News

October 31, 2014

Optimistic SMEs fuelling jobs growth

Many small businesses are taking on more staff, raising pay levels and planning more recruitment in the coming year according to the findings of the latest workforce survey by the British Chambers of Commerce (BCC).

The report, entitled Contracts, Pay and Working Conditions, is based on a survey of almost 3,000 businesses. It shows that small firms are more likely to have increased wages above inflation, while a greater proportion of larger firms have kept wages in line with inflation.

The research reveals that 34% of businesses increased their pay above inflation last year; this was especially noticeable amongst micro firms (33%) and small businesses (38%). However, 38% of micro businesses reported that pay had remained unchanged.

More than half of the firms surveyed (57%) pay all of their employees at least the Living Wage. Those in the catering and the accommodation sector are least likely to pay the Living Wage to all staff.

However, businesses also reported that a major threat to jobs growth is employment regulation; 48% said the new statutory right for employees to request flexible working will harm their business. Only 17% think it will have a positive contribution.

In addition, 60% of firms expressed concerns about regulations on paternity leave and pay; 47% were worried about shared paternity and maternity leave; and 32% said that pension auto-enrolment will have a negative impact on their business.

John Longworth, BCC director general, said: “These results show that businesses remain optimistic about both growth and pay prospects for their staff, despite the slowdown in the economic recovery that has been seen over recent months.

“However, it is clear that businesses are concerned that additional employment regulation will affect their bottom line and hamper future jobs growth. The majority of our members already offer flexible working, so legislating in this area is unnecessary and will likely push up business costs. At the same time, businesses must play their part. If they want to retain key staff as they start families then they must invest in childcare provision, which is currently inadequately supplied.”

Related resources:

• The minimum wage FAQs
• The law on flexible working BRIEFING
• Taking on a new employee ARTICLE