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57% of UK employers planning to increase salaries, finds Barclays survey

Despite rising living costs, the majority of respondents (52%) also said that wage pressure from employees wasn’t an issue, whereas 30% said it was a concern to some extent and 17% said it was a major concern.

When it came to hiring intentions, almost half (49%) of respondents are planning to increase staff levels in the year ahead (2013: 56%) and 41% are keeping staffing levels the same as the previous year. Positively, the overwhelming majority (90%) are not planning any job losses (2013: 79%). As with the survey in 2013, mid-sized* companies are leading the way in job creation, with 68% increasing jobs. (2013: 71%)

David Roust, Head of Recruitment Industry, Barclays, 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 and the UK economy.”

When looking at the types of roles businesses are looking to fill, the survey shows ajump in intention for more senior management hires, to 30% (2013: 23%), indicating an interest to recruit top talent to drive strategy. The largest companies are most likely to increase senior management positions this year (46%), but the smallest companies have shown the most growth in this area – 24% compared to 12% last year. However, the vast majority (86%) are planning to hire at middle or junior level, which is largely unchanged from last year (83%).

David Roust commented, “Businesses may have been disciplined about recruitment over the last couple of years, but as trading activity picks up, they are recruiting senior support to help drive strategy. Candidate confidence in the workforce is increasingly creating supply to meet the demand of businesses at all hiring levels to help drive business growth.” 

37% of businesses will be hiring freelancers or contractors next year, with 45% of those doing so citing them as “being more flexible” and 44% saying they “have a particular skill” as the main reasons for taking them on. 4% said that “fewer employment rights” was their main reason for hiring them, indicating that employment law is not a significant barrier to job creation.

Only 14% of respondents thought that unemployment levels would fall sufficiently to trigger an interest rate rise this year. Almost a third (32%) thought it would be in 2015 and 44% of the largest companies surveyed thought it would be 2016 or later. 

David Roust added, “Whilst no one knows when interest rates will rise, businesses should not be complacent. It would be prudent for firms to ensure they have sufficient cash flow to absorb the increase when it comes.”

Another focus for Government – apprenticeships - also seems to be getting traction, asemployment of apprentices is on the rise, with 29% of businesses saying they took them on in 2013 and the same amount planning to take them on in 2014. This is an increase from last year’s survey, when 22% had taken them on in 2012, and 27% were planning to take them on in 2013.

Additional findings:

&middot         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.

&middot         71% of businesses still believe sales increases lead to job creation, rather than believing job creation can drives sales, however this is a downward trend over the past four years (2013: 73%, 2012: 77%, 2011: 78%).

&middot         Zero hour contracts have been the topic of much debate, and respondents to the Barclays’ survey show that the vast majority of businesses (82%) won’t be using them this year, although 13% plan to – with the Healthcare and Facilities Management sectors most likely to do so (both 23%).

&middot         The largest companies are most likely to create zero hour contracts, with 35% of them saying they intend to.

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