Recent Office for National Statistics (ONS) figures highlighting a continued cooling of the labour market highlight the mounting pressures facing UK businesses, making expert payroll support increasingly crucial for companies navigating the current economic waters.
The ONS data revealed that payroll numbers fell to their lowest level since October 2023, with staff numbers declining by 164,000 in July compared with the same month last year, taking the total to 30.3 million. Job vacancies have now fallen for the 37th consecutive month to 718,000, whilst wage growth has slowed to 4.6 per cent in the second quarter.
Liz McKeown, director of economic statistics at the ONS, noted that:
“These latest figures point to a continued cooling of the labour market,” with falls concentrated in hospitality and retail sectors.
The challenging environment has been compounded by rising employer costs, including increased National Insurance contributions and jumps in the national living wage from April. Lower-paid retail, hospitality and leisure sectors have borne the brunt, accounting for more than 80 per cent of workforce losses since October.
For businesses struggling with these pressures, maintaining payroll compliance whilst managing costs has become more complex than ever.
Tracy Gill, Payroll Manager at Whitley Stimpson, said:
“The current economic climate makes it even more critical for businesses to ensure their payroll is managed correctly. With employment legislation constantly evolving and cost pressures mounting, there’s little room for error.
“We’re seeing increased demand from businesses who recognise that payroll is very specialist – you have to understand employment law along with payroll legislation. If you’re a small business facing these challenges, you’re not going to have that level of expertise to process it whilst also focusing on your core operations.”
Tracy added:
“There are things businesses might not be aware of, such as salary sacrifice schemes and deductions, that can have an impact on minimum wage and may result in non-compliance. In the current environment, businesses simply cannot afford to get this wrong.”
Recent Government admissions that there is “more to do” on jobs highlight the ongoing challenges facing UK employers. With the Bank of England warning that unemployment could peak at 4.9 per cent in the coming months and consumer prices are expected to hit 4 per cent later this year, businesses need reliable support to navigate these uncertainties.
Whitley Stimpson’s payroll service provides businesses with dedicated expertise to handle the intricate details of tax filings, pension auto-enrolment deductions, and employee benefits, ensuring compliance whilst allowing business owners to focus on core operations during challenging times.
Tracy concluded:
“Outsourcing your payroll is a sensible option designed to help you get on with running and developing your business effectively without worrying about its administration, particularly vital during these uncertain economic times.”
For further information please contact Tracy Gill: tracyg@whitleystimpson.co.uk or 01295 270200.