One in five small businesses cannot grow their business because of problems recruiting staff, according to research released today.

A report from the Tenon Forum think tank shows 20% of small businesses feel effective recruitment is the largest barrier to their growth, largely due to salary and benefit levels larger firms can offer which they cannot.

Many small businesses are also less likely to have in-house HR capabilities that specialise in finding and cultivating talented staff.

As they grow larger, the research suggests that businesses find recruitment a lesser obstacle to growth, with 22% of companies with five to nine employees reporting recruitment as their biggest barrier compared to 9% of firms with 200 to 499 employees.

Recruitment was toughest for transport and communications firms, of which 38% struggled to grow their businesses.

Some 25% of construction firms and 23% of agricultural businesses said recruitment had the greatest impact on their growth, while manufacturing firms defied their recent struggles and reported the least growth problems related to recruitment.

"Staffing is a real issue for us, and one explanation for this is that in the UK we are very near full employment," said Andrew Short of the Anderson Group, a Tenon Forum think tank member. "The problem is heightened in the South East with so many skilled workers involved in the construction of [Heathrow] Terminal 5."

Small businesses, however, have some advantages over their larger counterparts, said Richard Kennett, chairman of the Tenon Forum. Small firms have a number of distinct benefits that aren't always found in larger organisation, he said.

"[Smaller firms offer] earlier opportunities for promotion and career advancement, more job flexibility, more direct personal contact with senior management and a higher profile within the company," Kennett said. "By increasing awareness of these benefits, small businesses will start to address the issue of recruitment."

Market conditions, cash flow, competition and attitudes to risk were listed as other leading inhibitors of growth in the survey.