BICS weighted Scotland estimates: data to wave 127

Employment costs

In the period 17 February to 2 March 2025 (Wave 127), businesses that had not permanently stopped trading were asked how their staffing costs had changed over the last three months. For more than half of businesses, (an estimated 53.4%), staffing costs stayed the same. Costs increased for around a third of businesses (an estimated 33.8%) and decreased for 5.6%.

Businesses were also asked how they expected staffing costs to change in the next three months.

Figure 1: An estimated 67.9% of businesses are expecting staffing costs to increase in the next three months, rising to an estimated 80.3% of businesses in the Accommodation & Food Services sector.

Estimated share of businesses by expected change in staffing costs in next 3 months. Businesses not permanently stopped trading, with 10+ employees and a presence in Scotland. Wave 127 – 17 February to 2 March 2025.

Source: BICS weighted Scotland estimates - data to Wave 127 from the Scottish Government. For Figure 1 data see table ‘StaffingCostsExpect’.

The share of businesses expecting staff costs to increase in the next three months has increased by 30.5 percentage points since late November 2024; increases in employer National Insurance (NI) contributions and the national living wage in April 2025 may be influencing this.

Small to medium-sized businesses (10 to 249 employees) were more likely to expect staffing costs to increase in the next three months than large businesses (250 or more employees). An estimated 69.5% of small to medium-sized businesses expected costs to increase, compared with 52.9% of large businesses.

Businesses were also asked how they planned to adapt to future changes in employment costs. The specific question is shown below.

How does your business plan to adapt to any future increases in employment costs?

• Absorb within profit margins
• Increase prices
• Limit overtime hours
• Reduce employee benefits
• Reduce number of employees
• Reduce spending on investment
• Reduce spending on training
• Reduce wage increases for other employees
• Other
• Not sure
• Not applicable

Figure 2: An estimated 48.8% of businesses plan to increase prices to adapt to any future rises in employment costs, the most common response.

Estimated share of businesses by employment costs adaptation plans. Businesses not permanently stopped trading, with 10+ employees and a presence in Scotland. Wave 127 – 17 February to 2 March 2025.

Source: BICS weighted Scotland estimates - data to Wave 127 from the Scottish Government. For Figure 2 data see table ‘EmploymentCosts’.