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Half Scots firms say 'no impact' on costs

Small firms still hiring despite national living wage

Alastair ChristmasThe new national living wage will not deter small firms from hiring in 2016, despite warnings from business leaders that it will add significantly to costs.

Almost a third of Scottish SMEs (31%) told a survey that they will invest additional funds into hiring staff in the next 12 months.

From April employers will be required to pay all staff over the age of 25 a national living wage of £7.20 an hour – a 50p increase on the current national minimum wage of £6.80. By 2020 this will rise to £9 an hour.

More than half (54%) of small and medium sized businesses polled by Clydesdale Bank believe it will lead to an increase in staff costs. Three in 10 SMEs (30%) expect their salary costs to go up by as much as 10%.

In Scotland, 46% think the national living wage will have no impact on their salary costs at all. Across the UK however, the belief that salary costs will increase is most acutely felt in businesses with between 50 and 100 employees, suggesting larger enterprises (100+ employees) may be able to absorb increased wage bills.

It also suggests the national living wage may not have as much of an impact on micro businesses and sole traders, which make up around three quarters of all businesses in the UK.

Alastair Christmas (pictured), regional director for business and private banking at Clydesdale Bank in Scotland, said: “We know businesses are investing in their most precious assets – their people.

“Having the right people and skills is a big issue for businesses to manage as our economy shifts from one of traditional manufacturing to being knowledge led. It’s crucial for all businesses to be equipped with talented, creative and innovative people to drive innovation and growth.”

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