CBI survey reveals businesses’ biggest concerns for 2016
Two of the main concerns facing UK businesses are the introduction of the National Living Wage and a continuing skills shortage, according to a study co-published by the Confederation of British Industry.
The annual CBI/Accenture Employment Trends Survey was published at the end of December. Now in its 18th year, the survey featured more than 340 businesses that jointly employed almost a million workers in 2015.
The poll painted an overall picture of optimism but there were still concerns and fears for the future. On the positive side, over two fifths (43%) of businesses said they would expand their workforce during 2016, with full-time positions outstripping temporary roles.
More graduate jobs and apprenticeships were also expected to be created, although the rate of growth in both areas was slowing. More than half of businesses said they were intending to institute pay rises at or above the RPI rate of inflation and CBI director-general Carolyn Fairbairn said that the UK had continued to outlive expectations, with job increases throughout the UK.
Many respondents did have reservations in certain areas however, including the National Living Wage, which is due to be implemented in April for workers aged 25 or over. Many businesses have expressed concerns over their abilities to meet new minimum wage requirements, particularly in the service sector.
Just over half (51%) of respondents in that sector said they would have to raise prices, nearly a third (27%) said they would employ fewer people and 18% said they would change their reward packages. For some businesses, the increased wage burden could even lead to the sort of serious financial problems that could leave them requiring business recovery.
Another issue flagged was that of a continuing skills shortage. More than half (52%) of respondents said the development and maintenance of digital skills was of paramount importance. 46% said that a lack of skills threatened to have a major impact on the UK’s labour market competitiveness. Fewer than one in six (16%) of businesses felt that the new apprenticeship levy was the right way to deal with the skills shortage.
By Phil Smith