More British employers are predicting staffing costs to rise, according to data released 6 March by the UK Office for National Statistics.

Its research found that 67% of British firms with 10 or more employees believe their staffing costs will rise over the next three months. The firms were surveyed in February, and the resulting number is up from 41% in a similar survey in late November 2024.

Staffing costs include wages, bonuses, national insurance and pension contributions. Employers in the February survey noted that increases in employer National Insurance contributions and the national living wage coming up in April were contributing factors to their expectations that costs will rise.

The February survey also asked whether staffing costs increased over the preceding three months. More than a third, 36%, said staffing costs had increased.

The same research by the ONS also found that 31% of UK businesses with 10 or more employees experienced difficulties recruiting employees in January. That’s roughly in line with the 32% that cited difficulties in the October 2024 study.

Of businesses reporting difficulty in recruiting employees, 50% reported a lack of qualified candidates, and 24% said they cannot offer an attractive pay package.

ONS’ study also found that 59% of businesses with 10 or more employees in February reported they had not experienced any challenges as a result of worker shortages. This is down from 62% in the November study.

The full report is available online.