Payrolled employees fell by over 100,000 in a year – are you hiring right now?

Yes, we're hiring. We took on a new apprentice only last week, continuing something we've done for years. The barrier for us is uncertainty. We can accept that the cost of employing people has gone up, and there are plenty of skilled, willing people out there. What we don't have is any real certainty about what's coming, so we hesitate and hire more slowly than we'd planned. We're still growing the team, just at a more cautious pace. As for the drop, I'm not surprised by it. When employers are being squeezed, the cost of living keeps rising, and AI tools are starting to reach into skilled work, some retreat was always likely, and uncertainty makes it worse. A fall of a hundred thousand is caution showing up in the data. The people and the willingness are there. What's missing is certainty about the year ahead, and once that returns, the hiring will follow.

I'm not hiring and here's why. Employer on-costs are up: NICs and lower secondary thresholds inflate the non-wage cost of every domestic hire, turning headcount into a recurring risk. Rising wage floors squeeze margins hardest for SMEs without scale to absorb them. Employment rights legislation adds legal friction, regulatory risk and structural costs that variable-cost contracting simply doesn't carry. The ONS data backs this up. This is a structural shift, not noise. Payrolled employment down 145,000 year-on-year, 26,000 in August alone: that's a deliberate freeze on domestic expansion, not seasonal drift. Push tax and regulatory burdens past a critical threshold and capital moves toward higher-efficiency, lower-risk alternatives. Global remote talent plus AI automation now hand SMEs flexibility that UK PAYE headcount actively penalises. The ONS figures are the macro readout: agility and margin preservation over added domestic liability.

With the current economic climate, including the potential for higher borrowing costs, employers are thinking twice about raising their human headcount, and who can blame them. With more businesses looking to invest in A. I at a fraction of the cost and regulatory requirements, the outlook for a growing labour market isn't great. Employers will increasingly be using tech to ensure their current labour force works as efficiently as possible.

I am currently hiring, but I have left this to
The very last minute whereas I would probably have filled the position already under the previous government. There is an uncertainty and fear about employing new staff due to the current governments legislation and employment cost hikes.

I am not suprised about the published figures, the Labour Party have caused political Armageddon and employers are more concerned about building a fallout shelter to protect their businesses than to put it at risk by growing it.

Unless the current socialist government can accept that we live in a capitalist society where lower taxes and business growth stimulates the growth of the economy, we will remain in this dystopian era of an economic cold winter until a forward thinking government can be voted in

Businesses don't create jobs because politicians tell them to. They create jobs when they have confidence to invest and grow.

I'm not hiring at the moment. For a small business, the cost of employing someone has become a significant commitment once salary, National Insurance, pension contributions and the other costs of employment are taken into account.

Cost isn't the only barrier, though. Finding the right person is difficult. In a small business every hire matters, and I would rather wait than employ somebody simply because I need another pair of hands.

The fall in payrolled employment doesn't particularly surprise me. From my perspective, it isn't necessarily that businesses don't want to grow or create jobs. I think many smaller employers are simply being more cautious about taking on another permanent cost when they are uncertain whether they can find the right person and justify the overall expense.

If the Government wants small businesses to hire more, reducing the cost and risk attached to taking on employees would make a meaningful difference.