Small business owners opt for short-term staff

Date: 6th March 2008

Small business owners are recruiting short-term staff instead of permanent employees - in a bid to keep company accounts in order during the "credit crunch".

A report by the Recruitment and Employment Confederation (REC) and business group KPMG has revealed that permanent staff recruitment levels have dipped to their lowest point in five years.

It emerged that small business owners are increasingly offering short-term and flexible contracts to workers to avoid any unnecessary staffing costs.

Director of the group Alan Nolan claims small business owners are "moving towards a more flexible labour force" in a bid to stay afloat.

"The good news is that although pay is still on the increase, the rate of growth has substantially slowed down. This will be a welcome message for the monetary policy committee who were worried that higher food and energy prices will push up wage demands," he commented.

In other staffing news, the Federation of Small Businesses yesterday commented that this year's minimum wage increase to £5.73 an hour should not impact too severely on company accounts - as the rise is in line with UK inflation rates.