NVM’s portfolio covers a wide range of sectors, from pasty manufacturers to airport lounges – so could be considered a proxy for the wider SME base in the UK. NVM tends to invest at a later stage of development, with SMEs receiving between £2 million and £10 million of private equity funding mostly for management buy-outs or development capital.
SMEs account for over 59% of private sector employment and the Association of Investment Companies (AIC) recently reported that 80% of the 257 SMEs surveyed have seen an increase in employment since receiving private equity investment in the period from 1997 to 2013.
Here are the key findings of NVM’s survey of the 26 businesses that responded.
- 81% of businesses have seen an increase in employment since NVM first invested, with businesses collectively experiencing a 36% growth in staff numbers.
- 2014 experienced the highest levels of recruitment since 2010.
- Despite the recession, a 10% growth in employment occurred in 2010.
- The main reasons for recruiting more staff were to support organic growth, new products and services and to fill a skills gap.
- The majority of employees were recruited for sales & marketing, support and management roles.
- Most companies still source staff via recruitment firms and advert placements. However, social media/online recruitment has proved popular.
- 85% of businesses plan to recruit more staff over the next 12 months.
- 19% of staff recruited were aged 18-24, with the majority being employed via graduate and apprentice schemes.
Pay and job security
- 62% of businesses said they received pressure from staff to increase starting salaries.
- Average pay increase across businesses was 2.8% – well above rate of inflation (0.5% as at December 2014).
- 85% of businesses expect pay levels to increase over the next 12 months, compared to 15% staying the same. No-one reported a pay decrease.
- 88% of staff recruited work in full-time positions, compared to only 12% working part-time.
- …conversely, 85% of businesses offer flexible hours and locations, but the majority of staff still works full-time in an office, warehouse or factory.
Sectors and regions
- Portfolio companies working in the Technology/IT (47%), Manufacturing (18%), Leisure (10%) and Consumer (10%) sectors experienced the highest levels of employment growth.
- The number of portfolio companies based in each region, to include % of total portfolio:
6 based in North East (17%)
6 based in South East (17%)
6 based in Midlands (17%)
5 based in North West (14%)
5 based in London (14%)
3 based in South West (8%)
2 based in Scotland (5%)
2 based in East of England (5%)
1 based in Wales (3%)
UK share of employment growth (%) for each region:
29% North East
17% South West
12% South East
9% North West
0% East of England
NOTES TO EDITORS:
NVM Private Equity is independently owned with 30 years’ experience of investing in unquoted UK businesses. NVM is a generalist investor, managing £300 million of funds, and is differentiated by having executives living and working in regional business communities throughout the UK. NVM seeks investment opportunities of between £2 million and £10 million in UK businesses which have the right mix of growth potential and market vision. They may be looking to grow organically, acquire another business or secure a management buy-out. www.nvm.co.uk
For further information please contact:
Natalie Dickinson (NVM: PR & Marketing) 0118 951 7012 Natalie.firstname.lastname@example.org