Private sector recruitment has fallen to a record low as employers contend with higher national insurance contributions (NIC) and rising wage costs, according to the Chartered Institute of Personnel and Development (CIPD).
Only 57% of private sector employers plan to recruit staff in the next three months, down from 65% in autumn 2024, according to the CIPD’s latest Labour Market Outlook.
84% of employers reported higher employment costs since NIC changes took effect in April this year.
The hardest hit sectors are hospitality and care, where 50% of employers have seen costs rise significantly compared with 32% across all employers.
When asked which increase had the greatest financial impact over the past year, 36% of employers cited the rise in NICs, 15% energy costs and 12% minimum wage rises.
Nearly four in ten (37%) employers hiring under 21s said NIC changes had significantly increased their employment costs, compared with just 23% of those that do not employ young people. This is despite under 21s being exempt from employer NICs.
If your business is facing redundancies or undergoing restructuring, our experienced employment law specialists can help guide you through the process, helping you meet your legal obligations while supporting both your business and your employees. Please contact our team on 02920 853731 or email tcms@thomas-carroll.co.uk.
