The Close Brothers business barometer today revealed that nearly three quarters (72%) of SMEs in the transport sector welcome the new UK National Living Wage which came into force on April 1, 2016.
The new rate of £7.20 per hour for workers aged over 25 is a rise of 50p on the current national minimum wage.
The quarterly survey of UK SME owners and senior management from a range of sectors also revealed that just under a fifth (18%) of SMEs in the transport sector believe that the change to the National Living Wage will cause an increase in productivity within their business.
John Fawcett, managing director of the Transport Division at Close Brothers Asset Finance, said: “Two years ago, when we last asked SMEs in the transport sector what they thought about the National Living Wage, nearly two thirds were in favour of the concept. It is therefore encouraging to see that the closer it got to implementation, the more support it garnered, and now thousands of workers across the country stand to benefit from the initiative.”
However, despite this widespread support, over a fifth (22%) of businesses in the transport sector say they will be adversely affected by the National Living Wage.
To offset the increase in staff costs, just under half (46%) of these firms maintain they will have to reduce their costs in other areas and just under half (46%) say they require an increase in income.
Fawcett added: “There will always some businesses (8%) that oppose these kinds of changes because many small firms operate on tight budgets, so it is understandable that they might feel even more stretched having to boost the wages of their workforce.
“While the Government is cutting taxes to help with the transition, it is important that SME bosses make sure they have the right financial support in place if money is an issue – and this could be anything from having an emergency overdraft buffer on a current account or a flexible financing facility in place.”