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September 27, 2013 - Rachel Miller

Staff wages rise in small businesses, says FSB

Staff wages rise in small businesses, says FSBAlmost half (49%) of the UK's small businesses with employees on the National Minimum Wage have either increased wages in the past year or are considering raising pay.

The research from the Federation of Small Businesses (FSB) shows that most small business owners are looking to increase wages where they can afford to do so, and share the benefits of growth where possible. However, not all firms are currently in a position to absorb the costs of pay rises. The research finds that those in traditionally low paid sectors such as retail or hospitality, or where recovery has not fully taken hold, are still struggling.

These findings come off the back of further positive results from the FSB's latest Small Business Index. It reported that 15% of small firms have increased their staff numbers in the third quarter of 2013. This is the highest figure reported since the Index began in 2010 and reflects recent improvements in business confidence.

The data also shows that less than a quarter (23%) of small firms have any staff on minimum wage, down from 27% in 2012. The FSB also found that 49% of small firms already pay all their staff at or above the Living Wage.

John Allan, FSB national chairman, said: "With confidence returning to small businesses after a period of wage restraint, our research shows our members are looking to pass on any extra profits to their staff, including those on low pay.

"Our findings also show that small businesses are already playing their part in the economic recovery by employing more staff and paying them more where possible. However, even with the beginnings of an economic recovery, small businesses in some sectors still face rising business rates and utility bills. This means that not all firms are in a position to raise salaries and policymakers therefore need to be prudent when legislating on pay."

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