IoD: Cost and risk of employment is hampering UK growth prospects
Commenting on this morning’s release of ONS labour market data, Alexandra Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said:
“The small decreases in the number of payrolled employees and vacancies point to a concerning trend of employer caution regarding hiring staff.
“The combination of measures in the Employment Rights Bill and the large increase in employers’ National Insurance contributions is taking a serious toll on employers’ hiring intentions. The cumulative effect of these changes will ultimately be to stifle job creation.
“For the first since October 2020, IoD data shows a higher percentage of business leaders are expecting to reduce their headcount (28%) in the coming year than are expecting to increase it (24%).
“If the government is to meet its objectives of an 80% employment rate and boosting economic growth, it needs to urgently address business’ concerns about the increased risks and costs associated with employing staff.”
Full results
642 responses from across the UK, conducted between 11-30 October 2024. 13% ran large businesses (250+ people), 19% medium (50-249), 22% small (10-49 people), 35% micro (2-9 people) and 12% sole trader and self-employed business entities (0-1 people).
Comparing the next 12 months with the last 12 months, what do you believe the outlook for your organisation will be in terms of:
| Much higher | Somewhat higher | No change | Somewhat lower | Much lower | N/A | Don’t know | |
| Business investment | 3.6% | 21.8% | 32.6% | 23.8% | 16.2% | 1.1% | 0.9% |
| Costs | 19.5% | 66.4% | 9.3% | 2.8% | 0.8% | 0.5% | 0.8% |
| Exports | 3.4% | 12.0% | 28.7% | 6.1% | 3.9% | 45.0% | 0.9% |
| Headcount | 1.7% | 22.3% | 47.5% | 19.9% | 7.9% | 0.3% | 0.3% |
| Revenue | 4.0% | 40.2% | 24.8% | 22.4% | 6.9% | 0.5% | 1.2% |
| Wages | 4.7% | 49.5% | 37.2% | 4.8% | 2.6% | 0.5% | 0.6% |
