Wage Pressure A Headache For Firms

17th December 2024

Jane Gratton, Deputy Director Public Policy, reacts to the latest ONS Labour Market data published this morning

Reacting to the latest ONS Labour Market data published this morning, Jane Gratton, Deputy Director Public Policy said:? 

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“News that wages have been rising faster will be a concern for businesses as they continue to grapple with the huge increase in employment costs announced in the autumn Budget. The unemployment rate remains unchanged, showing ongoing challenges in the labour market.  

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“Higher employer National Insurance Contributions and an increase in the national living wage from next April, means firms are facing difficult decisions. Many say they will have to raise prices, put recruitment and investment plans on hold and look for other ways to reduce their costs. 

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“Although the level of vacancies in the economy is now fast approaching the pre-pandemic level, this does not mean the recruitment crisis is over.  Our latest research shows that over three quarters of SMEs are still struggling to find staff with the skills they need.?? 

 

“With firms reconsidering their recruitment plans due to rising employment costs, there is a risk this could impact the labour market in the months ahead. But it is crucial the Government continues to take action to tackle the skills crisis, boost workforce health and ease economic inactivity.”? 

 

More detail on the ONS data can be found here.