The proportion of UK businesses planning to make greater use of self-employed workers has nearly trebled in a year, amid rising employment costs.
Research by the British Chambers of Commerce (BCC) reveals that 15% of firms would expect to recruit more flexible workers if, as is forecast, the hourly National Living Wage (NLW) increases to £8.75 by 2020.
That’s up from just 6% that planned to do so when surveyed in 2016.
Self-employed to the rescue?
This good news for the self-employed, as well as contractors and other flexible workers, is counter-balanced by some worrying answers regarding recruitment generally.
One in five firms (20%) will scale back recruitment if the NLW increases to expected levels. Last year’s figure was 16%.
The BCC’s 2017 annual workforce survey of more than 1,400 businesses found that around four in five have seen their costs increase this year through changes in employment legislation.
NLW + auto-enrolment + Apprenticeship Levy = higher costs
As well as the National Living Wage, which currently stands at £7.50 per hour for those aged 25 and over, the cost base of UK plc has been driven up by pensions auto-enrolment and the Apprenticeship Levy.
In response, the BCC is calling on the government to resist the urge to hit businesses with any new upfront costs or taxes for the remainder of this parliament.
‘Maintain labour market flexibility’
Jane Gratton, head of business environment and skills at the BCC, said:
At a time when employers across the country are facing acute skills shortages, it is vital that they have the resources and flexibility to invest in their workforce and the future needs of the business.
Employment is just one element of the high upfront cost of doing business in the UK. It is the cumulative impact of all of these changes, and the pace at which they are being introduced, that causes the greatest concern and poses the biggest risk.
There is little scope for firms to absorb any further costs without there being damaging effects on competitiveness, growth and opportunities for people in the workforce.