Over half of businesses plan wage increase

Over half of businesses are planning to increase wages in the year ahead, with 39% planning to increase them for their entire workforce, according to the Barclays Employers Survey 2014.

Over half of businesses are planning to increase wages in the year ahead, with 39% planning to increase them for their entire workforce, according to the Barclays Employers Survey 2014.

The survey, which questioned 684 businesses, found 57% were planning wage increases, although the survey did not say whether this might be over the rate of inflation.

Around half said that wage pressure from employees wasn’t an issue, whereas 30% said it was a concern to some extent and 17% said it was a major concern.

When it came to hiring intentions, almost half of respondents are planning to increase staff levels in the year ahead, slightly down on 2013, and 41% are keeping staffing levels the same as the previous year. Some 90% are not planning any job losses, significantly higher than in 2013. As with the survey in 2013, mid-sized companies are the most likely to be planning to create jobs, with 68% increasing jobs. 

David Roust, Head of Recruitment Industry, Barclays, said: “After an extended period of wage freezes, which have been tough for employees, it’s good to see that so many employers will be increasing wages in the coming year. This can only have a positive impact on employee morale and the UK economy.”

When looking at the types of roles businesses are looking to fill, the survey shows a jump in intention for more senior management hires, to 30%, indicating an interest to recruit top talent to drive strategy. The largest companies are most likely to increase senior management positions this year, but the smallest companies have shown the most growth in this area – 24% compared to 12% last year.  However, the vast majority are planning to hire at middle or junior level, which is largely unchanged from last year.

Roust added: “Businesses may have been disciplined about recruitment over the last couple of years, but as trading activity picks up, they are recruiting senior support to help drive strategy. Candidate confidence in the workforce is increasingly creating supply to meet the demand of businesses at all hiring levels to help drive business growth.” 

Some 37% of businesses will be hiring freelancers or contractors next year, with 45% of those doing so citing them as “being more flexible” and 44% saying they “have a particular skill” as the main reasons for taking them on. 4% said that “fewer employment rights” was their main reason for hiring them, indicating that employment law is not a significant barrier to job creation.

Only 14% of respondents thought that unemployment levels would fall sufficiently to trigger an interest rate rise this year.  Almost a third thought it would be in 2015 and 44% of the largest companies surveyed thought it would be 2016 or later. 

Some 29% of businesses took on apprenticeships in 2013 and the same amount plan to take them on in 2014. The survey also found that 82% of businesses don't plan to use zero hours contracts this year, although 13% plan to – with the Healthcare and Facilities Management sectors most likely to do so. The largest companies are most likely to create zero hour contracts, with 35% of them saying they intend to.

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