According to research by Yorkshire Bank, nearly one in five SMEs (17%) will invest additional funds into hiring new staff over the next year.
31% of SMEs will also invest more money into staff training to support their belief that skilled people are the key to innovation, creativity and business growth.
Simon Wright, regional director for business and private banking at Yorkshire Bank in the North East, said: “We know businesses are investing in their most precious assets – their people.
“Having the right people and skills is a big issue for businesses to manage as our economy shifts from one of traditional manufacturing to being knowledge led.
“It’s crucial for all businesses to be equipped with talented, creative and innovative people to drive innovation and growth.
“There are many benefits brought about by raising basic salaries – improved staff retention, increased productivity and staff satisfaction.
“While businesses will need to manage this increase in costs in what is already a competitive, albeit growing, economy, there is support available both in terms of funding and advice.”
The research also highlights however, that 71% of SMEs believe the introduction of the National Living Wage in 2016 will lead to an increase in staff costs.
One in five SMEs (19%) expect their salary costs to go up by as much as 10% as a result of the National Living Wage introduction.
As of April, employers will be required to pay all staff over the age 25 a National Living Wage of £7.20 an hour – a 50p increase on the current national minimum wage of £6.80 - rising to £9 in 2020.
One in three SMEs (29%) thinks the National Living Wage will have no impact on their salary costs at all.
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