Labour Market Pressures Bearing Down on Firms

16th April 2025

Responding to the latest labour market data, published by the ONS this morning, Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said:

“The labour market continues to be a significant pressure bearing down on businesses of all sizes.  

“The rising cost of employment is a major challenge for employers.  While wage growth, including bonuses, has eased once again, it continues to significantly outpace inflation. Added to this, the employer national insurance hike this month has ramped up staffing costs. It will be some time before we will fully understand the true impact of these increases on jobs, investment, and the extent to which firms can absorb and adjust to the rising costs.  

“Vacancies have fallen on the quarter, underlining our latest research which shows workforces aren’t growing. Recruitment remains a huge challenge and labour costs are forcing businesses to put up their prices.  

“The government must ease the cost pressures on businesses, so they have the freedom to recruit and invest in a skilled workforce. The recent announcement on construction training investment by the Chancellor was welcome. However more flexibility in the skills system is needed to boost training and development across the economy.  

“The Employment Rights Bill continues to concern business. While government is consulting business, the legislation as it stands threatens to add even more costs and complexities for employers.”