The biggest threat to the employment market for IT contractors and other UK workers is a jobless recovery, it is claimed.

According to Steve Huxham, chairman of the Recruitment Society, although most small businesses are not looking to make any further job cuts, few are looking to take anyone else on as they emerge from the recession.

However, the latest data from the Federation of Small Businesses indicates that around 10.4 per cent of small firms are looking to cut staff numbers over the next three months, with confidence falling and the full impact of public spending cuts yet to be felt.

Mr Huxham went on to say that measures need to be introduced that will encourage small businesses to expand and grow their workforces.

"One reform of current employment legislation [could be] to look at whether companies below a certain head count should be exempt from certain parts of it," he suggested.