Nearly two thirds of West firms plan to increase wages this year as the region’s economy bounces back from recession, new research shows.
This is despite half of the businesses taking part in the Barclays Employers Survey 2014 saying wage pressure from employees was not an issue. However, some 29% said it is a concern to some extent and to 21% it is a major concern.
Barclays Swindon relationship director, corporate banking, Chris Elias, pictured, 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. However, it will increase inflationary pressure as the year progresses.”
The 684 businesses from across the UK taking part in the survey were also asked about interest rates and unemployment following comments by Bank of England governor Mark Carney that he would not consider a rate rise until the jobless rate had fallen to 7%.
Just 17% of survey respondents in the West thought unemployment would come down sufficiently to trigger a rate rise this year, with 34% expecting the next move in borrowing rates in 2015 and 33% of the largest companies believing it will be 2016 or later.
Mr Elias added: “Whilst no one knows when interest rates will rise, businesses should not be complacent. It would be prudent for West firms to ensure they have sufficient cash flow to absorb the increase when it comes.”
Apprenticeships – a key focus for Government – also seem to be getting traction, the survey reveals, with 36% of West firms taking on an apprentice this year compared to 21% last year.
· A third of respondents (33%) think the eurozone crisis is behind them. Nearly half (47%) say it’s neither any worse nor any better, while 16% think it’s ahead of them.
· 71% believe sales increases lead to job creation, rather than job creation driving sales. However this is a downward trend over the past four years (2013: 73%, 2012: 77%, 2011: 78%).
· Zero hour contracts have been the topic of much debate, and Barclays’ survey shows that the vast majority of businesses (82%) won’t be creating them this year, although 13% plan to – with the healthcare and facilities management sectors most likely to do so (both 23%). The largest companies are most likely to introduce zero hour contracts, with 35% of them saying they intend to.