Staffing costs increase again
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Staffing costs increase… again! We’d like to say we are surprised however working in HR, we have learned to expect everything and anything all at once. But what does that mean for small businesses and their finances?

Last month we heard the announcement of the National Minimum Wage (NMW)  in the UK being increased from 1st October 2014 following recommendations made by the Low Pay Commission.  The increases are bigger than usual so we would strongly advise checking your staff’s rates of pay to check what impact this will have on your ‘bottom line’.

The rates from 1st October will be as follows:

  • a 19p (3%) increase in the adult rate (from £6.31 to £6.50 per hour)
  • a 10p (2%) increase in the rate for 18 to 20 year olds (from £5.03 to £5.13 per hour)
  • a 7p (2%) increase in the rate for 16 to 17 year olds (from £3.72 to £3.79 per hour)
  • a 5p (2%) increase in the rate for apprentices (from £3.68 to £3.73 per hour)

It is also worth noting that the Low Pay Commission have indicated that this is likely to mark the start of a phase of bigger increases over the coming years provided that economic conditions continue to improve, so certainly costs of employing staff are creeping up.

And, if that isn’t enough payroll news for one day, we’ve also heard this month that the Percentage Threshold Scheme (PTS) which, in certain circumstances, enables employers to reclaim Statutory Sick Pay (SSP), has been abolished from 6th April 2014.

Previously, if the SSP you paid for the month was more than 13% of your Class 1 NI contributions you were able to reclaim it, but from now on this will no longer be the case.  You will, however, potentially be able to recover unclaimed SSP from previous years for a limited period.

This is yet another incentive for employers to better manage sick leave – luckily our citrus HR system will not help you monitor and manage sick leave, but we’ll also guide you through from start to finish on how best to manage staff back to work, or take the difficult decision to dismiss.

We can’t confirm if the staffing costs increase will remain stable, increase again even further, or drop back down. However we are here to support any small business that needs it.

So if you need support dealing the with staffing costs increase, get in touch on 0333 014 3888or email for friendly, expert HR support.

The content of this blog is for general information only. Please don’t rely on it as legal or other professional advice as that is not what we intend. You can find more detail on this in our Terms of Website Use. If you require professional advice, please get in touch.

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