SMEs put off taking on permanent staff

Jack Ma, alibaba's CEO  is against making business bigger and bigger all the time. In stead, small medium business is more flexible for most startups. Here is a similar opinion from smallbusiness. It is less cost by hiring temporary workers than hiring permanent  workers.

Three quarters of small businesses are choosing not to employ permanent members of staff due to the associated costs, finds research.

According to a survey of 2,000 small businesses by Rocket Lawyer, more than half (56 per cent) of the businesses that took part in the research say cost is the main obstacle for employing permanent staff.

Nearly half of respondents (42 per cent) cite the headache of legal compliance as the next biggest factor stopping them from taking on full-time staff.  

The situation is not expected to improve either. According to new business owners who took part in the research, legal requirements for employers, such as the new National Employment Savings Trust (NEST) scheme, are only adding to their worries.

Less than a quarter of respondents (21 per cent) state that they feel ready for NEST. Because of this uncertainty, and wider worries about cost, nearly nine in ten businesses (89 per cent) would welcome more support from the government to help deal with legal requirements.  

Mark Edwards, vice President and general manager UK of Rocket Lawyer says, 'Small businesses and start-ups are the bedrock of our economy. As a result, we need to give them the legal support and tools they need to continue growing. 'Currently, these growing businesses are facing a burden of legal compliance that is affecting how they can hire.'