Employers are too keen on the easy way to absorb the National Insurance rise, survey findings by the UK’s national broadcaster seem to suggest.
The BBC surveyed an unspecified number of companies to find out how they would cope with the change from paying 13.8 per cent on salaries of £9,100 or more, to 15 per cent on wages of £5,000 or more:
BBC Breakfast’s questionnaire asked employers to choose from a list of actions they would take to manage increases in NICs.
Businesses most frequently told us they would choose a combination of these things.
But these are the easy decisions.
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Commentators like This Site are constantly criticising government for calling choices “tough decisions” when they aren’t, so I think it is right to point out when employers do exactly the same. This is one such time.
Businesses could explore multiple alternative strategies to manage increases in NI contributions without resorting to price hikes, hiring freezes, profit margin reductions, or job losses:
For a start, they could try boosting productivity – investing in technology and automation to streamline operations and reduce costs; enhancing employee training to improve efficiency and output; and refining internal processes to eliminate waste and redundancy.
They could change the way they pay people – offering more performance-based pay or bonuses instead of salary increases and/or expanding non-monetary benefits (flexible work arrangements, additional leave) to maintain employee satisfaction without increasing direct payroll costs.
They could cut non-essential expenses – reducing spending on non-critical areas like travel, office space (Working From Home, anyone?), and marketing; and negotiating better deals with suppliers and service providers.
They could turn the tables on the government by exploring tax reliefs and incentives – utilizing government tax reliefs, such as research and development tax credits, to offset increased costs; and reviewing their business structure for tax efficiency. (This may be criticised as tax avoidance but if the government isn’t willing to tackle it, what does the government expect?)
They could diversify – expanding product or service offerings to generate additional income and/or entering new markets or leveraging digital channels for increased sales.
And they could even encourage employees to take part in cost-saving measures – engaging staff in cost-saving initiatives to identify inefficiencies and/or implementing voluntary flexible work arrangements to reduce overhead costs.
These strategies would require effort and investment – which is probably why employers are shying away from them.
But if they can help businesses absorb higher NI contributions without resorting to negative financial impacts on customers, employees, or profits, shouldn’t they at least be tried?
Carping about the government’s attempts to solve a situation it did not make will do no good at all.
It’s time for UK businesses to show the initiative that once made us the best in the world. Or have we all become too complacent?
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Employers are too keen on the easy way to absorb the National Insurance rise
Employers are too keen on the easy way to absorb the National Insurance rise, survey findings by the UK’s national broadcaster seem to suggest.
The BBC surveyed an unspecified number of companies to find out how they would cope with the change from paying 13.8 per cent on salaries of £9,100 or more, to 15 per cent on wages of £5,000 or more:
But these are the easy decisions.
Buy Cruel Britannia in print here. Buy the Cruel Britannia ebook here. Or just click on the image!
Commentators like This Site are constantly criticising government for calling choices “tough decisions” when they aren’t, so I think it is right to point out when employers do exactly the same. This is one such time.
Businesses could explore multiple alternative strategies to manage increases in NI contributions without resorting to price hikes, hiring freezes, profit margin reductions, or job losses:
For a start, they could try boosting productivity – investing in technology and automation to streamline operations and reduce costs; enhancing employee training to improve efficiency and output; and refining internal processes to eliminate waste and redundancy.
They could change the way they pay people – offering more performance-based pay or bonuses instead of salary increases and/or expanding non-monetary benefits (flexible work arrangements, additional leave) to maintain employee satisfaction without increasing direct payroll costs.
They could cut non-essential expenses – reducing spending on non-critical areas like travel, office space (Working From Home, anyone?), and marketing; and negotiating better deals with suppliers and service providers.
They could turn the tables on the government by exploring tax reliefs and incentives – utilizing government tax reliefs, such as research and development tax credits, to offset increased costs; and reviewing their business structure for tax efficiency. (This may be criticised as tax avoidance but if the government isn’t willing to tackle it, what does the government expect?)
They could diversify – expanding product or service offerings to generate additional income and/or entering new markets or leveraging digital channels for increased sales.
And they could even encourage employees to take part in cost-saving measures – engaging staff in cost-saving initiatives to identify inefficiencies and/or implementing voluntary flexible work arrangements to reduce overhead costs.
These strategies would require effort and investment – which is probably why employers are shying away from them.
But if they can help businesses absorb higher NI contributions without resorting to negative financial impacts on customers, employees, or profits, shouldn’t they at least be tried?
Carping about the government’s attempts to solve a situation it did not make will do no good at all.
It’s time for UK businesses to show the initiative that once made us the best in the world. Or have we all become too complacent?
Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:
Be among the first to know what’s going on! Here are the ways to manage it:
1) Register with us by clicking on ‘Subscribe’ (bottom right of the home page). You can then receive notifications of every new article that is posted here.
2) Follow VP on Twitter @VoxPolitical
3) Like the Facebook page at https://www.facebook.com/VoxPolitical/
Join the Vox Political Facebook page.
4) You could even make Vox Political your homepage at http://voxpoliticalonline.com
5) Follow Vox Political writer Mike Sivier on BlueSky
6) Join the MeWe page at https://mewe.com/p-front/voxpolitical
7) Feel free to comment!
And do share with your family and friends – so they don’t miss out!
If you have appreciated this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!
Buy Vox Political books so we can continue
fighting for the facts.
Cruel Britannia is available
in either print or eBook format here:
The Livingstone Presumption is available
in either print or eBook format here:
Health Warning: Government! is now available
in either print or eBook format here:
The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:
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