The government's employment reforms are causing employers to put their hiring
plans on hold, according to the Institute of Directors (IoD).
The IoD noted that there was a small increase in payrolled employees in the
latest Labour market data released by the Office for National Statistics (ONS).
Estimates for payrolled employees in the UK increased by 9,000 between December
2024 and January 2025, said the ONS.
However, the ONS data also showed static job vacancies and increase in the
unemployment rate.
Alex Hall-Chen, Principal Policy Advisor for Employment at the Institute of
Directors, said:
'Our data shows that half of business leaders facing higher National
Insurance bills plan to reduce employment in response, and that business
hiring intentions over the next year remain around lows last seen at the
height of the Covid-19 pandemic.
'The government missed an opportunity at Report Stage of the Employment
Rights Bill to show that it has listened to business feedback about how to
avoid the reforms damaging employment prospects.
'The government's Better Regulation Action Plan is a welcome shift in
narrative, but such commitments will ring hollow if the principles are not
first applied to its plans to increase the regulation and cost associated
with employing staff.'
Internet link: IoD ONS