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18 January 2017

Employment stable as small firms battle rising costs

The latest UK jobs figures show the employment rate has remained stable in the three months to November 2016.

There are 31.80 million people in work, a figure largely unchanged from the previous three months. The number of self-employed people has increased by 133,000 since this time last year, with the self-employed now totalling 15 per cent of all those in work.

This correlates with the latest FSB Small Business Index, which shows small businesses continuing to take on new staff, but at a slower rate. A net balance of 2.9 per cent report increasing headcount, compared to 6.8 per cent in the previous quarter. Looking ahead, net 9.6 per cent of firms expect to hire more staff over the next three months.  

Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said:

“The stability of the UK employment market reflects the resilience of small businesses at an uncertain time.

“The cost of doing business is rising, and small firms state that increased labour costs are the main cause of this rise. It is testament to their adaptability that they are hiring new staff in a challenging environment and aspire to continue doing so over the coming months.

“To achieve that goal, they will need support. With cost pressures for small firms at a three-year high, it’s critical that the Chancellor takes every step possible to help small businesses achieve their employment targets. Increasing the Employment Allowance at his Budget on 8 March would be a good place to start.

“These figures also demonstrate once again the prevalence of the self-employed in the workplaces of today. We look forward to working with the Government on measures to protect the self-employed, particularly when it comes to accessing mortgages, income protection and social security. The launch of the Taylor Review last year was a welcome move in this regard, and we will be ready to provide evidence for the report.”