Full-time employment is going backwards following the Government’s disastrous decision to go after employers in its budget.
Employment Hero’s SmartMatch Salary Report uses real-time data from 90,000 employees across small businesses with 1-500 employees in the UK.
Collected at the end of November, the first real-time data reflects the impact of the Government’s Budget in late October, where employer NICs were increased by 1.2%.
Employers appeared to immediately react to the changes, which are not due to come into force until April, slashing hiring and letting some staff go.
Overall the amount of people in full-time employment shrunk by 1.2% month-on-month, and 0.1% across all employment types.
A small 0.3% boost to part-time employment – likely related to seasonal hiring – somewhat made up for the drop
This reduction in full-time roles led to a dip in month-to-month salaries for full-time workers, from a median of £36,910 to £35,870. This was still well up on a year ago, when the median was £34,200.
DROP CONCENTRATED IN YOUNGEST WORKERS
New employees seem to be the ones losing out as employers at SMEs opt to stop hiring.
There were 4.8% fewer 18-24 year olds in full-time employment at the end of November compared to October, the study showed. This was down 0.4% on the end of November 2023, meaning across the entire year youth full-time employment had shrunk.
This compared to a far more modest reduction of 0.5% month-to-month for those aged 35-44.
Employment Hero UK MD Kevin Fitzgerald said these figures showed a huge vote of no confidence in the Government’s Budget from employers.
“These figures show the disastrous decision to tax employment is already costing jobs. The 4.8% drop in full-time employment among 18-24 year olds is especially troubling, as it indicates employers are pulling back on bringing fresh talent into their organisations.”
“We’re seeing these employment cuts months before the NIC increase even takes effect – suggesting businesses are taking preemptive action to protect their bottom lines. While some workers are able to shift to part-time roles, this isn’t a sustainable solution for the UK economy. The Government needs to seriously reconsider this policy before it does lasting damage to employment, particularly for young people entering the workforce.”