IoD press release Increase in employment costs hits hiring as vacancies sink to pre-pandemic levels
Commenting on this morning’s release of ONS labour market data, Alex Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said:
“Today’s data reveals a concerning but unsurprising decline in employment, with the number of payrolled employees decreasing on the month by 0.3% and vacancies below pre-pandemic levels for the first time since March to May 2021.
“The cumulative impact of this month’s increases to employer National Insurance Contributions and the National Living Wage, coupled with a failure to meaningfully reform the Employment Rights Bill in response to employer concerns, has significantly weakened the business case for hiring.
“Our latest data indicates that firms’ headcount expectations remain at historically low levels. With three quarters of business leaders reporting that employment costs are the biggest cost driver they face, this situation is unlikely to improve without government intervention.
“Immediate action is needed to address the mounting pressures on businesses and restore confidence in hiring, to ensure that the costs of employment do not impede the UK’s growth ambitions. We urge the House of Lords to support targeted changes to the Employment Rights Bill that will restore employer confidence and stimulate job creation.”
Full Results
605 responses from across the UK, conducted between 14-27 March 2025. 13% ran large businesses (250+ people), 18% medium (50-249), 25% small (10-49 people), 31% micro (2-9 people) and 13% sole trader and self-employed business entities (0-1 people).
IoD member research shows cost concerns for the year ahead are at a record level. What are the biggest factors driving your outlook for costs over the year ahead? Please select all that apply.
