James Cronin, a director at the West Midlands based Jarell Group has warned that the cost-of-living crisis and National Insurance rise will put unprecedented pressure on businesses and their recruitment plans. The alert has come as the Chancellor confirmed the 1.25% National Insurance rise in his recent Spring statement. Cronin says companies will have to fork out potentially thousands of pounds more to secure the best candidates. However, he is also suggesting that the rate hike risks losing businesses to mainland European markets.
“We are dealing with clients that cannot pay in line with some of larger businesses and multinationals that have increased their pay offering to meet the market,” he said. “This means that they are struggling to fill roles.
“The additional 1.25% paid on National Insurance from April will only compound the increased living wage impact. For example, with a workforce of 100 employees, business owners are looking at an additional cost of tens of thousands of pounds. That just isn’t sustainable.
“More than anything, the government needs to urgently stop taking the easy route and blindly loading costs onto businesses to avoid the catastrophe of a mass of UK jobs being outsourced abroad causing a world of people to come crashing into the welfare state with outgoings that cannot be met by anything close to the benefit levels received by the unemployed today.”
At the same time, Cronin is upbeat about some aspects of the economy: “The good news, however, is that things are improving,” he says. “As we learn to live with Covid and the new relationship we have with our neighbours abroad, confidence is improving and the candidate pool is emerging back into the market.
“This is great news in the short term for businesses to get order books satisfied and start to head towards those growth targets rather than downgrading plans to accommodate. The long-term sustainability of the situation, however, is well and truly in the Government’s hands.”
The Jarell Group was founded nearly 30 years ago and has since gone on to become a trusted workforce solutions provider for hundreds of businesses across the UK.
