UK businesses hit by rising employment costs

Four out of five businesses have been hit by increasing recruitment costs, as a result of legislation designed to improve workers’ wages and prospects.

A survey, conducted by the British Chambers of Commerce (BCC), found that changes in employment legislation, such as the apprenticeship levy, pensions auto-enrolment and a new higher minimum wage have increased business costs – BBC reports.

To deal with rising wages, which, according to a forecast by The Office for Budget Responsibility will increase the National Living Wage to £8.75 per hour by 2020, one quarter (25%) of businesses intend to reduce pay growth for staff.

38% of businesses said they planned to raise the price of products and services, whilst 21% said they planned to reduce staff benefits. 20% of respondents said they are likely to scale back on recruitment.