Small and medium-sized businesses recorded a strong rise in employment representing a “surge in confidence”, according to data from Employment Hero.
The provider’s September jobs report, based on data from more than 100,000 real-time employee records, found that total employment rose 2.6 percent month-on-month, marking the highest increase in 13 months. Year-on-year, employment growth reached 2.7 percent, up from 1.6 percent in August.
The rise comes despite ongoing economic uncertainty and anticipation of potential tax changes in the upcoming Autumn Budget. Full-time roles led the recovery, climbing 2.1 percent month-on-month and 5 percent year-on-year, while part-time and casual positions increased by 1.2 percent and 2.2 percent respectively. The data suggests employers are prioritising longer-term staffing stability over short-term flexibility.
Younger workers continue to play a key role in the rebound. Gen Z employment rose 2.8 percent month-on-month and 8.3 percent year-on-year, the strongest increase across all generations.
However, the report also highlights longer-term challenges. September’s year-on-year rise of 2.7 percent is down sharply from 8.5 percent in September 2024, suggesting that while confidence is returning, the broader jobs market remains subdued.
Rising inflation is also adding to the pressure on employers. Average pay increased 3 percent month-on-month and 2.2 percent year-on-year, but wage growth continues to lag behind inflation, meaning real wages have yet to show meaningful improvement.
Kevin Fitzgerald, UK managing director at Employment Hero, said: “Our latest data gives reason for cautious optimism in the UK jobs market. Early signs of recovery are holding up, even amid ongoing economic uncertainty. That said, year-on-year comparisons show there’s still plenty of ground to make up.
“With the Autumn Budget around the corner, businesses are bracing for impact. Talk of tax hikes has been relentless and many now see them as inevitable. Despite that, small businesses, resilient as ever, are proving they’re not giving up, with employment nudging steadily higher as we head into November.
“The government has a real chance to restore business confidence and recognise this resilience with the Budget. Steering clear of tax changes that could stifle long-term investment will be key if we want to unlock the full potential of the UK jobs market.”
