Summer jobs sizzle out as wages heat up

London, 11 August 2025 – The traditional summer hiring surge is much slower this year than previous years, according to Employment Hero’s latest Jobs Report, which analyses employment and wage data for 105,000 workers at UK small businesses. 

The report shows that UK employment grew by 2.7% year-on-year in July, a sharp decrease from the 8.3% growth seen in the same period in 2024. This slowdown signals a cooling of the summer job market as businesses grapple with higher labour costs.

Despite slower job growth, wages continue to rise. Salaries increased by 2.7% year-on-year in July, a noticeable jump from the 0.7% growth recorded in July 2024. This increase in pay comes as employers contend with inflationary pressures which is leading to higher wage offers to attract and retain workers.

Gen Z sees the biggest wage jump

Wage growth is particularly pronounced among younger workers, with Gen Z (aged 18-27) seeing the largest increase. Gen Z wages grew by 5.6% year-on-year in July, the highest of any age group. This surge is likely attributed to National Minimum Wage increases, which have impacted younger workers more significantly.

While higher wages are beneficial, they also pose challenges. The data suggests a shift in the labour market, as companies face difficulty balancing the need to attract talent with the rising cost of wages.

For jobseekers, particularly Gen Z, this means higher pay but potentially fewer opportunities compared to previous summers.

Commenting, Kevin Fitzgerald, UK Managing Director at Employment Hero, said:

“This summer slowdown highlights the growing challenges small businesses face. While wage growth is encouraging, especially for younger workers, the slowdown in job growth shows the pressure employers are under from rising costs. Higher wages may help attract talent, but they also limit businesses’ ability to hire more staff. We’re at a critical juncture. To sustain positive growth, we need to make hiring easier for small businesses and avoid policies that could prompt reactionary measures. But with another Autumn Budget looming, is this the calm before the storm? Only time will tell.”