UK business leaders are feeling more positive than negative about the next six months, new figures reveal.
Economic difficulties have beset small and medium-sized enterprises in recent times, including a near-10% rise in the cost of employing staff over the past year and rising employer National Insurance Contributions in last year’s Budget. Yet micro (fewer than 21 staff), core (21 to 150 staff) and mid-market businesses (more than 150 staff) are considerably less downbeat than you might expect.
The findings come from Employment Hero’s Quarterly SME Pulse, powered by GWI, which surveyed 600 senior business leaders across the UK between April and June 2026. Every quarter, Employment Hero asks hundreds of business leaders how their business is really doing; from hiring plans to AI spend.
Asked to describe the outlook for their company’s financial performance over the next six months, 59% gave an optimistic answer against 17% who gave a pessimistic one, a ratio of more than three to one.
Leaders reported that optimism alongside naming other pressures in the same survey, with productivity and output topping the list at 36%, followed by wages and remuneration at 34%, hiring and talent acquisition at 31%, and regulatory compliance also at 31%.
Even the Businesses Under the Most Strain Are Still Net Positive
The clearest test of that optimism is what’s happening at the businesses facing the most difficulty. Micro businesses report the UK’s highest rate of reducing headcount (8%) and the highest rate of holding hiring altogether (38%) the two figures in this survey that make the case for gloom being strongest at the smallest end of the market.
Yet even within this cohort, 47% of micro business leaders describe themselves as optimistic, against 25% pessimistic. Though that gap is narrower than the 42-point national gap between optimists and pessimists, optimists at micro businesses still outnumber pessimists by nearly 2:1.
Hiring Plans Point the Same Way, by an Even Wider Margin
The figures also show UK businesses’ hiring plans point in the same direction as their financial outlook: both lean positive rather than negative. And on hiring specifically, the gap between positive and negative answers is wider than it is on financial sentiment, not narrower.
Across the UK, 35% of businesses report plans to expand headcount against 5% planning to reduce it, a ratio of 7:1, compared with the 3.5:1 ratio between optimists and pessimists on financial outlook. At micro businesses specifically, 8% plan to reduce headcount, but a further 22% still plan to expand and 2% plan aggressive growth, meaning close to a quarter of the UK’s smallest businesses are actively planning to add staff, three times the share planning to cut.
It’s a pattern that sits apart from the broader landscape, with surveys of businesses of all sizes (beyond SMEs) reporting a fall in staff appointments, according to KPMG and REC’s UK Report on Jobs for July 2026, with REC’s chief executive describing the period as “a long recruitment winter.”
What the Optimism Doesn’t Tell Us
Whether the optimism Employment Hero has seen will hold for the rest of the year, or reflects genuine confidence in trading conditions rather than, for instance, leaders simply being more hopeful than the numbers underneath them justify, remains to be seen. But it’s a question that could be answered by the Chancellor by the time the Autumn Budget takes place on Wednesday 28 October.
