Employment Hero, a global leader in HR, hiring and payroll software, has released its December Jobs Report, a snapshot of employment and wage trends based on real-time data from over 115,000 employee records within small businesses in the UK. The latest data reveals that employment gains in December were muted, rounding off a trend of slowed growth for small businesses which persisted throughout 2025.
Employment Hero has been tracking these trends over the last 12 months, showing the real-world impact of the Autumn Budgets and subsequent employment law updates. Small businesses, which employ the majority of the UK workforce, responded immediately to these changes, with a sharp monthly employment decline of -1.1% recorded in April 2025. This set off a chain of events that has shaped employment patterns for the rest of the year.
Traditionally, December is a crucial month for jobseekers, as employers take on extra staff to meet heightened consumer demand. However, the latest figures show minimal growth, with employment increasing just 0.5% month-on-month, the lowest monthly increase observed since April.
The muted increase suggests that the usual seasonal hiring surge did not materialise, indicating small businesses are staying cautious amid ongoing economic uncertainty following the 2025 October Autumn Budget, which many small businesses felt did little to support them. Retail and hospitality were particularly affected, with employment in these sectors contracting by -2% in December.
