A new study from the Federation of Small Businesses (FSB) has revealed just how important small and medium-sized enterprises (SMEs) are when it comes to the UK job market.
The study, which is the first of its kind, revealed that these firms take on around 1.3 million unemployed and disadvantaged people every year, compared to just 130,000 new hires in larger companies.
In addition, groups that find it harder to find work, such as disabled people or those suffering from long-term illnesses, are more likely to be hired by an SME than its larger counterpart.
National chairman of the FSB John Walker noted that small firms are unique in the role they play when it comes to helping these groups.
"They have a greater tendency to take on those that would struggle to find a job – those who have not worked for a long time, have little experience or have been sick.
"They have also shown resilience in the face of recession – still taking on some 1.3 million unemployed people per year.
"While not all of these will be new jobs, this is nevertheless evidence of the crucial role small firms are playing in our economic recovery," he said.
It comes after business secretary Vince Cable announced the creation of a £1 billion new business bank funded by tax-payer money to provide finance for SMEs that are struggling to find finance through mainstream means.
Earlier this month, the FSB revealed that an increasing number of small businesses who applied for a business loan over the summer from a high street bank were turned down. This was up on 40.6 per cent on the previous quarter.
As Mr Walker noted, there are plenty of SMEs with bright staff and good ideas who simply need a helping hand, and it is hoped that the new wholesale British bank, which will not have a high street branch, will help to alleviate this problem.
