Sage SMB Workforce Tracker Update for December

The monthly Sage Workforce Tracker is based on data collected each month from approximately 200,000 small businesses with millions of employees across the UK. This report, created in collaboration with Smart Data Foundry and Cebr, looks into how Small and Medium-sized Businesses (SMB) are managing workforce challenges.

Key highlights:

• Median gross earnings: £2,178, up 5.5% year-on-year
• Median take-home pay: £1,780, up 4.0% year-on-year
• Total headcount: unchanged on a year-on-year basis

As quoted in the report:

Looking ahead, the near-term economic outlook remains subdued, with fragile business confidence weighing on hiring and investment. On the upside, inflation is expected to slow further, offering room for more interest rate cuts, helping to reduce borrowing costs. Wages continue to grow at an elevated pace, yet a softening of the labour market will see pay growth decelerate over 2026. Measures announced in the Autumn Budget may have provided some policy certainty but are unlikely to materially improve weak economic growth.

Liam Daly, Senior Economist at Cebr

Insights

Earnings

Median gross earnings rose 5.5% year-on-year in December; an increase on November’s 4.5% YoY increase, but down from 7.2% in December 2024. Meanwhile, median take-home pay (net) stood at £1,780, up 4.0% YoY. 

Regionally, London had the lowest earnings growth at 4.2% and earnings rose most in the West Midlands, increasing by 6.3%. Year-on-year changes in earnings growth varied more by industry than location. Earnings growth was highest in ‘other services’, rising 9.4% YoY, and lowest in the arts and entertainment industry, rising by 1.7% YoY.

Headcount

Total headcount was unchanged year-on-year in December, following a 0.2% YoY decrease in November. The sample of small businesses in Wales registered the greatest YoY increase at 0.9%, while those in North East England registered the largest declines (0.8%) in headcount.

Year-on-year changes in headcount varied widely by industry. Accommodation and food services experienced the largest drop of 2.2%, while in public administration and defence headcount grew by 4.9%.