Small and medium hospitality businesses do not yet feel ready to give staff pay rises despite the recently-reported improvement in the economy, according a new report.
The quarterly study, called the Viking Small Business Barometer, asked 1,000 small and medium business owners, including a percentage in hospitality, how they felt the current economic climate affected their business.
Over half (52%) said they felt the economy was still too sluggish to give pay rises, while 82% said they expected no increase in staff turnover in the next 12 months, and just 17% said they would look to recruit for new positions this year.
Although two in five (41%) said that their business had improved in the last three months (November 2013 - January 2014), and 76% anticipated more growth in the coming year, over three in five (64%) felt that reports in the news of an improved economy did not reflect their current situation.
Despite feeling the squeeze, however, almost half (45%) of the business owners polled said that they would welcome an above-inflation rise in minimum wage as it would bring wages in line with living costs.
Sophie Christopher, spokesperson for Viking, commented on the research. She said: "Although we're seeing signs of economic recovery, SME owners still remain level headed with their approach, opting to tread cautiously rather than be too eager.
"While they're reluctant to issue pay rises, small business owners recognise that living costs are rising and welcome an increase in minimum wage."
In January this year, the Government announced proposals to raise the minimum wage to above-inflation costs, which was met with mixed reaction from hospitality businesses unsure about how it might affect their ability to pay staff competitive wages.