While a cocktail of Employment Rights Act measures, National Insurance contributions fallout and geopolitical challenges have continued the trend of uncertainty in employment, small businesses (SMEs) are starting to see encouraging signs of growth, Employment Hero’s March Jobs Report shows.
The figures, based on data from 4,647 businesses and 125,932 employees, show employment rose 2.1% month-on-month (MoM) in March 2026, and 5.3% year-on-year (YoY) – a sustained recovery building steadily through the first quarter of the year.
But look beneath that headline figure, and a quiet structural shift is underway in the type of jobs that are being created. And the groups bearing the brunt of that shift aren’t who you might expect.
The Full-Time Boom
According to the Jobs Report, full-time employment across SMEs is up 14.6% YoY – a figure that sits nearly three times above the overall employment growth rate of 5.3%. Month-on-month, full-time roles grew 1.1% in March, and over the past three months they’re up 4.2%.
Part-time and casual work tells the opposite story. It fell -0.5% MoM in March, and is down -0.4% over the past three months. While the annual picture is modestly positive at 3.3%, the trajectory is clear: SMEs are creating full-time roles at pace, and pulling back from flexible arrangements. The question is what it means for the people who depend on those arrangements most.
Why Businesses Are Hiring for Keeps
The reasons for this shift are clear. SMEs have been absorbing wave after wave of cost increases over the past 12 months. Employer National Insurance contributions rose in April 2025, with the Bank of England finding that more than half of UK businesses (53%) expected to reduce headcount in response – a figure that remained above 43% months later.
The National Living Wage for workers aged 21 and over rose to £12.71 an hour in April 2026 – a 4.1% increase on the previous year, and the latest in a sustained upward trajectory that has placed mounting pressure on sectors reliant on lower-paid, flexible staff. And April’s Employment Rights Act measures – including day-one sick pay, extended paternity leave and greater liability exposure from employment claims – have added yet another layer of cost and obligation for employers to absorb.
Against that backdrop, consolidating around fewer but more stable, full-time hires is a rational response for business leaders. Once a low-commitment way to flex headcount up or down, casual or part-time arrangements have become harder to justify in the face of higher costs and regulatory obligations.
It’s Not Gen-Z Losing Out
When you look at which workers are losing ground as a result of this downward trend in part-time employment, it isn’t necessarily Gen-Z. Month-on-month, Boomers have seen -6.2% growth in part-time roles, Gen X -2.7% and Gen Y -1.3%. At 5%, Gen-Z is the only group to have seen an increase. As counterintuitive as that may seem given how common it is for younger workers to occupy such roles, the data suggests older generations are being hit harder.
Boomer employment tells a particularly stark story. While overall employment grew 2.1% MoM, 3.5% over the past three months, and 5.3% YoY, Boomer employment grew just 0.2% MoM, is down -0.6% over the past three months, and is down -4.7% YoY – making them the only generation experiencing a net annual decline in a growing jobs market. For workers in their late 50s and early 60s who depend on part-time roles to wind down toward retirement without leaving the workforce entirely, a contracting part-time market compounds an already difficult picture.
Rarely centred in conversations about flexible work are some of the most at-risk groups: parents – particularly mothers – who structure their working hours around childcare; workers approaching retirement and hoping to reduce hours without exiting the workforce; and carers managing responsibilities alongside employment. These groups face a dual threat: a shrinking part-time market, and being sidelined from flexible work conversations more broadly – with ripple effects that could last well beyond the current economic cycle.
One Sector Is Bucking the Trend
There is one sector bucking the part-time trend: Education and Training.
Posting the highest MoM employment growth of any sector in March at 10.3%, the data also shows part-time roles in the sector are growing while full-time positions are declining – moving in the opposite direction to the rest of the SME economy.
Teaching assistants, tutors, supply staff and adult education facilitators have always skewed toward part-time arrangements. What the March figures suggest is that the sector is leaning further into that model. For workers who need flexibility, education may be becoming one of the few reliable sources of part-time opportunity in a jobs market otherwise contracting on that front.
It also adds useful context to the sector’s overall picture. Education and Training employment is still down -3.2% YoY, suggesting the March spike is a partial correction rather than a sustained recovery – but one that is, at least for now, moving in the right direction for flexible job seekers.
Who Picks Up the Bill
The shift toward full-time work in SMEs is, in isolation, a welcome sign of employers committing to stable, long-term hires rather than managing uncertainty through casual arrangements. But every structural shift in a labour market creates winners and losers, and the losers here are people whose relationship with work has always been more complicated than a standard nine-to-five.
If part-time opportunities continue to contract across most sectors, the implications are real. For parents managing childcare costs, for older workers seeking a gradual transition out of full-time employment, for carers balancing paid work with unpaid responsibility – the jobs market may be growing, but it is growing in a shape that could dramatically reduce their job prospects. That’s worth paying attention to.
