Sage Monthly Workforce Pulse: April 2026

The Sage Workforce Pulse is based on data collected each month from approximately 200,000 small businesses with millions of employees across the UK. 

Key highlights 

• Median Gross earnings: +£2,196, Up 4.6% year-on-year
• Median Net earnings +£1,790, Up 3.7% year-on-year 
• Headcount +0.4% Year-on-year 

The Sage SME Monthly Workforce Pulse indicates that headcount among surveyed small businesses increased by 0.4% year-on-year in April. Over the same period, median gross earnings rose by 4.6%, a slower pace of pay growth than the previous month. 

Despite a strong first-quarter performance, the UK’s outlook for GDP growth in 2026 remains subdued, as renewed inflationary pressures, driven by higher global energy prices, raise costs for small businesses and squeeze real household income. Cebr forecasts GDP growth of 0.9% for the year. 

In the labour market, an expanded pool of job seekers is contributing to easing underlying wage pressures, which in principle should support hiring demand. However, businesses face rising input costs and uncertain demand conditions. 

Moreover, recent increases to the National Living Wage will raise labour costs for firms in lower-paying sectors such as hospitality and retail, limiting the extent to which easing wage pressures translate into stronger hiring appetite. Furthermore, in response to the energy price shock, the Bank of England is now expected to keep rates higher for longer, acting as a headwind to business investment. 

For workers, rising inflation alongside moderating pay growth is squeezing real wages, which, combined with a higher unemployment rate, will restrain household income and consumer spending. Together, softer demand conditions and elevated cost pressures will weigh on businesses’ confidence and limit firms’ appetite to expand hiring over the remainder of the year.

Liam Daly Senior Economist at Cebr

Earnings

Median gross earnings rose 4.6% year-on-year in April, continuing a downwards trend from 4.9% in March and 5.9% in April 2025. Meanwhile, median take-home pay (net) stood at £1,790, up 3.7% YoY. 

Regionally, London had the lowest earnings growth at 3.4% and earnings rose most in Wales, increasing by 6.3%. Year-on-year changes in earnings growth varied more by industry than location. Earnings growth was highest in ‘construction sector’, rising 5.5% YoY, and lowest in the ‘finance and insurance industry’, growing by just 0.1% YoY.

Headcount

Total headcount grew by 0.4% year-on-year in April, down from 0.5% in March. The sample of small businesses in The East of England, East Midlands, and West Midlands registered the greatest YoY increase at 1.2%, 1.1% and 0.8%, respectively, East, Yorkshire and the Humber, and registered the weakest results, with headcount falling by 0.3% and 0.2%, respectively.

Year-on-year changes in headcount varied widely by industry. Similar to December’s results, ‘Accommodation and food services’ experienced the largest decline of 1.4%, while in ‘public administration and defence’ headcount continued to grow with a 4.1% year-on-year change.