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Job creation still a
priority for North West SME's, despite National Living Wage concerns
SMALL and medium sized businesses in the
North West will continue to create new jobs in 2016, despite concerns the
introduction of the National Living Wage may increase wage bills. According
to research by Yorkshire Bank, nearly ¼ of SMEs (24%) will invest additional
funds into hiring new staff in the next 12 months. 1 in 4 (27%) North
West SMEs will also invest more money into staff training to support their
belief that skilled people are the key to innovation, creativity and
business growth. However, more than ½ (55%) of small and medium sized
businesses believe the introduction of the National Living Wage in 2016 will
lead to an increase in staff costs. 1 in 5 SMEs (22%) expect their salary
costs to go up by as much as 10% as a result of the National Living Wage
introduction. From April 2016, employers will be required to pay all staff
over the age 25 a National Living Wage of £7.20 an hour, a 50p increase on
the current national minimum wage of £6.80. By 2020 this will rise to £9 an
hour. Just under ½ of SMEs in the North West
(46%) think the National Living Wage will have no impact on their salary
costs at all. Across the UK however, the belief that salary costs will
increase is most acutely felt in businesses with between 50 and 100
employees, suggesting larger enterprises (100+ employees) may be able to
absorb increased wage bills. It also suggests the National Living Wage may
not have as much of an impact on micro businesses and sole traders, which
make up around¾ of all businesses in the UK.
Simon Wright, Regional Director for Business and Private Banking at
Yorkshire Bank in the North West, said:- "We know businesses are
investing in their most precious assets; their people. Having the right
people and skills is a big issue for businesses to manage as our economy
shifts from 1 of traditional manufacturing to being knowledge led. It's
crucial for all businesses to be equipped with talented, creative and
innovative people to drive innovation and growth. There are many benefits
brought about by raising basic salaries; improved staff retention, increased
productivity and staff satisfaction. While businesses will need to manage
this increase in costs in what is already a competitive, albeit growing,
economy, there is support available both in terms of funding and advice."
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