role to play in promoting the contribution small businesses make to the country’s economy.

2012 sees the Queen’s Diamond Jubilee, the Olympics and the Paralympic Games. All of these events are likely to draw visitors to the UK from every corner of the globe and provide a welcome boost to the UK economy.

The Forum of Private Business has now launched the Get Britain Trading campaign, which aims to encourage the Government to help small businesses trade on a local and global basis.

The FPB’s Get Britain Trading manifesto focuses on four keys areas, simple and proportionate tax, improving cash flow, creating opportunities for growth and creating jobs and improving skills.

David Cameron frequently says that small businesses will drive the private sector recovery, but they need the right trading conditions if they are to expand and create much needed jobs. One of the best ways to achieve this, according to the FPB, it to reduce the amount of bureaucracy small firms have to deal with. More than 50% of SMEs believe their business would develop if they had less red tape to contend with.

Simplifying employment law would encourage small businesses to take on additional staff and help absorb public sector redundancies. But the UK also needs to plug the ever widening skills gap and the Get Britain Trading campaign is calling for a review of the education system so that young people are work ready when they leave school or university.

Contractors can pledge their support for the campaign by signing up on the Get Britain Trading website.

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There are concerns that small businesses will adopt a ‘hire and fire’ culture if proposed reforms to employment laws go ahead.

More than 75% of employment lawyers think that small businesses will hire and fire, according to research by Contact Law, the find-a-solicitor service. 67% of the employment lawyers questioned for the survey said the new proposals were not workable and only 8% were in favour of the whole raft of changes.

The government proposes to overhaul the employment tribunal system in the hope of saving employers £40 million every year. It has also called for evidence on whether businesses are restricted by the minimum consultation period, currently 90 days, for collective redundancies.

73% of those surveyed said the reforms will not encourage SMEs to hire more staff, and 63% believe the changes would have no affect on the way small firms treat their employees.

About 33% of respondents think small businesses will lose out on talent if the reforms go ahead because jobseekers will be concerned over job security.

Therese Wallin, a legal expert at Contact Law, said the business secretary’s proposed reforms are causing a lot of debate in legal circles. The industry is backing some of his proposals, but others are not so popular.

Vince Cable has said the changes would not lead to a hire and fire culture, but the majority of lawyers disagree. Rather than helping the small business community, these reforms could adversely affect it and it’s hard to see how they can be implemented without facing a lot of resistance, she added.

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Umbrella company contractors with international skills could find themselves in demand after Vince Cable said people with such skills were in short supply.

During a speech to the British Council, the business minister pointed out that companies need staff with cultural awareness, linguistic abilities and overseas experience if the UK is to achieve sustainable economic growth. In order to ensure this, the workforce in the UK must understand that globalisation is important to their careers and that without these skills we will be less likely to be a competitive force on the international stage.

Cable went on to say that at the moment the UK firms are not well enough equipped to conduct international business at the required level. We currently have a situation where companies that trade with other cultures are having difficulties recruiting staff.

He urged British businesses to make sure they have the staff with the skills necessary to conduct business overseas, export goods and services and attract inward investment.

Not only do we not have people with the right skills to do business overseas, it also transpires that British SMEs lag behind their European counterparts when it comes to e-commerce.

Research from the Epson Business council has discovered that just 59% of small firms in the UK think e-commerce provides them with a business opportunity. Across Europe as a whole, the figure is 72%. One in three SMEs in the UK think e-commerce channels threaten their business and although 78% do sell their products or services over the Internet, countries such as Italy have a much larger e-commerce presence.

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The Forum of Private Business is warning companies that they could alienate their workers, including umbrella contractors, if they scrap this year’s office Christmas party.

It is thought that at least 50% of small firms will cancel the annual festive party this year, but according to the FPB this could cause demotivate staff and leave them unwilling to go the extra mile for the business in the future.

Many SMEs are finding that cash is in short supply, but festive frolics don’t need to be expensive and the benefits of providing an annual get-together should not be underestimated, said FPB chief executive, Phil Orford. As well as motivating staff, these events encourage communication and reward employees when pay increases and bonuses are not a feasible option.

The FPB suggests that companies not providing a party should come up with other morale boosting ideas such as obtaining discount vouchers for meals and putting elaborate decorations up in the office. Demonstrating that you recognise the hard work done by your employees can mean more to them than a gift or financial bonus, the FPB added.

In addition to abandoning the traditional Christmas party, several SMEs intend to shut down for less time than they usually would over the festive period.

A survey conducted by Close Invoice Finance discovered that 36% of SMEs will be open for two days longer than in previous years and another 22% will cut the usual holiday by three days. Nearly half of the surveyed businesses said they were worried that staff would take sick days leading up to Christmas and many have reminded employees that they will face disciplinary action if they take unauthorised absence.

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Despite all the publicity surrounding Project Merlin, umbrella company contractors might be surprised to learn that a large proportion of businesses in the UK are unaware of its existence.

Project Merlin was devised at the beginning of this year to encourage the major banks to lend more money to companies in the UK, especially small businesses.

Barclays, HSBC, Lloyds Banking Group and the Royal Bank of Scotland all signed up to the deal, whilst Santander also agreed to increase its business lending. The Project Merlin banks promised to lend a total of £190 billion to UK companies this year, £76 billion of which would go to smaller firms.

However, lending to smaller firms actually decreased from £20.5 billion to just £18.8 billion between the second and third quarters of this year.

Travelex has recently published its latest Confidence Index showing that 62% of firms do not know about Project Merlin. The Index also showed that only about 40% of the UK’s smaller companies are confident in the current economic climate.

Paddy Earnshaw, the customer director from Travelex Global Business Payments, said that knowing how to access credit could spell the difference between success and failure for small enterprises and it is extremely concerning that almost two-thirds of smaller businesses are not aware of Project Merlin.

The Chancellor did spell out measures in his Autumn Statement to make more financial help available to SMEs, but maybe the Government should take heed of the results of Travelex’s research and do more to publicise the help that is available.

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A new survey by international office space supplier, Regus, suggests that the UK’s SMEs are turning to contractors to help them through the uncertain economic times.

49% of SMEs that trade internationally say they intend to hire freelancers and 39% plan to hire people who will work remotely.

The research also discovered that overall business confidence has dropped by 20% since April. However, SMEs that trade overseas displayed 88% business confidence, compared to domestic firms who are only 79% confident.

Celia Donne, the regional director of Regus, said SMEs know they have to continue their investment in growth, and are turning to freelancers and remote workers as a way to boost their headcounts. 27% of employed people in the UK are now classed as flexible workers, demonstrating that the employment market has undergone a significant shift in recent years.

Another survey, this time from Simply Business, found that 27% of small firms intend to increase their headcount over the coming 12 months. Whilst this sounds like good news, the downside is that nearly three-quarters of SMEs are not intending to hire new staff next year, and in fact they could be planning to make redundancies.

Burdensome bureaucracy is putting a lot of companies off taking on new employees and government incentives have done little to encourage them. The National Insurance Holiday scheme fell flat and although the Chancellor has come up with measures to help young people into work, only time will tell whether they will be successful.

In the run up to Christmas, hiring will slow down as many companies look forward to the festive break. Hopefully, things will start to pick up again in the New Year.

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Contractors may have noticed that the customer service they receive from small businesses is not always as good as they would expect it to be.

In fact 81% of small firms have admitted that their customer service is not up to scratch, even though the majority of them believe responsiveness drives their business decisions.  Furthermore, 52% think they need to improve their overall communications with both current and prospective customers.

48% of SMEs said the best way to meet customer needs was to find a happy medium between staff resources and skills. 41% of decision makers said they wanted to be able to access staff at times that were convenient to them, whilst 39% said that customer service could be greatly improved if customers could access an expert when they needed one.

Being unable to access to the right person at the right time has long been a common gripe from people who phone customer service helplines. 34% of SMEs think the answer to the problem could lie in allowing staff to work more flexible hours.

Michael Bayer, the president of Avaya EMEA, the company that conducted the research, said that companies have to go the extra mile when it comes to providing customer service. Consumers have a vast array of similar companies to choose from and if they suffer a bad experience, it’s not difficult for them to move their business to a competitor.

He went on to say that it was interesting to see that SMEs are prioritising customer service, responsiveness and relationships. It’s imperative that businesses can communicate effectively with their customers in today’s fast-moving global business world.

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Private sector suppliers, including limited company contractors, are focusing increasingly on their cashflow and threatening clients with legal action if they do not settle their invoices in a timely manner.

Lovetts, a debt recovery firm, reported recently that the average timespan from invoice date to ‘letter before action’ is now 68 days; down from 72. Suppliers’ willingness to wait for payment has now been decreasing for the last three consecutive quarters.

Lovetts’ MD, Charles Wilson, said that suppliers have adopted an attitude of debt is debt and it makes no difference who the customer is. He suggests that last year’s forbearance has now run its course and suppliers are getting tough on any late payers.

He went on to explain that last year, businesses gave customers much more leeway before threatening legal action in order to maintain a good working relationship.

However, companies must make sure they carry out their threats and pursue a legal claim. If they don’t follow up, they will be accused of crying wolf.

80% of businesses that send letters warning debtors of recovery action do secure payment, so they are an effective deterrent. But with debts to SMEs totalling a record £33.6 billion, suppliers must demonstrate that they mean business when it comes to chasing overdue invoices.

Bad debts are not the only problem facing UK SMEs at the moment.

Global recruiter Hays conducted research that discovered that 55% of jobseekers think they could get better benefits working for a larger organisation, and 52% are concerned that smaller firms lack stability.

Small businesses need to attract skilled and talents personnel in order to remain competitive and employers should take the time to explain the direction the business is heading and future growth opportunities to potential recruits, Hays director Charles Logan said.

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Contractors might be interested to learn that UK workers do not have quite such a strong sense of work ethics as some of their global counterparts.

Jobs board Monster questioned employees around the world asking if they would engage in unethical behaviour in order to advance their career. Taken overall, 86% said they would not indulge in this sort of behaviour. However, in the UK the percentage was 83%, indicating that more people would consider behaving unethically.

Internationally, 6% of respondents said they might breach company policy, the same percentage would engage in underhand behaviour and 4% went as far as to say they would break the law in order to get ahead professionally.

8% of UK respondents would do underhand things and 5% would break the law to get ahead, but only 4% would break company policy.

Mexico appears to have the most trustworthy workforce. Only 12% of those questioned said they would engage in illegal, unethical or underhand behaviour to further their career.

Meanwhile, contractors concerned that somebody might steal their ideas might be interested to learn that a new service is to be set up to help SMEs protect their copyright, designs and trademarks.

The small claims service is to be introduced into the Patents County Court and will limit fixed costs as well as allowing damages up to a maximum of £5,000.

Recent research has discovered that 17% of SMEs gave up trying to enforce their intellectual property rights because of high court costs. Hopefully, small businesses will find the new system easier to use and more cost effective.

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