Telford HR firm boss says slowdown in UK jobs market is 'no surprise' in wake of tax changes
A drop in the number of businesses taking on new staff is “no surprise” due to hikes in national insurance contributions and the minimum wage, according to a Shropshire-based employment expert.
Statistics produced by government statistics agency the Office for National Statistics (ONS) showed the number of vacancies for staff fell by 63,000 to 736,000 between March and May 2025.
The figures, released at the beginning of June, also showed the unemployment rate in the West Midlands region had risen by 1.5 per cent, meaning that just over 5 per cent of people in the region are now out of work (5.2 per cent).
It was the first set of figures produced since the UK Government introduced changes to national insurance and living wage rules designed to help the lowest paid workers in the country, and Alasdair Hobbs of HR specialists Human Results in Telford said recent figures showing a decline in the number of firms hiring staff was "worrying but not unexpected".
“According to the Office for National Statistics (ONS), there were 63,000 fewer jobs available in May compared to three months previously," he said.
“That would quite clearly suggest that businesses are getting increasingly jumpy about hiring new staff, and it’s easy to see why.
“This was always going to be a likely outcome of rising employment costs which resulted from the Government’s decisions to increase the minimum wage and the amount of National Insurance contributions businesses now have to pay.
“A higher minimum wage is of course better for the employee but as the cost of hiring increases, businesses are now examining whether they really need that new member of staff or whether they can make do without.
“The figures show - and we are hearing from our own clients here in Shropshire - that more businesses are choosing to reduce their staff numbers to save costs.”
The director of economic statistics at the ONS, Liz McKeown, echoed Mr Hobbs’ sentiments, saying she expected the trend to continue throughout the year.
“Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on,” she said.
“It is likely that businesses will look to offset some of the rise in employment costs through a combination of reducing headcount and slowing hiring activity. Given this, we expect the unemployment rate to edge higher over the coming year.”
