February saw a continued decline in employment in the UK, with a 0.4% contraction reported, according to Employment Hero's SmartMatch Employment Report. This decline follows a slight growth of 0.2% in January and has been part of an ongoing trend since October. Young workers, especially those aged 18-24, were significantly impacted. Contributing factors include recent tax increases from employer National Insurance contributions and the removal of the minimum wage for younger age groups. Despite declines, regions like Scotland and the South of England saw some employment growth.
This 0.4% contraction in employment growth is particularly concerning given its disproportionate impact on younger workers. While employers will have to pay more for these roles, the bigger challenge is that younger employees often require more training and support. Rather than replacing them, many SMEs will simply absorb the extra workload themselves, as they can't afford the additional strain.
Data from the end of February showed that employment shrunk by 0.4% across the month, following a slight growth of 0.2% in January.
On average, employment growth has decreased by 0.3% every month since October, when the hike to employer National Insurance contributions was announced.
Regionally, Wales saw the largest decline in employment with a 3.3% decrease in February - offsetting employment gains made over the last year.
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