Member Article

North East companies increasing employee pay and optimistic over workforce growth

North East companies have increased employees’ pay over the last year and most remain optimistic about growing their workforce over the next 12 months according to a recent North East Chamber of Commerce study.

NECC members formed an integral part of the British Chambers of Commerce Workforce Survey, Contracts, Pay and Working Conditions, which welcomed responses from almost 3,000 businesses.

Findings from the survey show that small and medium sized companies, and those in the media and creative services, mining and utilities, and IT and telecommunications sectors are most positive about creating new jobs.

Encouragingly, many firms already offer flexible and remote working, which highlights the vital role this plays in promoting business productivity and growth.

However, businesses report that a major threat to jobs growth is employment regulation, such as the new right for employees to request flexible working and increased paternity leave and pay, which can be time consuming and costly to implement.

Key findings from the survey found that 35% of businesses increased their pay above inflation last year (1% higher than national average); this was seen most prominently in media and creative services (75%) and the lowest in health and social care services.

Furthermore, One quarter of firms (25%) increased their pay in line with inflation, and this was most common amongst medium (35%) and large businesses (31%).

It was also found that more than half of firms (57%) pay all of their employees at least the Living Wage.

Many businesses reportedly think that additional employment regulation will have a negative impact on their business.

The majority of firms already offer flexible working (62%), but 54% believe the new statutory right for employees to request flexible working will harm their business. Only 14% think it will have a positive contribution.

Moreover, firms are also concerned that regulation to increase paternity leave and pay (60%); shared paternity and maternity leave (51%) and pension auto-enrolment (18%) will have a negative impact on their business.

In addition, over a quarter of businesses (27%) offer remote working, but only 13% offer childcare provision for their staff.

NECC Director of Policy, Ross Smith, said: “These results and our own Quarterly Economic Surveys over the last 18 months are a clear demonstration of how our businesses remain optimistic about both growth and pay prospects for their staff.

“It is fantastic to see so much positivity across some of the region’s strongest sectors, but it is crucial that those businesses are able to find talented workers with the right skills to meet demand. This relies on schools and businesses working together to develop the talents of our young people.

“The wellbeing of their workforce improves business productivity and in turn, has a positive impact on growth so we are seeing businesses becoming more flexible with their working arrangements.

“However, there is clear concern that additional employment regulation, which can be time consuming and costly, is impacting on profit and could hamper future jobs growth.

“With over 60% of our members offering flexible working, legislating in this area seems completely unnecessary. With better engagement with businesses, unnecessary regulations can be prevented in the first place.”

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