Rising employment costs putting pressure on 4 out of 5 businesses
The British Chamber of Commerce interviewed 1,400 businesses across the UK as part of its annual workforce survey, the results of which were published today. 4 in 5 businesses reported that the cost of business had risen as a result of employment initiatives and legislation including pension auto-enrolment, the national living wage, the apprenticeship levy and the immigration skills charge. Pension auto-enrolment appears to be by far the greatest cause of the increase in costs, followed by the national living wage.
65% of respondents also said that they would need to make adjustments to their businesses if the national living wage rose to £8.75 by 2020 in accordance with forecasts. Those adjustments range from raising the price of products and services to reducing staff benefits such as bonuses and scaling back recruitment.
The BCC wants the government to ensure that no new upfront costs or charges are imposed on businesses for the remainder of this parliament. Jane Gratton, the Head of Business Environment and Skills at the BCC, said in response to the results that “businesses are under increasing pressure from the burden of employment costs, and this will influence the choices they make and outcomes for employees. Higher employment costs impact on the bottom line and reduce the resources available to invest in the business and its people.”