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News Article

‘Majority’ Of UK Businesses Hit By Rising Employment Costs

Aug 30, 2017

Rising employment costs – which includes the likes of the Apprenticeship Levy, the National Living Wage and pensions auto-enrolment – appears to be having a big impact on businesses here in the UK.

New research from the British Chambers of Commerce (BCC) has revealed that 75 per cent of companies are now experiencing a hike in their own costs because of this, with 23 per cent saying they’ve seen a significant rise.

Some 38 per cent also predicted that they would soon have to increase prices of their goods and services, while 25 per cent admitted they expect to reduce pay growth, because it’s likely the National Living Wage will rise to £8.75 an hour by 2020.

Head of business environment and skills with the BCC Jane Gratton explained that the burden of employment costs will put pressure on companies and influence the choices that they have to make, as well as outcomes for their members of staff.

With regards to the proposed hikes to the National Living Wage over the coming three years, she went on to add: “Firms are most likely to respond by raising prices or adjusting employee pay growth and wider benefits. Increasingly, manufacturers are looking towards greater use of technology and automation. There comes a point at which rising employment costs can no longer be absorbed through reduced profits.”

Currently, the National Living Wage applies to employees aged 25 and over. It increased to £7.50 an hour back in April this year.

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