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'Help small companies to create more jobs'

SCOTLAND's small businesses need help creating jobs, according to a report that identifies shortcomings in existing support schemes.

The Federation of Small Businesses (FSB) said the small operations that make up the vast bulk of Scotland's business base could create thousands of badly needed jobs.

However, the organisation believes potential is being squandered under job-creation programmes which fail to target the firms that are most likely to create jobs.

"The potential and sheer number of micro-businesses in Scotland means better support to help them unleash their potential could make a serious dent in the unemployment figures," said Andy Willox, the FSB's Scottish policy convenor.

He added: "Many of the job-creation schemes which our members come across focus on helping find jobs for a particular segment of the unemployed. If we turn that focus round and ask businesses with most recruitment potential what would get them hiring, we could see the creation of more sustainable jobs."

The suggestion that ministers fail to understand the importance of small firms was reinforced by the latest Family Business survey by PwC. The accountancy giant said although family businesses contribute 45% of Scotland's gross domestic product, and 25% in the UK, many believe they are still under supported and overlooked by Government.

The FSB said many of the current national job creation schemes do not work well for micro-businesses, which employ fewer than 10 people.

Last month The Herald revealed that a flagship measure intended to boost job creation in Scotland has had minimal impact.

The Herald found just 2871 businesses in Scotland had benefited from the National Insurance (NI) holiday scheme for start-ups by September 30, following two years of operations. Only 19,705 firms across the UK had benefited from a programme the Chancellor had claimed would help 400,000 UK firms over three years.

The FSB wants NI contribution holidays to be provided for all small firms that create jobs. Its report showed the recruitment process can be particularly challenging for Scotland's 321,000 micro-businesses.

"When a very small business expands its workforce by one or two, the character of the business changes in a way that a large organisation doesn't," said Mr Willox.

The report found the owners of micro-businesses are less likely to have experience of staff recruitment and management than bigger firms.

"The sort of help we're suggesting includes putting together an appropriate job description, advertising, advising people of the legal and regulatory issues," Mr Willox added.

The official Scottish Corporate Sector Statistics 2011 show micro-businesses make up nearly 94% of Scottish businesses and provide 27% of private sector jobs in Scotland.

The FSB considered responses from around 600 business owners across Scotland.

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