The research, conducted by the Federation of Small Businesses (FSB) shows that less than a quarter (23 per cent) of small firms have any staff on minimum wage, down from 27 per cent in 2012. 

The FSB also found that 49 per cent of small firms already pay all their staff at or above the Living Wage. The research shows that most small business owners will look to increase wages where they can afford to do so, and share the benefits of growth where possible. 

“With confidence returning to small businesses after a period of wage restraint, our research shows our members are looking to pass on any extra profits to their staff, including those on low pay,” says John Allan national chairman of the FSB.

The findings come off the back of further positive results from the FSB’s Small Business Index published last week. It reported that 15 per cent of small firms have increased their staff numbers in the third quarter of 2013 – the highest figure reported since the Index began in 2010 and reflects recent improvements in business confidence. 

“Our findings also show that small businesses are already playing their part in the economic recovery by employing more staff and paying them more where possible. Small businesses are competing for good quality staff in the labour market and pay and benefits are a big part of this,” adds Allan.

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