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Businesses hit by rising employment costs

24th Aug 17 4:23 pm

Here’s why…

Businesses are being hit by rising employment costs this year due to changes in employment legislation, according to a survey released today.

The annual survey workforce survey of over 1,400 businesses by the British Chambers of Commerce (BCC) found around four in every five business have seen their employment costs increase.

It reveals that pensions auto-enrolment, the National Living Wage and the Apprenticeship Levy have increased the cost base of businesses, and could lead to reduced opportunities for investment and wage growth.

Three quarters of respondents report an increase in costs as a result of pensions auto-enrolment, with 23 per cent indicating they face a significant increase.

Consumer-facing industries were particularly affected by the rise in the National Living Wage and, with 73 per cent of firms, including wholesale, retail, accommodation and foods sectors, reporting an increase in costs.

Jane Gratton, Head of Business Environment and Skills at the BCC said: “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.”

“At a time when employers across the country are facing acute skills shortages, it is vital that they have the resources and flexibility to invest in their workforce and the future needs of the business,” she added.

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