High-growth SME workplaces

There are currently many gaps in our understanding of why some SMEs achieve rapid growth and others do not. In particular, relatively little is known about the role played by people, skills and employment practices. We will investigate these issues using linked employer-employee survey data for Britain, generating unique and valuable insights into the links between firm growth and employment practices.

Aims

Most of what we know about firms' employment growth is based on large scale administrative data sources (e.g. Anyadike-Danes et al, 2009). Whilst extremely useful in capturing the dynamics of firm growth, these data sources contain little information on what happens within the firm and, in particular, the policies and practices that firms deploy. We propose to explore these issues by analysing data from the 2011 Workplace Employment Relations Survey (WERS).

Methods

WERS is a linked employer-employee survey which provides nationally representative data on workplaces in Britain with 5 or more employees. The survey provides substantial samples of workplaces located in SMEs and larger organizations and, within each group, we are able to distinguish between organisations with differing growth trajectories. We are thus able to establish whether the characteristics associated with growth are similar or different across workplaces belonging to small, medium-sized and large firms.

Our analyses make use of our ability to link the data from WERS to administrative records in the ONS Business Structure Database. This allows us to measure firm growth using the same metrics that are well established in the existing literature (e.g. Anyadike-Danes et al, 2009), and then to go on to explore the characteristics associated with that growth in a way that has not previously been possible in Britain. Furthermore, it will be possible to relate the new insights provided by WERS back to the existing literature based on administrative sources.

Timescale and funder

The study is funded by Acas. It will run from September to November 2015.