Majority of travel firms expect wage increases in 2014

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Almost three quarters (72%) of businesses in the travel sector are planning to increase wages in the year ahead.

The potential for pay increases comes from a survey by Barclays which found that 60% of travel companies are more confident about the UK economy than they were at this time last year.

More than half (52%) of businesses in the travel sector expect to increase full/part time staff levels over the next 12 months.

The Barclays Employers Survey 2014 of 684 businesses across all sectors shows a consolidation of numbers for senior management hires, 13%, the same as in 2013.

There has been a rise in the number of employers looking to recruit at middle/junior management/skilled levels at 85% (2013:81%), and also in the number looking to increase jobs at the low and unskilled workers level – 46%, up from 43% last year.

When asked (prior to last week’s falling unemployment announcement) at what point they thought unemployment would drop far enough to trigger an interest rate rise, travel companies (60%) were most likely of the sectors questioned to think that would be by the end of 2015, while 12% said during 2014. Just over one in ten (12%) thought it would be in 2016.

Barclays head of travel Chris Lee said: “As confidence returns to the sector, it is encouraging to see that businesses are looking to continue recruiting across the company which is key to delivering business growth. This demonstrates that travel businesses are determined to drive the business strategy forward at all levels.

“However, turning to wage rises reported in the survey, whilst they are no doubt welcome news to employees, they will increase inflationary pressure as the year progresses.”

Key findings in the travel sector include:

• 16% of businesses have taken on apprentices over the past year and 23% are looking to take on apprentices in 2014.
  
• 30% are likely to hire freelancers/contractors in the next 12 months with the main reason for doing so being for a particular skill 77%, and 23% of employers believing they are more flexible.
  
• 61% of businesses are struggling to get sufficient skilled labour.

The vast majority of travel businesses (77%) will not be creating zero hour contracts this year, although 16% plan to do so.

Survey findings across all business sectors:

• Despite rising living costs, the majority of respondents (52%) said that wage pressure from employees was not an issue, with 30% saying it was a concern to some extent and 17% citing it as a major concern.
  
• A third of respondents (33%) think the eurozone crisis is behind them. Nearly half (47%) say it is neither any worse nor any better, while 16% think it is ahead of them.
  
• 71% of businesses still believe sales increases lead to job creation, rather than believing job creation can drives sales, however this is a downward trend over the past four years (2013: 73%, 2012: 77%, 2011: 78%).