SMEs drive UK job vacancies past pre-pandemic levels

As the final easing of coronavirus restrictions is due to take place next week, confidence in the UK’s economy is experiencing a long-awaited surge, with the number of employees on payrolls now at its highest level since April last year and 862,000 vacancies advertised between April and June – 77,500 higher than the first three months of 2020.

No small portion of this positive trend is owed to SMEs, who make up 99.9% of private sector businesses and employ around 60% of the nation’s workforce, and who are now poised to grow rapidly with the help of record investment over the past year.

Before the pandemic, small firms were hiring at a rate three times higher than large companies, and their vitality to the UK economy and its post-pandemic recovery has not gone unnoticed. £8.8 billion of private equity capital was invested into small firms in 2020, and according to research commissioned by IW Capital – an experienced leader in SME growth funding and development – 16% of UK investors are looking to back start-ups and SMEs in 2021, with the figure for the first quarter of 2021 already having reached a value of £4.5 billion.

This record level of investment comes at a time of record optimism in the SME sector, where UK entrepreneurs are demonstrating immense resilience and adaptability in the face of one of the most challenging economic periods of the post-war era. With three quarters of CEOs expecting overall economic conditions in the UK and Ireland to improve in the next 12 months, the economy is showing promising signs of heating up, and its continued growth will be fuelled by the small businesses that provide its foundation.

Luke Davis, CEO of IW Capital, comments:

“The end of restrictions, although not without its risks, provides the clearest sign for businesses yet that normality is on the horizon. The reopening of the rest of the economy provides a boost not only to the business forced to stay shut until this point but to all the other firms that help them operate. Higher capacity at theatres helps the restaurant industry and a return to the commute will benefit the city centres that have been eerily quiet at times.

“From what we have seen from our portfolio companies and investors, it also looks like we will experience a desire for small businesses to grow with the continued support of the private investment community. At IW Capital, we have made several significant investments throughout the pandemic in companies that have gone on to enjoy tremendous success, and in doing so have seen record demand from investors to support them.

“Reopening, record levels of investment, consumers looking to spend and the ambition of the UK’s entrepreneurial economy all point in the direction of a summer of growth which could continue well into 2022 as we hopefully return to pre-pandemic conditions once more.”