September sees strongest employment growth in 13 months

London, 9^th October 2025:  Employment Hero, the global authority on employment, has today released September data from its monthly Jobs Index, a monthly snapshot of employment and wage trends among UK SMEs. The new data reveals that despite the looming Autumn budget, there was a surge of optimism among the UK’s SMEs, driven by the strongest rise in employment in more than a year.

Employment growth hits 13-month month high

Drawing on data from more than 100,000 real-time employee records, Employment Hero’s September Jobs Index found that total employment rose 2.6% in September, the strongest monthly lift in 13 months. Year-on-year, growth climbed to 2.7%, up from 1.6% in August.

Full-time roles led the rebound, rising 2.1% month-on-month and 5.0% year-on-year, while part-time and casual positions increased 1.2% and 2.2%, respectively. The trend suggests that employers are prioritising stability and long-term staffing over short-term flexibility.

Younger workers are proving pivotal to the UK’s recovery. Employment among Gen Z rose 2.8% month-on-month and 8.3% year-on-year, the strongest increase across all generations. 

Long-term cracks in the labour market remain

Despite recent gains, employment growth still continues to lose momentum over the longer term. In September 2025 – typically a busy month for hiring – employment rose 2.7% year on year, down sharply from 8.5% in September 2024. The figures suggest that while SMEs are gradually regaining confidence after the October 2024 Budget, the jobs market remains subdued for workers and jobseekers alike.

Inflation drives wage growth 

As inflation rises, employers are under pressure to lift wages. Average pay increased by 3.0% month-on-month in September and is up 2.2% compared to this time last year. While wages continue to trend upwards, growth remains below inflation, so real wages are yet to see meaningful increases.

Commenting on the findings, 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.”