What do you look for in a new recruit?

This won’t come as too much of a surprise to many small business owners out there, it certainly wasn’t for us. Because as long as we’ve been asking this type of question, it is the common response we get back. The problem seems to be though, that while employers hanker after staff who can demonstrate these attributes, there are simply too few out there.

The good news, however, is that steps are being taken by government to affect change here in the shape of funding to specifically target this issue. That is funding for ‘studio’ schools to ensure the number of youngsters who leave education lacking job-ready skills and frankly, a decent work ethic, will become less common, and we know small business will support these efforts.

Last month government announced 13 schools nationwide will get money to help them introduce these types of dedicated business skills training. Here in Knutsford, where we are based, Knutsford Academy was among them.
Studio schools allow 14 to 19-year-olds to study academic subjects through practical projects designed and delivered by employers, with pupils combining core GCSEs and vocational qualifications with real work experience. For those aged 16 or over this is up to two days and usually paid. Studio Schools also operate longer days and terms, mirroring the workplace.
We have for some time now been working with the Department for Business Innovation and Skills and the Department for Work and Pensions to promote education and training more relevant to the needs of both the employer and potential employee in this age demographic, so we think this is a really positive development.
Studio schools are a real opportunity to deliver a more work-focused curriculum to meet the skills requirements of local employers, and as our research suggests, it’s what businesses want.

Of course, for these types of projects to be successful, there has to be jobs for people to apply for. This is something our survey suggests might not be happening this year, with the evidence many small businesses are waiting for two things to happen before they look to recruit. These are employment costs to come down and profit margins to go up. Almost one in three (29%) described the former as ‘crucial’ before they would recruit, and 25% for the latter.

This could suggest gloomy news for employment figures over the summer, which could well stagnate into 2014. While the Employment Allowance announcement in the Budget was received positively by small businesses, this research shows firms are holding back on recruitment until after next April when the new measures take effect and NI costs drop.

We say there is clearly a pressing need for government to do more to reduce the cost of employment to incentivise SMEs to employ now. We said after the Budget the Employment Allowance was a great move, but that it was too far off with the economy still in the doldrums. This research seems to suggest we had a point.

Our research also suggests employers are waiting for a marked change in profit levels – and therefore significant economic growth – before they consider taking on more staff. The worry here is that most economists are not forecasting that type of sustained growth in the UK until much later in the year – bear in mind also the lion’s share of ‘forecasts’ over the past few years have ended up revised down.

So put those two concepts together, and the suggestion is that the 2013 job figures are going to remain pretty subdued for some time yet, and quite possibly even in to early next year before there’s any meaningful downward trend in unemployment.

Of course economic growth may well explode this year, but thus far, while there’s a growing consensus that the UK has turned a corner, it doesn’t seem too likely. And then, as ever, there’s the time-bomb that is Europe, and deep recession there will have an anchor effect on growth here.