More than half of small business owners in retail say they are not ready to give their staff pay rises, despite an upturn in the economy, according to office supplies firm Viking.
According to the quarterly Viking Small Business Barometer, 57% of small business owners and managing directors in the retail sector believe the economy is still too sluggish and are looking to hold onto as much capital as possible.
Despite 42% acknowledging that business has improved over the last three months (November 2013 – January 2014), and 67% anticipating growth in the next three months, 52% remain adamant the reports are not reflective of the real situation in their sector.
Sophie Christopher at Viking 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. Managing directors are starting to become more optimistic about their future and with many seeing growth in the pipeline, hopefully the current positive reports about the economy will become a true reflection of the state of their business.”
Other findings from the latest instalment of the Viking Small Business Barometer revealed 92% of respondents predict that they will not see a higher turnover of staff this year as the country moves away from recession. When asked whether they feel the need to provide other incentives where pay rises are not a feasible option, 30% said they provide flexible working as an alternative.
Furthermore, across the UK 45% of SMEs have stated they would welcome an above inflation rise in minimum wage proposed by cabinet ministers, saying that it will help to bring employees’ wages in line with living costs. Just 17% of small businesses are planning to recruit for new positions this year.
The Viking Small Business Barometer is a tracker survey which speaks to the same 1,000 small business owners and managing directors across 15 sectors in the UK every quarter, in order to understand the thoughts and outlook of the country’s small businesses, which employ 14.1m in this country and are seen as the key to economic recovery.
Last quarter’s research revealed 42% of small businesses said zero-hours contracts were unfair, despite the fact 30% admitted to using them on their staff, while two thirds (60%) also anticipated growth in 2014.