Two consecutive months of job losses following Budget

– Employment Hero’s SmartMatch employment report of 90,000 UK employees shows employment shrunk for the second consecutive month in December.
– Full-time employment at SMEs was down 1.7% in November and 0.1% in December.
– Youngest employees and healthcare workers seeing the biggest retraction.
– The Government’s jobs tax hurting economic growth months before implementation.

5 January 2025, Full-time employment continues to go backwards following the Government’s disastrous decision to go after employers in its budget.

Employment Hero’s SmartMatch Salary Report uses real-time data from 90,000 employees across small businesses with 1-500 employees in the UK.

Collected at the end of December, the real-time data shows the impact of the Government’s Budget in late October, when employer NICs were increased by 1.2% – just weeks after a raft of other employment reforms were announced.

Employers have immediately reacted to the changes, which are not due to come into force until April, slashing hiring and letting some staff go.

Overall the amount of people in full-time employment shrunk by 0.1% month-on-month, following a 1.7% drop in November, leading to an overall drop of 0.8% across the final quarter of 2024.

DROP CONCENTRATED IN YOUNGEST WORKERS AND HEALTHCARE WORKERS

The UK’s most vulnerable employees appear to be the most likely to lose out as a result of the hiring walkback.

There were 0.7% fewer 18-24 year olds in full-time employment at the end of December compared to November, and 0.3% fewer workers aged 55+.

And the worst retraction was seen in the healthcare sector, where there were 3.5% fewer full-time employees at the end of December than there were in November.

Employment Hero UK MD Kevin Fitzgerald said these figures showed a continued vote of no confidence from employers.

“It’s shocking that the typically strong holiday hiring season has led to a decline in employment. Employers are pre-emptively responding to the barrage of increased costs the Government is about to load onto them – but its workers who are losing out. The fact that young workers and healthcare staff are bearing the brunt of these decisions is particularly worrying, but two months of this drop suggests that more pain is on the way across the workforce. The true impact of the NICs increase could be far more severe than the Government has anticipated. It must reverse its jobs tax decision – or give small businesses some relief from the huge cost coming down the pipe.”