PAYE umbrella contractors in the South may enjoy better prospects for placements than those working in the north of the country, a new report suggests. Further evidence of a North-South divide emerged in the latest quarterly survey of entrepreneurs from professional services firm RSM Tenon.

Of the companies polled, firms located in the South had the most optimistic plans for hiring new staff in the coming months, with 40 per cent of Southern businesses stating that they planned to increase their employee headcounts. Both permanent staff and freelancers working for umbrella companies will be recruited. Just 15 per cent anticipated making redundancies over the same period.

A distinctly gloomier picture emerged amongst Northern firms. The number expecting to make redundancies was almost double that of Southern companies at 28 per cent. Businesses hoping to expand staffing levels were also fewer in number at 30 per cent.

Across the country as a whole, 76 per cent of the companies surveyed said that they did not plan to slash spending – but neither did they envisage implementing any rises in pay rates during 2011. Smaller firms especially appear to be struggling, as those feeling optimistic about new business opportunities over the next three months fell from the 50 per cent figure recorded this time last year to 43 per cent now.

The Bank of Scotland’s January Report on Jobs, however, insists that small firms have “an integral role to play” in the north by helping private sector hiring to compensate for the forthcoming job losses in the public sector. The bank’s data shows that hiring for permanent posts rose in January at the fastest rate for nine months. Freelancers can also draw some cheer from the encouraging finding that contractor roles also increased at the fastest rate for three and a half years last month.

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