Small companies are having to be more flexible and creative in how they go about filling jobs due to record employment levels, according to research unveiled by recruitment company Archer Mathieson.

According to the study, 65% or businesses expect to struggle to fill positions due to a shortage of candidates over the next 12 months and this is set to be worsened by the pressure to reduce labour costs experienced by 80% of respondents.

As a result, many are looking at taking a new approach to filling vacancies and rewarding staff, the research concluded. A huge 90% would consider employing interim specialists, and almost as many favour the use of alternative forms of remuneration beyond basic salaries. “We are seeing an ongoing battle in the fight for talent,” said Ashton Ward, senior partner at Archer Mathieson.

The survey also revealed that consumer spending tops the rankings as the most important indicator of economic outlook, followed by interest rates and gross domestic product (GDP). Businesses involved in the fast-moving consumer goods (FMCG) and retail sectors were the most likely to rank consumer spending at the top, while the pharmaceutical and technology sectors were more likely to use interest rates as an indicator.

A solid 70% of the sample considers their industry sector to be stable – especially in business services – although approximately half of FMCG and retail respondents believe their sector is in a volatile period.

The pharmaceutical, business services and technology sectors are all optimistic of achieving volume growth above the Bank of England‘s 3% forecast in 2007. But this view is not shared by all those in manufacturing and retail.

The research also indicated that many companies are now considering moving parts of their operation overseas, which previously tended to be the preserve of larger organisations.