Businesses Remain Cautious Regarding Pay Rises
The CBI’s latest report predicts that the majority (51%) of UK businesses expect to create more jobs during 2014.
The CBI survey, which has been done together with Accenture, revealed that it was the first time since the start of the recession in 2008, the number of firms looking to recruit has overtaken the proportion of businesses that were not looking to increase headcount.
In addition to the expected rise in recruitment, the survey which covers businesses employing more than one million people in total, said there would be an increasing number of opportunities for young people with companies claiming to take on more graduates and apprentices.
Katja Hall, CBI Chief Policy Director, said: “We’re starting to see the recovery have an impact on business plans to hire, with more than half of firms boosting staff numbers next year and more opportunities for young people.
“It’s good to see jobs being created across most regions, not just London and the south-east. Our labour market performed well throughout the recession and pay caution and flexible contracts will continue to underpin growth.
“For the UK to remain an attractive place to do business, as the recovery takes hold, wage growth must go hand-in-hand with growth in productivity.”
A key finding of the report related to pay. Here it was revealed that companies were planning to take a cautious approach to future salaries.
Just below 40% say that they are planning pay rises below the Retail Price Index with less than one in ten (7%) claiming that they will pay their staff more than this rate of inflation.
This survey paints a very positive picture about the economy and shows that the positive sentiment that we have been seeing in relation to the economy since the Summer is being translated into strong orders and indeed recruitment.
“Small and medium sized businesses have been at the heart of the economic improvements that we have seen recently and many will be looking to take on more staff in 2014 and beyond. We know this from speaking to our clients, but it is also something which has been highlighted in other reports from the FSB and the British Chamber of Commerce.
“Economic growth is of course welcome, but it is also something which brings new challenges to SMEs. It is vital that company bosses within small and medium sized businesses are prepared and take effective advice from a specialist legal adviser which has a successful track record within their sector.”
Fergal Dowling - Partner