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ONS Employment Data (Thursday Release) - Predictions

ended 18. March 2026

The latest employment figures from the Office for National Statistics, due on Thursday, will give us an important read on where the UK jobs market really stands and whether the strain businesses have been feeling is now starting to show up in the data.

At the moment, the signs are mixed, but not especially reassuring. Unemployment is sitting at 5.2%. Youth unemployment has climbed to 14%, its highest level in years. The number of temporary workers is up 10.9% on the year, to around 1.64 million, which suggests many employers are choosing flexibility over commitment. Payrolled employees also fell by 121,000 between December 2024 and December 2025.

For small businesses, this is a difficult moment to read. Fewer firms are reporting recruitment problems than before, but that may not mean the labour market is improving. It may simply mean they have stopped trying to hire. Many SMEs are dealing with rising costs, weak confidence, pressure on supply chains and energy prices, and the ongoing impact of the Employment Rights Act 2025. Some have frozen recruitment altogether. Others are still trying to hire, but cannot find the right people.

That is the contradiction at the heart of this market. Unemployment is rising, but so are the complaints about skills shortages. Businesses are nervous. Workers are struggling. And younger people, in particular, appear to be finding it harder to get a foothold.

So when these figures land, the real question is not whether the headline number has nudged up or down. It is whether the jobs market is simply cooling, or whether it is beginning to crack.

For small businesses just trying to keep going, not chase aggressive growth, that distinction matters. Are SMEs still hiring where they can, or are we now seeing the early signs of a more serious downturn? Is the rise in temporary work a short-term reaction to uncertainty, or does it reflect a more permanent shift in how employers manage risk? And with youth unemployment now so high, are young people being locked out before they even get started?

There is also a bigger policy question here. If small firms cannot compete with larger employers on pay, benefits and certainty, are the headline figures disguising a deeper problem in the SME economy? And if unemployment and vacancies keep rising side by side, does that point to a labour market that is fundamentally out of sync?

Thursday’s figures should tell us more. But for many small businesses, the lived reality is already clear: hiring has become harder, more expensive and more uncertain, at exactly the moment many can least afford it.

  • What do the latest employment figures really mean for small businesses trying to survive, not just grow?
  • Are SMEs still hiring, or are we seeing the first signs of a genuine downturn in the jobs market?
  • Is the surge in temporary workers a sign of business caution or a new permanent feature of the UK labour market?
  • With youth unemployment at 14%, are young people being priced out of the job market by the Employment Rights Act's day-one protections?
  • Should the government be doing more to help small businesses hire, or is rising unemployment proof that workers need even stronger protections?
  • Are the headline employment figures masking a crisis for SMEs who can't afford to compete with larger employers on pay and benefits?
  • Is the skills mismatch now so severe that unemployment and vacancies will rise together and if so, whose fault is that?

    Give us your thoughts

2 responses from the Newspage community

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Editor
Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
Thursday's figures will confirm what small businesses already know: hiring has stopped. Not because we don't need people, but because we can't afford the risk. Unemployment's rising, but so are skills shortages. That's not a puzzle, it's a broken system. Young people can't get jobs because businesses are scared of day-one protections. Temp work is up because nobody wants to commit. And small firms can't compete with big companies on pay, so we're left with whoever's left over. The government keeps adding protections for workers while doing nothing to help small businesses actually employ them. You end up with workers who can't find jobs and businesses that can't fill vacancies. It's the worst of both worlds. If you want employment to go up, you have to make it possible for small businesses to hire without betting the farm every time they bring someone on.
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Sally Asling
Director at ProFind Property Recruitment
The government has announced a major drive to unlock around 200,000 new jobs and apprenticeships for young people, with financial incentives designed to encourage employers to hire. On the surface, that sounds like exactly what the UK needs. Youth unemployment is rising and creating opportunities for the next generation is clearly important.

But there is an uncomfortable question sitting underneath this policy.

Is the government now trying to fix a hiring problem it helped create in the first place?

Over the past year, businesses have been absorbing a series of rising employment costs.

Employer National Insurance increases. Significant rises in the National Minimum Wage. Additional regulatory and operational pressures.

For many SMEs, those changes materially altered hiring decisions.

When the cost of employing someone increases, businesses naturally become more cautious about creating new roles. That is not ideology. It is economics.

Now we are seeing government incentives being