The government has been urged to remove the red tape restricting small businesses to combat rising unemployment.
John Salt, director at Totaljobs, said SMEs are the “lifeblood” of jobs in Britain, as the latest figures revealed unemployment in Britain surged to a near 17-year high at the end of 2011.
Salt stressed that because many small firms have no HR department they need more help to give them the confidence to hire, invest and grow their business.
“SME firms really can make the difference. They are the lifeblood of UK employment,” he said.
“And I think now is the time for the government to look hard at making it easier for those kind of businesses to employ people.”
Amid the gloomy figures in the Office for National Statistics report, such as the jobless total reaching almost 2.7 million, there were some causes for optimism as employment figures actually increased by 9,000 in the three months up to January 29.
Meanwhile, employment at private firms also grew by 45,000 to 23 million, although this was not enough of a boost to offset public sector cutbacks.
Salt explained that in recent months London-based Totaljobs has noticed increased optimism among UK businesses in terms of investing in hiring staff.
He said: “It hasn’t been quite enough to offset the losses in the public sector, which is why we’ve still got a net increase, but let’s not forget that overall there are more people in employment now than there have been for a long time. It’s just that there is a large demographic of people working in the UK.”
Unemployment in London increased by 11,000 – taking it to 433,000 – during the quarter, despite the Totaljobs Barometer reporting a large number of jobs being advertised in the south of England compared to the north.
Salt explained that the key to London’s fortunes increasing further is the financial services sector soaring again.
He said: “One of the things that still needs to happen is for the banking and finance sector to really start picking up in London and the South East.
“Once that confidence comes back it will have a much bigger impact on not only that industry, but the surrounding support industries too. So when we look at things like IT, contracting, finance and sales around that area and administration and secretarial support, those are the bellwethers that will tell us whether the economy is getting a lot better.”
Employment Minister Chris Grayling has acknowledged that although the latest report has some positives, more still needs to be done.
“This is a more encouraging set of figures, with signs that the labour market is stabilising, but there is clearly still a big challenge ahead to bring down unemployment and get people back to work,” he said.
“The international economic outlook remains difficult but we will do everything we can to help the unemployed find jobs.”