To say that the UK economy is a bit of a mixed bag at the moment is something of an understatement, as the disparity between different businesses is resulting in an odd pattern emerging.
Some businesses are continuing to function in the face of pressure, able to adapt to changing conditions without making too many sacrifices, while other firms are facing the prospect of fewer team members and more difficulties as a result.
With a range of data recently released around employment and pay, now is the time for businesses to understand how to keep the workforce populated and the company productive.
Employees: Nice if you can afford them
According to the Office for National Statistics (ONS), there were 7,000 fewer job vacancies between April and June – a drop of 0.9 per cent.
This was despite the unemployment rate only decreasing by 0.1 per cent in the same period, as it remained relatively stable at 4.9 per cent.
The biggest decrease in vacancies was in smaller businesses, with those with fewer than ten employees struggling the most to hire new team members.
This indicates that fledgling businesses may be hitting a limit to growth, as if they cannot find a way to populate teams with the necessary levels of employees, then they may not be able to keep pace should demand for goods and services increase.
These businesses are also anticipating the impact of the changes to zero hours contracts.
Analysis has indicated that changes to zero hours contracts could cost employers between £350 million and £2.9 billion and could see fewer businesses able to take on additional staff.
If businesses had hoped to use zero hours contracts as a way of offsetting the present hiring challenges, then this is not likely to be a viable solution going forward.
How do businesses tackle employment costs?
Tough decisions need to be made when businesses are looking to make the most of the people they can afford to hire.
Wages are increasing, albeit at the slowest rate for six years, meaning that those who do work may find themselves more comfortably compensated than they would have been previously.
Regular earnings have grown by around 3.5 per cent in the last quarter, indicating that employers may now be focusing on ensuring that smaller teams are better compensated.
A way to keep teams small without overloading them is by determining what kind of talent you need to bring in-house and where your business may benefit from external expert support.
Outsourcing accounting rather than tackling it in-house can be an effective way of empowering your business to strive for greater financial success without adding additional employment costs.
Our team can review your current challenges and ensure that you are well equipped to keep your business running and growing in a realistic fashion with the size of team you can afford.
We can help you to get better control over tax exposure, ensuring that you mitigate bills by operating more tax efficiently.
This also aligns with employment costs as we can help you explore salary sacrifice schemes and Benefits in Kind to confer value to employees in a way that may be less of a drain on the company budget.
Employers who are able to create supportive environments for teams may benefit from the current job market, as there are plenty of talented individuals waiting for an opportunity to prove themselves.
Get in touch if you want to find the best way to support your team.
