Jessica O'ConnorSmall businesses are hiring again, according to Employment Hero’s November UK Jobs Report, but the recovery remained deeply uneven across the country, with stark regional differences in employment and wage growth.
The report, based on real-time data from more than 110,000 employee records, revealed that employment in UK small businesses rose by 1.7% month-on-month in November.
Employment among small and medium-sized enterprises (SMEs) was 4% higher than in August, indicating a modest rebound despite a challenging economic backdrop.
However, longer-term trends pointed to a fractured national picture.
Employment growth was strongest in the East, which recorded a 12.1% annual rise – the highest of any region – followed by the South at 9.1%.
By contrast, employment in the North contracted by -3.8%, while London remained broadly flat at -0.2% and the Midlands posted a modest 2.6% increase.
Year-on-year, SME employment rose by 2%, well below the 7% to 8% annual growth typically seen before April’s employment law changes.
The slowdown comes as larger firms pull back on hiring, according to recent KPMG and Recruitment and Employment Confederation data, leaving smaller employers to drive what growth there is.
Wage growth was also uneven. The East saw a strong 9.7% annual increase, while wages in the North have risen by 3.6%, outpacing London, the South and the Midlands.
Nationally, wages rose 0.8% month-on-month.
Uncertainty is also influencing worker behaviour. Employment Hero’s research showed that 42% of UK workers actively searched for a new job in 2025, while 36% considered quitting.
Among SME employees, half said they would trade higher pay for more flexible hours, and 42% would accept lower pay for more meaningful work.
Kevin Fitzgerald, UK managing director at Employment Hero, said: “We continue to see small businesses showing real resilience and leading the employment growth rebound in the UK.
“However, the recovery is fragmented, and this unevenness is creating uncertainty for both employers and staff.
“SMEs face the difficult task of keeping wages moving, supporting flexibility, and offering meaningful work – all at a time when costs are rising and local challenges vary dramatically.
“Yet despite this, they continue to grow, which is remarkable.”
