The Government is being pressed to offer financial incentives to firms to take on new staff because a lack of confidence in the economy was said to be hitting recruitment.
A survey of 1,000 firms by Bibby Financial Services showed that one in three believed financial aid would help stimulate job creation.
The firms said they were keen to invest in more staff to build their business, but many complained of being stuck in a "growth trap" as they do not have the funds to recruit.
The greatest barrier to recruitment was said to be confidence in the economy, although concerns were also raised about the prospect of winning new business.
Edward Rimmer, chief executive of Bibby Financial Services, said businesses want to invest in new staff but needed support from the Government to make it possible.
"Businesses in the UK are in a growth trap where they want to invest in their firms, take on more staff and see significant growth going into 2012 after many hard years of cutting back.
"But those firms cannot make that step because they don't have the level of business needed, so they will remain at a stagnant level.
"If the Government stepped in, as previous governments have done in the past, and offered financial incentives for each new member of staff for instance, it would give the businesses that much needed support for real growth.
"It is clear from our survey that businesses want to grow but have come up against a number of barriers which the Government could act to remove. Unless these businesses can find ways to invest in staff we will not see the growth from small and medium-sized enterprises that the Chancellor is hoping for."Suggest a correction