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Several employers have already raised concerns and are now looking for other ways to cut wage bills, including reducing overtime and bonuses, and cutting employee benefits.
The NFDA believes that employees must be properly rewarded and it is concerning that businesses looking for ways to counterbalance this rise in costs can resort to job losses or reducing staff working hours.
The average salary for permanent staff in the UK decreased by 3.4% overall and by 8.9% in sectors such as retail, according to data from jobs site CV-Library. Moreover, temporary and contract staff at employment agencies reached a 13 month high in April as the latest figures from the Recruitment and Employment Confederation have revealed.
The NFDA is concerned with the impacts that this is having and will continue to have on businesses. It can be challenging, in particular for small businesses, to grow and to cope with these changes, especially in a long term perspective.