Skilled Umbrella Company Employees may find demand for their services growing most robustly amongst SMEs rather than larger companies during 2014, the latest CIPD/SuccessFactors Labour Market Outlook (LMO) survey suggests.

As measured by the survey’s ‘net employment balance’ – the proportion of hirers planning to recruit new staff minus the proportion planning to cut staff – SMEs are substantially more positive about their hiring intentions than their larger counterparts, scoring +40 against the big firms’ +5.

While hiring is set to increase throughout the year, it may be at a slightly slower pace in general and pay awards will almost certainly be set below the current rate of inflation, with three-quarters of those surveyed saying they will award 2% or less.

The LMO’s net employment balance fell from +24 to +16 during the final quarter of 2013. Hiring optimism amongst employers in the manufacturing and production sector (+34) is markedly higher than in the services sector (+24).

The CIPD’s labour market adviser, Gerwyn Davies, said that weak productivity was the major factor behind the low pay awards: Sustainable real wage increases, he said, “can only be delivered if organisations can boost productivity, for example through smart investment in the training, development and management of their staff”.

Smaller firms, however, are pulling out all the stops to achieve growth rapidly and, according to Mr Davies, will need to be “equipped to hire the right people and to rise to the management challenges associated with growth”.

This may well translate into more contracting opportunities for freelancers with the right skills.

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