50% of businesses unsure of wage hike impact
By Tom Wright70% of businesses support the increase in the National Living Wage (NLW) but just half expect it to improve output, according to the latest research from Close Brothers
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On 1st April, the NLW will increase by 50p to £7.20 for workers who are aged 25 and over, but the quarterly Close Brothers Business Barometer found that only 50% of firms expect to see a measurable increase in productivity.
The Regulatory Policy Committee estimates the rise will cost companies £804.4m in extra wages.
When asked how they plan to offset this increase, 51% of firms said they would do so by reducing costs, with just 6% saying they would turn to funding as a solution.
David Thomson, Chief Executive at Close Brothers Invoice Finance, said: “Rather than making cuts in other areas or raising prices in order to combat a rise in overheads, UK SMEs should look to alternative finance solutions, such as invoice finance, in order to remain competitive and to keep cash flow healthy.
"The National Living Wage will have a massive impact on SMEs.
“In order to be prepared for this, businesses need to look at a range of options in order to remain competitive and maintain a healthy cash flow."
Invoice finance is used by more than 44,000 businesses across the UK.
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