52% hospitality SMEs say economy still ‘too sluggish' for pay rises

10 March 2014 by
52% hospitality SMEs say economy still ‘too sluggish' for pay rises

Small and medium hospitality businesses do not yet feel ready to give staff pay rises despite the recently-reported improvement in the economy, according a new report.

The quarterly study, called the Viking Small Business Barometer, asked 1,000 small and medium business owners, including a percentage in hospitality, how they felt the current economic climate affected their business.

Over half (52%) said they felt the economy was still too sluggish to give pay rises, while 82% said they expected no increase in staff turnover in the next 12 months, and just 17% said they would look to recruit for new positions this year.

Although two in five (41%) said that their business had improved in the last three months (November 2013 - January 2014), and 76% anticipated more growth in the coming year, over three in five (64%) felt that reports in the news of an improved economy did not reflect their current situation.

Despite feeling the squeeze, however, almost half (45%) of the business owners polled said that they would welcome an above-inflation rise in minimum wage as it would bring wages in line with living costs.

Sophie Christopher, spokesperson for Viking, commented on the research. She said: "Although we're seeing signs of economic recovery, SME owners still remain level headed with their approach, opting to tread cautiously rather than be too eager.

"While they're reluctant to issue pay rises, small business owners recognise that living costs are rising and welcome an increase in minimum wage."

In January this year, the Government announced proposals to raise the minimum wage to above-inflation costs, which was met with mixed reaction from hospitality businesses unsure about how it might affect their ability to pay staff competitive wages.

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.

close

Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking