Businesses optimistic about increasing pay and creating more jobs

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Looking for workAccording to the British Chambers of Commerce (BCC), businesses have increased employees’ pay over the last year, and most remain optimistic about growing their workforce over the next 12 months. This is according to findings from its Workforce Survey, Contracts, Pay and Working Conditions.

The survey of almost 3,000 businesses show that small and medium sized companies, and those in the IT, mining, energy and construction sectors are most positive about creating new jobs. The findings also show that small firms are more likely to have increased wages above inflation, while a greater proportion of larger firms kept wages in line with inflation.

Encouragingly, many firms already offer flexible and remote working, which highlights the vital role this plays in promoting business productivity and growth. However, businesses report that a major threat to jobs growth is employment regulation, such as the new right for employees to request flexible working and increased paternity leave and pay, which can be time consuming and costly to implement.

Key findings from the survey:

  • 34% of businesses increased their pay above inflation last year; this was seen most prominently amongst micro (33%) and small businesses (38%). However, a considerable number of micro businesses also report that pay remained unchanged (38%).
  • One quarter of firms (25%) increased their pay in line with inflation, and this was most common amongst medium (35%) and large businesses (31%).
  • More than half of firms (57%) pay all of their employees at least the Living Wage, with those in the catering and accommodation sector least likely to pay it to all staff.
  • Small (61%) and medium businesses (60%), and those within the IT (74%), mining and energy (71%) and construction (63%) sectors are most likely to increase their workforce in the next 12 months.
  • While companies in the arts, sports and recreation (27%), catering and accommodation (36%) and education (40%) sectors are least likely to create more jobs.
  • Many businesses think that additional employment regulation will have a negative impact on their business.  The majority of firms already offer flexible working (62%), but 48% believe the new statutory right for employees to request flexible working will harm their business. Only 17% think it will have a positive contribution.
  • Firms are also concerned that regulation to increase paternity leave and pay (60%); shared paternity and maternity leave (47%) and pension auto-enrolment (32%) will have a negative impact on their business.
  • Nearly a third of businesses (38%) offer remote working, but only 13% offer childcare provision for their staff.
  • Only 11% of businesses offer zero hour contracts, and very few firms expect that banning exclusivity clauses tying workers to one employer will have a negative impact (18%). In fact, the majority think it will have no impact (60%).

If you’re considering hiring an employee but aren’t sure where to begin with payroll, RTI, and registering your company as an employer, please get in touch to see how we can help. Nine Ashes Bookkeeping provides payroll services to small and medium sized businesses in Essex – serving the Brentwood, Chelmsford, Billericay, Harlow, Epping, Ongar and Ingatestone areas.