Mid-sized firms set to trigger hiring boom

Mid-sized businesses in the UK are gearing up to give the nation's economy a "significant" post-pandemic boost with extensive investment and recruitment plans, according to a new survey.

David Sapsted

8 April 2021

Accountancy and business advisory firm BDO found that three-quarters of medium-sized companies, which account for one in four of the nation's jobs, regarded 2021 as a year to invest, with 26 per cent committed to financing new locations or mergers and acquisitions.Additionally, the survey of 500 companies, each with up to 250 employees, revealed that 86 per cent were looking to recruit additional staff over the next six months, 54 per cent of them on a permanent basis.The two areas of the country with the most firms planning to hire more staff were Yorkshire and Humber (75 per cent) and central southern England (73 per cent).Ed Dwan, a partner at BDO, said: “Mid-sized businesses are the engine of the economy; they have often proven robust even during the most uncertain economic conditions."The resilience they have demonstrated over the past year will mean they are well-placed to benefit from the vaccine roll-out and gradual lifting of restrictions. Ultimately these businesses will drive the UK’s economic recovery forward.“However, the strength of the mid-market economy can’t be taken for granted. The results show that government support (during the pandemic) has been vital for this segment of the economy so far, but areas such as access to finance and support on supply chain disruption will be crucial in creating an environment that allows these businesses to thrive.” According to the survey, most businesses believed the government would provide continuing support for them this year with 73 per cent backing Chancellor of the Exchequer Rishi Sunak's plans for regional 'levelling up'. Some 59 per cent believed their region would be given sufficient financial support over the next 12 months as a direct result of the pandemic.There was also wide backing for the 'super deduction' initiative announced in last month's Budget, which allows companies to reduce their tax bills by up to 25p for every £1 they invest. Almost half of the businesses in the survey said they were planning additional investments because of the scheme.About three-quarters of the companies also said they expected revenues to return to pre-pandemic levels within a year of the strictest lockdown restrictions being lifted this spring.However, many businesses said the pandemic had caused them to change their operations, with 38 per cent saying their business models or product lines were altering, and a third saying the pricing of products and/or services would increase.