Employment growth within Britain's small and medium-sized enterprises (SMEs) experienced a significant downturn last month, ahead of the Autumn Budget's impending tax increase on employers.
The rolling six-month average for annual employment growth in full-time positions plummeted to 2.6% at the end of October, a stark contrast to the 12.8% seen in October of the previous year, as per a report shared exclusively with City AM.
This report, produced by Employment Hero, scrutinised the most recent employment data for October from over 90,000 SME employees, sourced from the Office for National Statistics (ONS), as reported by .
This downward trend follows closely on the heels of several tax increases disclosed in the Budget on 30 October, where Chancellor Rachel Reeves announced a 1.2% rise in employers' National Insurance Contributions (NICs).
With this increment, employers' NI contributions have escalated to a total of 15%, despite earlier indications of a hiring slowdown among businesses prior to the announcement.
"These figures should be a wake up call to the Government," stated Kevin Fitzgerald, º£½ÇÊÓƵ Managing Director of Employment Hero.
"Employment growth is already shrinking at our small and medium firms and the tax hike on job creators is only going to make things worse," added Fitzgerald.
Despite a "slight recovery" in full-time job growth during September and October after a standstill due to the uncertainty surrounding the 4 July General Election, the report underscored.
The report suggests that as a result of this recovery, employment growth is "likely" to level off as we enter the new year.
"We need consistent job growth to keep our economy moving forward staying flat will only mean more people out of work as our population continues to grow," Fitzgerald commented.
He further stated: "The National Insurance hike will make many small business owners think twice about creating new roles, just as employment growth is naturally cooling off."
"The Government talks about supporting small business growth, but this policy does the opposite it makes hiring more expensive just when SMEs need all the help they can get."
