Employment costs
In the period 19 May to 1 June 2025 (Wave 133), businesses that had not permanently stopped trading were asked how their staffing costs had changed over the last three months.
Figure 1: More than three quarters (77.1%) of businesses experienced increased staffing costs in the last three months, rising to an estimated 89.7% of businesses in the Accommodation & Food Services sector.
Estimated share of businesses by change in staffing costs in the last 3 months. Businesses not permanently stopped trading, with 10+ employees and a presence in Scotland. Wave 133 – 19 May to 1 June 2025.
Source: BICS weighted Scotland estimates – data to Wave 133 from the Scottish Government. For Figure 1 data see table ‘StaffingCosts’.
At 77.1%, the percentage of businesses that experienced increased staffing costs in the last three months is the highest since the question was first asked in April 2022, and is around 20 percentage points higher than in May 2024. This is likely to be linked to the increases in employer National Insurance (NI) contributions and the national living wage that came into effect in April 2025.
Small to medium-sized businesses (10 to 249 employees) were more likely to have seen increases in staffing costs than large businesses (250 or more employees). An estimated 78.7% of small to medium-sized businesses saw higher staffing costs in the last three months, compared with 61.8% of large businesses.
Businesses were also asked about their expectations for staffing costs in the next three months. An estimated 42.6% of businesses were expecting staffing costs to increase. This is around 25 percentage points lower than the percentage that expected increases when asked in February 2025.
Small to medium-sized businesses were more likely to expect staffing costs to increase in the next three months than large businesses. An estimated 44.5% of small to medium-sized businesses expected costs to increase, compared with 25.5% of large businesses.
Businesses were asked how they planned to adapt to future changes in employment costs.
Figure 2: 45.0% of businesses plan to increase prices to adapt to any future rises in employment costs, the most common planned adaptation.
Estimated share of businesses by employment costs adaptation plans. Businesses not permanently stopped trading, with 10+ employees and a presence in Scotland. Wave 133 – 19 May to 1 June 2025.
Source: BICS weighted Scotland estimates – data to Wave 133 from the Scottish Government. For Figure 2 data see table ‘EmploymentCosts’.
