Workforce survey reveals how employment legislation has increased business costs

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29th August 2017 16:58 - Financial Services

Workforce survey reveals how employment legislation has increased business costs

Workforce survey reveals how employment legislation has increased business costs: A survey conducted by the British Chambers of Commerce (BCC) reveals how businesses in the UK are affected by the updates made to the current employment legislation.

Partnered with Middlesex University in London, the BCC surveyed 1,400 business people in all regions in the UK in order to understand how employment costs currently impact the business community.

The legislation was recently amended to target nine key employment issues, some of which include the gender pay gap, apprenticeship schemes, pensions, minimum wage and statutory pay.

In short, the survey revealed that four out of five businesses are likely to increase their costs to compensate for their loss of earnings.

Following the alterations to the current employment legislation:

·      75 per cent of businesses have seen an increase in costs following the rollout of pensions auto-enrolment.

·      50 per cent have witnessed an increase in costs since the National Living Wage increased.

·      20 per cent have reported increased costs due to the Apprenticeship Levy.

·      8 per cent have seen an increase in costs as a result of the Immigration Skills Charge.

Looking forward, if the Government increase the National Living Wage to £8.75 by 2020, 65 per cent of businesses plan to make further changes to limit future costs.

Out of the 65 per cent:

·      38 per cent will raise prices of products and services

·      25 per cent will not increase staff wages

·      21 percent will reduce staff benefits

·      20 per cent will reduce the number of new recruits

Following the results, it is believed that businesses are now in a position of economic uncertainty, as Director of Global Corporate Engagement, David Williams, from Middlesex University comments:“Businesses are facing the challenge of maintaining profitability while remaining price competitive. This is a tough balance to achieve during what is an uncertain period.” 

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