UK businesses 'hit by rising employment costs', BCC finds

30 Aug 2017

A survey carried out by the British Chambers of Commerce (BCC) has revealed that four in five businesses in the UK have been affected by rising costs generated as a result of changes to employment legislation.

In its Annual Workforce Survey, which garnered the opinions of more than 1,400 UK businesses, the BCC found that the Apprenticeship Levy, the National Living Wage (NLW) and pensions auto-enrolment have led to an ‘increase in the cost base of businesses’.

50% of respondents surveyed revealed that the NLW has helped to increase their employment costs, whilst 75% of firms reported a rise in costs as a result of compliance with pensions auto-enrolment.

Meanwhile, 20% of businesses have experienced rising costs as a direct result of the introduction of the Apprenticeship Levy.

Rising costs could lead to reduced investment and wage growth opportunities, the BCC warned.

Commenting on the findings, 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.’