Small businesses could hire 3.5 million this quarter

• UK SMEs could hire as many as 3.5 million people this quarter, with businesses that anticipate employee growth planning to recruit eight new staff on average over the next three months

• Nearly three-in-five (57 per cent) UK small and medium sized businesses (SMEs) reported a revenue increase last quarter compared with the previous quarter, the highest level in 18 months

• The Barclays Business Barometer combines billions of merchant transactions, processed by Barclays, with research data to provide an in-depth look at the UK SME economy

22 August 2023: UK small and medium sized businesses (SMEs)¹ could help bolster employment by hiring as many as 3.5 million people this quarter, with businesses that anticipate employee growth planning to hire eight new recruits on average before the end of September. This is according to data from the latest Barclays Business Barometer – indicating a growing confidence in the economy².

This comes as nearly three-in-five (57 per cent) reported revenue growth last quarter, marking the highest level in 18 months. In fact, nearly two-thirds (62 per cent) of SMEs see this trend continuing, predicting revenue increases in a year’s time.

These figures are supported by data from Barclays, which sees nearly half of the nation’s credit and debit card transactions, showing a rise of 1.08 per cent in the volumes of transactions to SMEs in Q2 compared with the same period last year³.

Ramping up innovation

Against a backdrop of rising interest rates, businesses are embracing innovation to mitigate rising costs and maintain their competitive edge. To accomplish this, SMEs are turning to technology investments to increase productivity (45 per cent), as well as future-proof their company (44 per cent). Notably, businesses investing in innovation are committing, on average, nearly half (48 per cent) of their annual revenue to technology.

British retailers in particular are confident about growth over the next year, with 8 in 10 (85 per cent) reporting a positive outlook when compared to the last 12 months⁴. In fact, Barclays found that two-thirds (66 per cent) of retail SMEs are open to embracing new technology while, over two-fifths (41 per cent) have established dedicated technology teams within their business, each employing 13 people on average.

Retailers are turning to technology to keep up with the demands of high-street shoppers, with recent Barclays research finding that 7 out of 10 consumers use the Internet to inform how they shop and make savings. For example, online grocery websites have seen an increase of 54% in online traffic, with traffic to non-grocery up by 42%. In fact, almost all (93 per cent) of retailers say that harnessing data is key to their future success. The past year has seen retailers already actively investing in cutting-edge technologies to enhance operations such as data analytics (18 per cent) and artificial intelligence and machine learning (12 per cent).

Colin O’Flaherty, Head of SME at Barclaycard Payments, said: “It’s promising to see that SMEs are feeling more optimistic about revenue growth and are eager to invest in cutting-edge technology to future-proof their companies. Retail SMEs in particular have displayed a remarkable agility in adapting to evolving consumer behaviours by adopting emerging technologies – setting the stage for a brighter year ahead.

“Small businesses are vital to the UK economy and play a key role in supporting employment, so the employee growth projections are also really encouraging for both business stability and economic prosperity.”

To find out more about Barclays’ support for businesses visit: labs.barclays/business-health-hub 

ENDS

Notes to editors

¹According to YouGov research, UK SMEs expect to make 3.5 million hires next quarter. This is based on the government’s estimates that there are 1,440,225 employing businesses in the UK with fewer than 250 employees. Barclays’ research found that, on average, UK SMEs expect to hire 2.46 new employees in the coming quarter (when looking only at those who are planning to make new hires, this rises to an average of 7.92). Multiplying these figures gives an overall figure of 3.5m.

²Barclays commissions YouGov to conduct its SME-focused Barclays Business Barometer research. This study was conducted among 595 small and medium-sized business leaders, with a nationally representative regional and industry sample, between 10^th July 2023 – 18^th July 2023. 

³Barclaycard Payments transaction data processed between 1 April and 30 June 2023 by SMEs in the UK compared to the same period in 2022.

⁴ Barclays conducted ‘The New Retail Reality’ report in July 2023. This data was gathered via bespoke market research conducted by Censuswide among businesses and consumers across the UK. The consumer sample of 2,010 general consumers (UK) was collected between 24 – 26 May 2023. The business sample of 601 senior decision-makers in the Retail and Wholesale industry, working in businesses with turnover of £6.5m+, was collected between 18 – 24 May 2023. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct which is based on the ESOMAR principles.

NOTE: The UK Government’s SME action plan defines Micro businesses as any business with a turnover of under £2m, Small businesses as those between £2m – £10m and Medium-sized businesses as £10m – £25m. 

About Barclays

Barclays is a British universal bank. We are diversified by business, by different types of customer and client, and geography. Our businesses include consumer banking and payments operations around the world, as well as a top-tier, full service, global corporate and investment bank, all of which are supported by our service company which provides technology, operations and functional services across the Group.