Marvin OnumonuEmployment Hero has published its December jobs report, which found limited employment growth, with a rise of only 0.5% month-on-month.
This was the lowest increase since April and showed that the usual seasonal boost in hiring did not take place.
Employment Hero tracked a sharp drop in employment of -1.1% in April 2025, right after the Autumn Budget and new employment laws.
This decline set the tone for the rest of the year, as small businesses remained cautious.
Retail and hospitality saw the biggest hit in December, with a fall of -2%.
Year-on-year, employment growth slowed from 7.8% in December 2024 to 2.5% in December 2025.
Additionally, the report found that, despite a small uptick, small businesses could not keep up with the growth seen last year.
Kevin Fitzgerald, UK managing director at Employment Hero, said: “We’ve been tracking employment trends across the UK for a full year and the data makes clear the real-world impact that policy has on small businesses.
“Our latest figures show that, while small businesses remain resilient, they are cautious, with employment growth slowing and the usual seasonal surge failing to materialise.
“Many are still adjusting to changes from last year’s Autumn Budget and structural barriers continue to hold back investment and growth.”
Fitzgerald added: “Looking ahead, the Employment Rights Bill will be front of mind for many small business leaders, who will be considering how best to navigate the changes coming into force in April 2026.
“This is a real opportunity for the government to provide clear guidance and work collaboratively with small businesses, helping them plan and grow.”
