Research shows the majority of small businesses have absorbed the initial costs of the National Living Wage
Recent employment figures suggest that small firms have been resilient, managing to absorb the initial costs of the new National Living Wage without cutting employment or passing the costs on to the consumer.
That’s according to the latest research by the Federation of Small Businesses (FSB), which found that the majority of small businesses (59%) absorbed the initial costs by lowering profits and making other efficiencies.
The latest UK jobs numbers show employment up by 174,000 jobs and unemployment falling to 1.63 million, down by 39,000 from the previous period, with the unemployment rate stable at 4.9%.
Wage growth has slowed slightly – with average earnings, including bonuses, up by 2.3%, a 0.1% slower rate of growth compared to the previous period.
According to the FSB, data also suggests that since the UK’s vote to leave the EU, businesses have decided to take a ‘business as usual’ approach to hiring for the time being.