Small firms to cut jobs amid cost woes and new worker rights, finds poll
A third of small businesses are planning to axe jobs amid worries over soaring staff costs, while new employment rights are also set to see firms rein in hiring and trim their workforces, according to new figures.
A poll of nearly 1,400 firms by the Federation of Small Businesses (FSB) in the final quarter of last year revealed that 33% expect to reduce their workforces, up from 17% in the previous three months.
A separate survey of 1,270 small companies also found that over two thirds – 67% – would curb hiring in the face of the incoming Employment Rights Bill, with nearly a third – 32% – planning to reduce the number of employees they have before the new measures come into effect.
It found that three quarters – 75% – of small employers flagged worries over new laws relating to unfair dismissal changes, while 74% raised worries about changes to sick pay.
‘Wreak havoc’
Tina McKenzie, FSB’s policy chair, said: “The figures speak for themselves – plans to allow employees to sue their employers on their first day on the job will wreak havoc on our already fragile economy, while changes to Statutory Sick Pay will make employers think twice about their hiring plans.”
She added: “If taking on staff becomes a legal minefield, businesses will simply stop.
“That means more people on benefits, a ballooning welfare bill, and a devastating hit to living standards.”
The Employment Rights Bill also comes as firms face pressures from soaring labour costs, with the Government increasing national insurance contributions for employers from April, alongside another minimum wage hike.
The FSB found that more than half – 51% – of small firms surveyed at the end of last year believe that labour costs are one of the biggest barriers to growing their business.
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This is a complete disaster. Rachel from Accounts, the Treasury and the Bank of England are running amok in the small business sector – the backbone of our economy in Cymru. This is like Musk in the USA – same ignorance, same incompetence, same result – economic failure. We don’t need this. We don’t need Labour. 2026 will be only the first opportunity that we have a real opportunity for real non-Starmer-type change! There is an alternative – and Reform is definitely not it. Reform does not support SMALL business, it loves BIG business and it hates workers’ rights. Time… Read more »
So you’re against neo-liberalism and at the same time also stand with Reform UK, the Tories and the right-wing press against the Employment Bill which will give workers more rights?
How are business supposed to cope if new employees can within 1 minute of starting employment become upset with someone or something asked of them that they have the capability of suing their employer, and the employer is still unable to terminate their employment/contract, what sort of distorted mind came up with that one. Sounds like the new voting system being adopted by the senedd next year, put your X on a ballot paper and we will tell you later who you voted for, verrrrrry simular thinking.
Presumably this is part of Labour’s plan to make the best of Brexit. The million jobs left vacant by fleeing EU citizens can now be filled by those released through the NI squeeze.