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Boost for staff as two-thirds of firms say they will raise wages

TWO-thirds of Scottish ­businesses are set to raise wages this year as the recovery from the economic downturn begins to pick up pace, according to a survey.

ALLY SCOTT: Business in Scotland have taken a more optimistic view.
ALLY SCOTT: Business in Scotland have taken a more optimistic view.

More than half of the companies who took part in the study said they were confident about their chances for growth in 2014, with 66% intending to bring an end to years of wage freezes and boost workers' pay.

Widespread pay rises would be another important economic signal that the worst of the financial crisis is now in the past, and follows recent reports that show house prices are also starting to rise again.

According to figures in the Barclays Employers Survey 2014, Scottish firms are the most likely to be considering increasing workers' pay in the UK, along with those in the London & South East area.

However, the survey also found the 'keep calm and carry on' spirit is thriving among Scottish workers. Just a third of firms said that pressure from workers who were concerned about the rising cost of living led to them considering raising pay levels.

Ally Scott, managing director of Barclays Corporate Banking for Scotland & Northern Ireland, said: "After an extended period of wage freezes, which have been tough for employees, it is good to see so many employers will be increasing wages in the coming year.

"Businesses in Scotland have taken a more optimistic view compared with the rest of the UK. This can only have a positive impact on employee morale."

Business leaders in Scotland said the figures matched their own research, and that there was now a feeling of optimism spreading among many firms.

Stuart Mackinnon, a spokesman for the Federation Of Small Businesses In Scotland, said: "Our research suggests Scottish small businesses are planning to increase their staff numbers and boost capital investment during 2014. Further, UK-wide FSB figures from the end of last year, as well as anecdotal evidence, suggests some firms plan pay increases this year."

Laura McMahon, senior policy executive for CBI Scotland, added: "These findings echo what we have seen in our Scottish Industrial Trends Survey last week with business optimism rising for the third consecutive quarter.

"After a long period where many businesses have frozen wages it is encouraging to see confidence returning and businesses looking at increasing wages."

The report also shed light on firms' attitudes to the recent turmoil in the eurozone, which saw several countries forced to rely on massive bailouts from central banks as they drifted perilously close to defaulting on their debts.

One-third of the Scottish firms said they thought the worst effects of the crisis had now passed, although fears over the future of the euro remain, with one in five firms believing there is more bad news on the horizon.

The survey also laid bare Scots business leaders' belief in the power of having cash in the till, with 85% - the highest rate in the UK - saying that sales increases would led to job creation, rather than believing job creation can drive sales.

Meanwhile, there was good news for staff who work casual hours, with the vast majority of businesses saying they will not be using zero hour contracts this year.

The contracts mean workers do not fix set hours and work shift patterns when they are needed, meaning they do not receive sick pay or enjoy a set working routine.

However, the report sounded a note of caution to firms over any wage increases, saying it could lead to a rise in inflation and possibly trigger an increase in interest rates.

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