Employment Hero says UK businesses are finding hiring more complex, more expensive, and harder to sustain as employment law changes add compliance pressure to already rising staff costs.
New YouGov research commissioned by the company found that 56% of businesses believe employing staff has become more complex over the past year, while the average complexity score assigned to hiring rose from 4.7 out of 10 three years ago to 6.2 today. The survey covered more than 1,000 UK business leaders and was carried out two weeks after the latest employment law changes took effect on 5 April.
Concern over compliance is feeding directly into growth decisions. Employment Hero found that 53% of businesses are worried about unintentionally breaching new employment laws, and 78% said changes in employment complexity had affected their ability to grow over the last 12 months. Smaller businesses appeared especially exposed, with 19% saying new employment laws significantly discourage them from hiring, compared with 11% of larger organisations.
Cost pressures remain central to the picture. Respondents said employment costs for full-time staff had risen by 9.6% over the past year, driven largely by higher salaries and rising National Insurance Contributions. Two-thirds of businesses reported increased costs as a result of new employment laws, while more than half said HR administration, payroll processing, and recruitment had also become more expensive.
Kevin Fitzgerald, UK managing director at Employment Hero, said: “SMEs are the engine room of the UK economy, but too many are now being asked to grow with one hand tied behind their back. Hiring should give business owners confidence, yet this data tells us that it’s actually what’s keeping them up at night as concerns grow around cost, admin and risk to their business and livelihood.”
