Small firms faced a 14% rise in their wage bills at the end of last year, new research has found.
Though wider UK earnings growth has subsided recently, data from Sage’s small business tracker showed wage bills were still growing rapidly for small businesses.
Small and medium-sized enterprises faced a 13.8% jump in nominal wages over the last three months of last year, Sage found, compared to growth of 11.1% over the previous quarter.
Office for National Statistics data on Tuesday revealed UK-wide wages including bonuses increased by fell to 5.6% in the three months to January from 5.8% previously.
Small firms have had to battle to retain workers by offering big pay rises, despite a wider scaling back in overheads, according to Sage’s report.
“Following the pandemic, wage growth within small businesses - as all businesses - has picked up markedly,” the report said.
“This reflects the ongoing tightness of the UK labour market, where workers have gained increased bargaining power, as well as the increased cost of living.”
Tuesday’s ONS data showed a 43,000 reduction in the number of job vacancies over the quarter to January, leaving 908,000 roles unfilled across the UK.