The latest GE Capita report on the European mid-market provides further evidence that the UK economy is enjoying a sustainable recovery in which many firms are fighting to attract the most talented staff.
The average UK mid-market company, which is defined as posting annual turnover of £15m to £800m is set to grow sales by 6.1 per cent in the next 12 months, compared with 4.8 per cent in Germany, 3.4 per cent in France and 3.8 per cent in Italy. This equates to projected UK mid-market revenue growth of £133bn in the next 12 months.
In Yorkshire, 74 per cent of mid-market companies grew their revenues in the previous 12 months, according to the research. These companies are set to grow revenues by an average of 6.4 per cent, which is almost double that of the previous 12 months and slightly above the UK average. Altogether, 67 per cent
of mid-market companies are confident about the outlook for their business. This is the second highest proportion of any region across the UK, and 49 per cent are looking to increase the number of internships they offer in the next 12 months. Over the next year an estimated 326,000 jobs are set to be created by mid-market companies in the UK compared with 150,000 in Germany, as the UK mid-market seeks to accelerate recruitment in response to increasing sales.
The study also found that one in three UK mid-market firms that currently have offshore activities are considering re-shoring some of them over the next three years. While the outlook for sales and workforce growth is bullish, the findings highlight an emerging skills shortage. Attracting employees with the right set of skills has emerged as the principal challenge facing the UK mid-market in 2014, followed by attracting top managerial talent and retaining talented employees. This is a shift from the 2013 research, when keeping down business costs and overheads was the top challenge.
Ilaria del Beato, the chief executive of GE Capital UK, said: “The success of the mid-market is crucial for the UK economy. Just 1.7 per cent of all businesses provide over one third of private sector GDP, revenues and employment. Yet while the mid-market is thinking bigger, it still has critical challenges to overcome, particularly as the competition for talent becomes much tougher, more so than regulation, keeping costs down, and access to finance.”
Lord Livingston, the Minister of State for Trade and Investment, said: “This report is very encouraging for the UK and its mid-sized businesses. I’m particularly pleased to see their entrepreneurial attitude to exports, which is critical to growth. UK Trade & Investment is continuing to support the UK’s mid-sized businesses to help them maximise their potential and tap into fast-growing overseas markets.”
John Cridland, the Director-General of the CBI, said: ”As the economic recovery continues to build momentum, UK mid-market firms are playing a key role in creating new jobs and markets, as well as competing on the international stage. We must build on this strong performance; addressing skills gaps and overcoming concerns around cost pressures.”
The study also found that firms in the North of England have more complaints about the quality of transport and broadband connections than their rivals in other regions.