Hiring Expenses Rise, But Not Pay Packets

20th December 2017.

Companies are shelling out extra cash to take on more workers, but little of the money is finding its way into wages.

According to new figures from the Office for National Statistics, wage costs in the three months to September rose by 2.6 percent, while other hiring expenses saw an increase of 6 percent.

These additional costs included pension contributions, national insurance, sickness payments, maternity and paternity pay and other benefits.

Businesses warn that the extra costs are placing a severe burden on their finances, and making it harder to give workers pay rises.

Such business costs are growing particularly rapidly in the public sector at 10 percent, the fastest pace for more than a decade.

Wage growth continues to be sluggish in December, the eighth consecutive month of declining real wages for UK workers.

Even Government employees have only seen their hourly wages rise by 1.6 percent, illustrating the enormous gulf between resources expended and the benefit felt by staff.

A recent survey by the Recruitment and Employment Confederation found that employers are growing increasingly pessimistic about the state of the economy. The recruiters’ group said that 51% of employers expect economic conditions to become more challenging in 2018, and 49% said they would be the same.

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