Despite a difficult backdrop for small businesses, employment and wages are on the up. According to Employment Hero’s March Jobs Report, employment grew 2.1% month-on-month (MoM) and 5.3% year-on-year (YoY) in March 2026, while wages increased 8.8% YoY – the second consecutive month of growth above 8%, and a significant acceleration from just 3.1% in December.
Month-on-month, however, wages fell -1.1% in March, following an uplift of 1.8% in February. The timing suggests businesses have been responding to the double-edged sword of new Employment Rights Act obligations and the National Living Wage rise since their announcements in the autumn of 2024, and appear to have pulled back on pay rises in the month immediately before those costs landed.
The national picture, then, is one of growth with caveats. Breaking down the numbers by region reveals how pronounced those caveats are. Whether you’re a job seeker weighing up your options or a business deciding where to hire, understanding where the momentum is. and where it isn’t, could point you in the right direction.
The Regions Leading the Recovery
The March Jobs Report shows The South leads all regions for employment growth in March, up 3.1% MoM and 5.1% YoY. That performance holds up over time too: over the past three months, employment in the South is up 4.6%, putting it among the most consistent regional performers in the report.
The North follows closely at 2.7% MoM and 5.8% YoY, with a 4.1% gain over the past three months. Both the South and the North are outpacing London, which grew just 1.7% MoM and 2.0% YoY – the weakest annual employment growth of any region with full data, and a trend that has persisted for much of the past year.
The standout over the longer term, however, is the East. Year-on-year employment is up 11.3% – more than double the national average of 5.3%. But MoM growth in March was just 1.6%, and only 0.4% compared to three months ago. After an extended period of exceptional hiring growth, the East appears to be plateauing. One explanation could be that businesses in the region are reaching a natural ceiling and successfully filling gaps in the workforce.
The Midlands tells a different story entirely with just 0.2% MoM employment growth – the lowest of any region – yet the highest monthly wage growth of any region at 1.4% MoM, and 12.4% YoY. When businesses raise wages but don’t increase headcount, it’s usually because they’re trying to reduce attrition, which can be thousands of pounds more costly than holding onto staff. Simply put, the Midlands isn’t necessarily struggling – it’s competing for a limited pool of workers, and paying accordingly.
The Wage Picture: Not Where You’d Expect
On wages, the regional rankings flip almost entirely. London and the South – which lead on employment growth – sit at the bottom of the wage growth table, with London wages growing just 5.9% YoY and the South 4.8% YoY. While both regions are above inflation, they’re well behind the rest of the country.
The East, on the other hand, leads on annual wage growth at 14.6% YoY, with the Midlands close behind at 12.4% and the North at 10.4%. The combination of 11.3% YoY employment growth and 14.6% YoY wage growth makes the East the most competitive hiring environment in the data – and, for employers, the most expensive one to enter.
Despite the strong 10.4% YoY figure, wages in the North have fallen -2.6% MoM and -6.5% over the past three months – a sharp pullback that sits awkwardly against an otherwise encouraging annual picture.
Where the Opportunities Lie
If you’re a job seeker, the East offers the most powerful combination of employment and wage growth of any region, even if the pace of hiring is beginning to slow. The South, on the other hand, is producing the most consistent month-on-month results, which is worth considering. The North is also worth a look for employment prospects – 5.8% YoY growth and a 4.1% gain over three months suggest a market that’s still actively adding roles.
The caveat is wages: the recent -6.5% three-month pullback means pay momentum in the North has stalled even as hiring continues, so the opportunities are there, but the leverage to negotiate may be less than the annual figures suggest. London, meanwhile, continues to underperform on both measures – 2.0% YoY employment growth is the weakest of any region, and while wage growth of 5.9% stays above inflation, it’s well behind everywhere else. For workers with flexibility on location, the data makes a reasonable case for looking outside the capital.
For businesses, the regional data is less a hiring map and more a warning. In the Midlands and the East, wages are rising sharply regardless of whether headcount is. The question isn’t where to find candidates – it’s whether your retention strategy can hold up in markets that are already pricing people away from you.
