Jessica O'ConnorIncreased operating costs are expected to be the most significant challenge facing businesses over the next 12 months, according to research from GRiD.
The survey found 45% of HR leaders identified rising expenses – including staffing and utility bills – as their primary concern, with the figure rising to 60% among micro businesses.
General pressures associated with running a business, such as maintaining profitability and developing propositions, were the second most frequently cited challenge at 37%, followed by keeping pace with new technology and skills (34%) and changes to legislation and employment law (34%).
Traditional workforce issues ranked lower, with 31% highlighting recruitment and 26% retention as key concerns.
Managing a hybrid workforce and managing staff were each cited by 24% of respondents.
Katharine Moxham, spokesperson for GRiD, said cost pressures were closely linked to employers’ responsibilities to staff.
She said: “At the heart of many of the challenges that lie ahead for employers is the responsibility they feel towards their people, from ensuring compliance with employment legislation to managing the increased costs associated with supporting and protecting staff.”
Additional concerns included higher employer National Insurance contributions introduced last year (20%) and forthcoming changes to Statutory Sick Pay due in April 2026 (18%).
GRiD said employers are increasingly focused on ensuring value from workforce spending, particularly benefits related to health and wellbeing, as organisations seek to balance cost control with maintaining an engaged and productive workforce.
Moxham added: “Organisations must remain cognisant of the full cost of employment, extending beyond salaries to include the broader investment required to support their workforce.
“In addition, that cost must deliver value for money, ultimately in profitability for the company via a supported workforce that’s present, engaged and productive.”
