Employment among the UK’s smallest businesses increased for a second consecutive month in June, while vacancies rose by more than 4,000, suggesting that many micro employers are still recruiting despite a softer national labour market.
The latest Intuit QuickBooks Small Business Index recorded a net increase of 1,400 jobs among businesses with between one and nine employees, taking estimated employment across the segment to 4,155,600.
Vacancies increased by 4,200, or 4.12%, to 104,500 open positions. Demand for labour therefore strengthened more quickly than completed hiring during the month, although a higher vacancy total can also reflect longer recruitment periods or difficulty finding suitable candidates.
Employment increased in seven of the 13 sectors tracked. Education recorded the fastest growth rate at 2.02%, adding 1,300 jobs, while professional services created the largest number of roles, with 6,100 positions representing growth of 1.13%.
The gains were uneven. Construction recorded the largest numerical decline, losing 5,000 jobs, while administrative and support services posted the fastest rate of contraction at 0.98%.
Two of the UK’s four nations recorded employment growth. Northern Ireland had the fastest rate at 1.36%, while England added the largest number of jobs, with an increase of 4,200.
Simon Worsfold, in-house economist at Intuit, said: “While hiring remains measured, it’s encouraging to see small businesses continue to create jobs for a second consecutive month. The rise in vacancies shows that many are still looking to invest in their workforce despite ongoing economic uncertainty. Small businesses remain remarkably resilient, adapting to changing conditions while continuing to support local economies and create opportunities across the UK.”
Ricardo Medina, chief executive and co-founder of Definite Article, said: “It’s great to see professional services leading the way in job creation, despite continued economic uncertainty. For firms like ours, investing in people remains one of the most important drivers of growth and client success. While businesses are still navigating a challenging environment, these figures show that many are continuing to hire where opportunities exist. The resilience and adaptability of the UK’s professional services sector continues to be one of its greatest strengths.”
The index uses anonymised payroll data from more than 26,000 UK small businesses with one to nine employees, supported by official statistics and economic modelling. Its focus on the smallest employers means it can diverge from measures covering the labour market as a whole.
Recent evidence that Britain’s labour market is weakening at the margins can therefore coexist with limited growth among microbusinesses. Smaller employers may continue adding staff while larger organisations freeze recruitment, reduce vacancies, or restructure.
A new contract, client, class, or service line can create an immediate need for another employee in a very small company. The loss of the same work can reverse that decision just as quickly, making microbusiness employment sensitive to local demand and short-term confidence.
Growth in professional services suggests that consultancies, agencies, accountancy practices, technology suppliers, and specialist advisers continue to find opportunities. Such companies can expand without the same physical investment required in construction or manufacturing, although their hiring remains dependent on client budgets and reliable payment.
Construction’s loss of 5,000 jobs points to a more difficult operating environment. Project delays, planning timetables, finance costs, material prices, and uncertainty over future workloads can affect small contractors quickly.
Employment in construction can also shift between payroll and self-employed arrangements, which complicates the interpretation of short-term movements. A decline in payroll positions does not necessarily represent an identical reduction in the amount of work being performed.
Rising vacancies alongside modest job creation may indicate recruitment friction. Small employers can advertise roles without filling them when skills are scarce, salary expectations have increased, or candidates prefer the security and benefits available from larger organisations.
Labour costs remain a prominent constraint. Warnings that higher statutory wage costs could weaken hiring carry particular weight for companies with only a handful of employees, where the cost of one additional role can materially alter cash flow and margin.
A poor appointment also carries greater risk in a small team. Training time, management attention, payroll taxes, equipment, and workplace costs sit alongside salary, while each employee represents a larger proportion of total capacity.
Many owners consequently delay recruitment until demand is visible, then require somebody quickly. That pattern can deepen competition for experienced candidates and leave vacancies open for longer.
The broader regional spread offers a more balanced picture than growth concentrated in a single part of the country, although one month does not establish a durable trend. Vacancies will need to convert into filled roles, and employment gains will need to continue through the second half of the year.
The data presents a more resilient view than several national labour market indicators while also exposing substantial differences between sectors. Professional services and education expanded as construction and administrative support contracted.
Two consecutive months of growth provide some evidence that the smallest employers are still investing. Wage costs, customer demand, borrowing conditions, and the availability of suitable candidates will determine whether that momentum continues into the autumn.
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