The reluctance to make pay increases for staff a priority is despite the fact that 72% anticipate seeing growth in the next three months say Harris & Co accountants Northampton

Although 49% of the sample acknowledge that business has improved between November 2013 and January this year, 43% maintain that reports of a recovery are not reflective of the real situation in their sector.

Viking’s research with some 1000 SMEs also shows that 92% predict that they will not see a higher turnover of staff this year as the country moves away from recession, and just 17% said they are planning to recruit for new positions this year.

When asked whether they feel the need to provide other incentives where pay rises are not a feasible option, 32% said they provide flexible working as an alternative, and 45% would welcome an above inflation rise in minimum wage.

Sophie Christopher at Viking said: ‘Although we’re seeing signs of economic recovery, SME owners still remain level headed with their approach, opting to tread cautiously rather than be too eager.’