FIRMS ARE INCREASING PAY AND CREATING MORE JOBS
October 30 2014.


The British Chambers of Commerce (BCC) has today (Thursday) published findings from its Workforce Survey, Contracts, Pay and Working Conditions. Results from the survey show that many businesses have increased employees’ pay over the last year, and most remain optimistic about growing their workforce over the next 12 months.


Findings from 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%).

Commenting, John Longworth, Director General of the British Chambers of Commerce (BCC), 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. Smaller businesses, particularly within the IT, energy and construction sectors are most confident about job growth, so it is crucial that those businesses are able to find talented workers with the right skills to meet that demand. This relies on schools and businesses working together to develop the talents of our young people.

“Businesses are flexible in their working arrangements, recognising that the wellbeing of their workforce improves business productivity and in turn, has a positive impact on growth. However, it is clear that businesses are concerned that additional employment regulation, which can be time consuming and costly, 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. What we want to see is better engagement with businesses, to help prevent unnecessary regulations in the first place – and for the process to be simpler for firms when trying to implement regulations that are truly important.

“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. The government can support this through measures such as our proposed Childcare Contribution Scheme, to help parents manage the initial costs of paying for childcare – enabling more talented individuals to stay in work and contribute to business growth.”

Minister for Employment, Esther McVey said: “As the survey makes clear – businesses up and down the country are feeling confident, creating jobs and giving more people the security of a regular pay packet.