The UK’s small and medium-sized businesses have created three times more jobs over the past five years than larger businesses, according to new analysis of the latest ONS data commissioned by Santander Business Banking.
While firms employing more than 250 staff added around 650,000 net jobs over the five years from 2013 to 2017 (a 4% increase), those employing less than 250 added 1.7m (a 14% increase) – underscoring just how central SMEs are to the health of the UK economy and the country’s current record high employment levels.
While larger businesses continue to employ more people in absolute terms – 16.47m people as against 13.96m for SMEs – Santander’s analysis suggests SMEs will overtake larger businesses as primary employers by 2030 if the five-year growth trend continues at the same pace.
However, separate research commissioned by Santander Business Banking has found that significant numbers of young people are failing to recognise the significant job opportunities that SMEs offer. Just a third (35%) of Generation Z and Millennials leaving full time education say they wish to work for an SME, while an even smaller proportion, just one in six (18%), want to work for a start-up or micro business. In contrast, the most popular career aspirations are to work for a large firm (51%), the public sector (51%) or a global multinational (49%).
This is despite nearly two thirds (64%) of Generation Z and Millennials, equal to around five million young adults in the UK, saying they are concerned about their career opportunities on leaving full time education – suggesting that many are potentially discounting the role that SMEs play in the economy.
Sue Douthwaite, MD of Santander Business said: “While there are many great roles available working for large companies across the UK, SMEs remain the life blood of the UK economy. There is strong demand from SMEs for staff and we would encourage people to look at the fantastic career opportunities that may be open to them outside of larger firms. As a bank focused on bringing much-needed competition to SME banking, we are supporting thriving SMEs every day who are hiring for brilliant roles across all regions of the UK.”
Opportunities with SMEs are also growing fastest outside London. Between 2016 and 2017, the West Midlands and East of England saw the greatest increase in number of SMEs of any UK region. In the East of England there were 8,400 new SMEs set up over the past 12 months while in the West Midlands, 6,900 new SMEs were founded over the same timeframe, equating to a 6.4% increase in both cases.
A quarter of young people (24%) said they plan to search for job roles in the capital, despite London being home to only 15% of the UK’s jobs. Greater Manchester is second in popularity, with one in 12 (8%) wishing to live there after leaving education, while Birmingham (7%) completes the top three, even though they account for only 4% and 2% of the nation’s jobs respectively.
To help connect graduates with SMEs, Santander runs a UK-wide Universities SME Internship Programme which matches up SMEs with interns at one of its 84 partner universities. SMEs can contact one of Santander’s partner Universities to find an intern who matches the needs of their business and are eager to begin their new career. Santander will then contribute funding of up to £1,500 to each SME per intern towards a placement of 1-10 weeks.