More than 400,000 SME jobs needed to return to pre-pre-pandemic jobs trajectory
Around 410,000 small business jobs need to be created by the end of this year to return to the pre-pandemic jobs trajectory, according to new data by Xero, shared with Morning Wire this evening.
With small businesses employing over half of the UK workforce, a strong sector recovery will be needed to achieve significant employment growth.
The firm found that UK small business job losses have been almost double those in big businesses since the start of the pandemic.
Jobs were down by 24.4 per cent year on year since May 2020, while jobs in February of this year remained 10.6 per cent below February 2020 levels.
Women, employees aged 30 and under, and those in customer-centric jobs, such as hospitality, experienced particularly sharp declines in employment in the small business sector during the early months of the crisis, with growth continuing to lag into 2021.
However, the report also found that digitally connected small businesses faced far fewer declines in jobs (14.8 per cent) than those with less connectivity (18.4 per cent).
Small businesses that paid higher wages in each industry also saw fewer job losses. In May 2020, higher paying companies saw small business jobs down 13.5 per cent compared to lower paying companies with jobs down 22.3 per cent.
State of small business
Xero came to its findings by using anonymised and aggregated data of hundreds of thousands of customer records, in partnership with Accenture.
Based on data on sales, jobs, time to be paid and wages, the firm found that trading conditions are still difficult for many. In March of this year, overall small business performance remains below average conditions in the UK.
“We can see first-hand what’s happening to small businesses and the impact on the whole economy and jobs. One thing we’ve noticed is that small businesses are so often overlooked by the Government. And this imbalance needs to be addressed. Only then will we see positive change,” said Gary Turner, managing director of Xero UK.