Privately-owned businesses will have no choice but to make job cuts and lower wage settlements in order to shoulder the bill for rising payroll costs. This will make employees the real victims if employers’ three percent pension contributions become compulsory.

According to Richard Smith, an employment services director at Croner, a leading UK employment law advisors, under the new proposals he believes that employers will be faced with a “lose-lose” situation. He said that employers will not only have to make significant efficiency cuts to bridge the pensions gap, there is also no firm evidence that promoting pension contributions will have any positive effects on recruitment, retention and motivation.

Company formation and business solutions experts are hoping that there will be an equitable solution to these concerns that would benefit both employers and employees.

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