Red tape a major barrier for small firms looking to hire

Added bureaucracy, dealing with HMRC, regulatory compliance and tax requirements also rank highly when small businesses consider taking on employees, according to new research from Intuit.

Currently there are 3.8 million businesses in the UK that don't have any staff. Taking in the views of 500 small businesses across the UK about their attitudes to taking on staff Intuit, makers of QuickBooks accounting software, set out to uncover the barriers small businesses faced in becoming employers.

Among those polled for One Giant Leap: the vital first step to becoming an employer, 80% of businesses without employees and 27% of current employers said they had no intention to take on new staff .

For those businesses without employees that do have plans to hire, cash flow is the biggest stumbling block.

Pernille Bruun-Jensen, Intuit vice president and UK managing director believes the cons simply outweigh the pros for small businesses that would like to take on staff. "With youth unemployment at an all-time high we need to make it easier for small businesses to continue hiring and encourage the swelling ranks of the self-employed to take the leap and hire their first employees," she says.

On a positive note, 29% of small businesses in the survey said they would be looking to hire if the economy improved. Another 26% admitted that they would look more favourably at hiring if employer's National Insurance payments were cut.

"There are a number of major hurdles small businesses and sole traders face, including unfair dismissal and discrimination laws," says Sean Morgan, managing director of Quest Professional and a contributor to the report. "Current legislation makes it very scary for small businesses to employ people even if they want to."

To download One Giant Leap: the vital first step to becoming an employer click here,

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