Employment Hero has reported a sharp rise in hiring across HR and accounting roles, as UK small businesses appear to be strengthening compliance capability ahead of major labour market reforms. The company said employment in the sector rose 9.9% year-on-year in February 2026, while wages increased 16.4% over the same period.
The figures come from Employment Hero’s latest Jobs Report and are based on more than 4,000 real-time employee records across 130 HR and accounting small businesses. The data suggests SMEs are adding specialist expertise in compliance, payroll, and workforce management as they prepare for changes associated with the Employment Rights Act.
The rise follows a broader build in demand. In January 2026, employment in HR and accounting rose 7.1% month-on-month, making it the fastest-growing industry in the SME labour market that month. Employment Hero said the shift was already visible after the October 2025 Budget, when HR and accounting employment rose 10.9% month-on-month in November.
Pay growth has tracked the increase in hiring. Salaries for HR and accounting roles rose 16.4% year-on-year in February, compared with 8.8% wage growth across the SME economy overall. Separate research from Employment Hero, based on a survey of 1,000 small business leaders, found the most common action businesses were taking ahead of the reforms was investing in HR and compliance expertise.
The company’s broader employment data also points to a change in workforce structure. Full-time employment across all sectors rose 13.4% year-on-year in February, almost three times the 4.9% growth recorded in part-time and casual roles. Employment Hero said one explanation may be the added complexity around non-standard working arrangements under the Employment Rights Act, prompting employers to favour more stable roles with clearer contractual terms.
Kevin Fitzgerald, UK Managing Director at Employment Hero, said: “Our latest data shows a clear surge in demand for HR expertise across the SME sector. Employment in HR and accounting roles has risen nearly 10% year-on-year, with wages climbing more than 16% as businesses compete for the skills needed to navigate an increasingly complex regulatory environment.
“With the Employment Rights Act on the horizon, many small businesses are choosing to strengthen their HR capability rather than risk falling behind on compliance.
“The data also shows full-time roles are growing faster than part-time, which may reflect a shift towards more stable and predictable employment structures as businesses adapt to evolving regulation.”
The report also suggests that, despite rapid progress in AI tools across the wider economy, businesses are still choosing human expertise when compliance risk rises. For SME employers, that is showing up in both headcount and pay.
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