In a recent study conducted by the Federation of Small Businesses (FSB), it was found that the percentage of small businesses that have increased the wage for their employees is the highest it’s been in three and a half years.
The study on over one thousand businesses highlighted this positive finding, just as it was announced that UK unemployment rate has fallen. In the first quarter of 2018, the unemployment rate fell by 4.2%, which again is great news for the UK economy and the UK itself. It was also found that the money earned on an average basis within the small business sector also increased by 2.9%, compared to the same time last year.
According to the survey, 66% of small businesses have increased the salaries of their employees in the first quarter of 2018, a percentage of small businesses which is the highest it’s been since the last quarter of 2014. The pay increases of 2% or more are also at a three and a half year high, as around half of small businesses rewarded their employees.
The FSB chairman Mike Cherry commented: “Small firms are playing a critical role in keeping our jobs market buoyant. It’s great to see that such a big proportion is in a position to take on more staff and up pay levels.
“Unemployment remains a real problem for groups furthest from the world of work, such as ex-offenders, young people and those with disabilities. The Government should confirm plans for a National Insurance holiday for small employers that take on employees from disadvantaged groups so that every one of us can share the benefits of UK economic growth.”
Small businesses are playing a role in the low level of unemployment in the UK. Around 79% of small firms reported that they have either maintained the number of staff or have added new members to their team. This number is 3% higher than the second quarter of 2016.
On the slightly negative findings, it was found that only a quarter of sole traders reported that their revenues were up over in the last three month. This figure is down 5% compared to the same period in the previous year.
Mike Cherry adds: “With only one in four sole traders saying that revenues are increasing, the Government should reverse the damaging impact that Universal Credit is having on our self-employed community. The system gives sole traders just 12 months to make their firms a success when all the evidence shows that it takes two to three years to get a viable firm off the ground.”