Changes to employment legislation have saddled around four in five businesses with rising costs, a survey has suggested.
Firms are under increased pressure during an uncertain time, business leaders have warned, as they urged the Government not to bring in any new upfront costs or taxes.
Pensions auto-enrolment, the National Living Wage and the Apprenticeship Levy have contributed to higher costs for businesses, the annual workforce survey by the British Chambers of Commerce (BCC) found.
Of the 1,461 businesses asked across the UK half said the increased living wage had bumped up their costs, while three-quarters reported that pensions auto-enrolment had added to costs.
Jane Gratton, head of business environment and skills at the BCC, said: "Businesses are under increasing pressure from the burden of employment costs, and this will influence the choices they make and outcomes for employees.
"Higher employment costs impact on the bottom line and reduce the resources available to invest in the business and its people."
She appealed to the Government to " ensure that there are no upfront further costs or taxes on businesses and entrepreneurs for the remainder of this parliament".
David Williams, director of corporate engagement at Middlesex University London, a partner in the survey, said firms were facing a challenging time in a competitive market.
He said: " We need to up our productivity to enable us to compete globally in a post-Brexit Britain, so it is important when making difficult choices, the development, upskilling and retention of the workforce is high on the list of investment priorities and that businesses get the support they need to do this."
:: The BCC surveyed 1,461 businesses from all regions of the UK online from 17 July to 1 August this year.