Employers in SMEs are almost five times more likely to recruit in the next quarter than larger businesses, according to new figures from the Chartered Institute of Personnel and Development (CIPD).
Overall, the proportion of employers planning to employ more people in the second quarter of 2014 has risen to 66% from 51% last quarter.
The research also shows small firms are more likely to recruit new staff than bigger firms. It reveals that the proportion of small employers who expect to increase staff levels over those who expect to decrease staff levels in the second quarter of 2014 is +52, compared with +11 for large employers.
The findings tie in with new research by the Federation of Small Businesses (FSB). John Allan, FSB national chairman, said: "The fall in the unemployment rate to a five year low confirms what our members have been telling us about their recruitment intentions over successive quarters. The data underlines that small firms are key to getting people into work."
However, the CIPD is warning that workforce growth needs to be handled carefully because it can dilute the values that a small business has been built on.
More than three quarters of small business decision makers surveyed by the CIPD said that their business success hinges on them staying true to their vision and values, and 79% said that this is something they will actively focus on as they grow. However, 17% said their colleagues would struggle to articulate what their vision and values actually are.
The CIPD's Dr Jill Miller said: "When implementing change it is important to think carefully about how that change can be used as an opportunity to reinforce your values, rather than undermine them. Keeping hold of 'what you're all about' over time requires constant attention."
To help SMEs understand the importance of their business culture, the CIPD has published a guide, Keeping culture, purpose and values at the heart of your SME, featuring case studies on successful SMEs including Naked Wines, Secret Escapes and Choccywoccydoodah.