Salaries have been frozen and pay rises have been delayed ahead of the rise in employers’ National Insurance Contributions (NIC), which came into force on Sunday, a new survey has found. More than a third of Midlands businesses (37%) have taken action on pay since the October Budget to prepare for the increase in both employers’ NIC and the National Minimum Wage (NMW). More than a third of regional businesses (34%) have also chosen to use contract workers instead of recruiting, with 28% imposing a full recruitment ban. More than a third of Midlands businesses (37%) have chosen an alternative route by introducing or enhancing salary sacrifice schemes. BDO’s Economic Engine survey of 500 mid-market businesses found that while some businesses have taken drastic action ahead of the changes, others are looking at ways to help retain and motivate staff in 2025, as costs increase within businesses. According to the BDO survey, 37% of regional businesses are exploring new awards schemes to improve employee engagement, with nearly a third (31%) looking at flexible working and 34% planning to introduce wellbeing programmes. Commenting on the survey findings, Steve Talbot, Head of Employment Tax at BDO in the Midlands, said: “The increases to employers’ National Insurance Contributions announced at the Budget, and the accompanying drop in the threshold at which NIC applies to employee earnings, have clearly forced many businesses in the region to take drastic action, freezing salaries and delaying pay rises, while also imposing full recruitment bans. “As our previous Economic Engine surveys have shown us, Midlands businesses are keen to explore other options, as a way of mitigating cost increases, while also helping to retain and motivate staff. Wellbeing, training, flexible working and award schemes rank highly, as business leaders try to think outside of the box when it comes to balancing two important factors – finances and staff.” Last week, the National Living Wage (for those aged 21 and over) also increased, rising by 6.7% to reach £12.21 per hour. Meanwhile, the NMW rates for those aged 18-20 increased by 16.3% to £10 per hour, while under 18s are now entitled to £7.55, up 18%. BDO has warned that businesses face a growing compliance risk with the new NMW rates in force from 1 April. If incentives such as pension or other salary sacrifice schemes push employees below the minimum wage floors, this could bring the risk of HMRC sanctions such as penalties of up to 200% and being named and shamed. Talbot said: “Those employers who have historically paid wages above the minimum levels may now find themselves in a position where they have to pay close attention to the rules to ensure they are NMW compliant. “There are a number of risk areas for employers to consider – notably around salary sacrifice, deductions for uniforms or accommodation, or memberships of savings clubs that could in certain circumstances tip them over the threshold into non-compliance. “All too often, we see household names appearing on the list of companies judged to have breached the NMW rules, many of whom are likely to have been tripped up on technicalities.”

The CEO of Staffline is “delighted” with the Nottingham recruitment group’s “outstanding performance in 2024,” he has announced in audited results for the year. The firm saw a 14% increase in revenue, from £871.3m in 2023 to £992.9m in 2024, due to market share gains and the increase in the National Living Wage. Meanwhile, underlying operating profit exceeding market expectations, growing to £10.1m from £7.2m, and gross profit increased to £70.8m from £64.2m. The business also reduced its losses with a loss after tax of £8.3m compared to £11m in the year prior, while pre-tax losses of £2.1m in 2023 turned into a £5m pre-tax profit. Looking ahead, Staffline noted that headwinds caused by the proposed increases in employers national insurance rates have reduced business confidence, causing caution about prospects for the year. Contributing to this caution are interest rate levels, which remain higher than anticipated. The firm, however, expects continued growth in essential workforce solutions offered by its blue-collar temporary recruitment service, “driven by a strong pipeline and good momentum in new business.” Trading is anticipated to remain in line with current management expectations for 2025. The results follow the £12m disposal of PeoplePlus in early 2025, to create a pure-play recruitment platform, underpinning further share buybacks and providing working capital for growth. Albert Ellis, Chief Executive Officer of Staffline, said: “I am delighted with Staffline’s outstanding performance in 2024, with the ongoing commitment of the Group’s staff and leadership team central to achieving these results, alongside tight control of our cost base. “In addition, our success in maintaining excellence in delivery over the crucial Pre-Christmas peak trading period in the food retailing and logistics sectors remains a key feature of our impressive financial performance. “There is no question that the recruitment market remains challenging but the combination of Staffline’s extensive scale and reach, market leadership and strong brand has ensured we continue to outperform in an uncertain market, remaining the trusted partner of choice. “Our strategy is now firmly focused on our recruitment activities, and the disposal of PeoplePlus allows us to dedicate greater focus and resources on continuing to deliver the organic growth strategy and accelerating value creation for our shareholders.”

Entrepreneurs Circle, a support network for UK small businesses, has secured £500,000 from the Midlands Engine Investment Fund II to expand its operations with a new training centre in Solihull.

The Birmingham-based organisation plans to move into a 15,000 sq ft facility, tripling its current space and creating a dedicated event and training centre for up to 100 entrepreneurs daily. The expansion is expected to generate 12 new jobs, adding to its existing 50-person team.

Entrepreneurs Circle runs monthly networking events in over 100 UK towns and provides marketing advice, coaching, and training to small business owners. In 2024, the group saw a 25% increase in membership and a 37% rise in revenue.

The funding comes via Frontier Development Capital, which manages the Midlands Engine Investment Fund II on behalf of the British Business Bank. The initiative aims to boost regional business growth and address access-to-finance challenges for SMEs.

Two Chicks, a Kettering-based producer of liquid egg whites, has sold a majority stake in its business to Eurovo Group for an undisclosed amount. The deal will enable Two Chicks to access Eurovo’s extensive resources to support its growth and expansion.

Founded in 2007 by Anna Richey and Alla Ouvarova, Two Chicks was the first company to introduce liquid egg whites into the UK retail market, creating a new product category. The company has become a market leader, doubling its turnover in the past two years.

Eurovo, one of Europe’s largest egg producers, has partnered with Two Chicks since 2015. In 2024, the Italian family-owned company reported approximately €1.25 billion in revenue and serves around 5,000 customers across over 40 countries.

Two Chicks products are available in major UK supermarkets such as Tesco, Sainsbury’s, and Lidl, and the brand has expanded its reach to international markets, including France, the Netherlands, Luxembourg, and the UAE. The acquisition will allow Two Chicks to broaden its product range, enter new markets, and strengthen its international presence.

The founding team, led by Richey and Ouvarova, will remain with the business and continue as shareholders. They will work closely with Eurovo to drive innovation and achieve shared growth objectives.