Sage SME Monthly Workforce Pulse: June 2026

The Sage SME Monthly Workforce Pulse is now available for June. Produced by Sage in collaboration with Smart Data Foundry and cebr, the Sage SME Monthly Workforce Pulse is a high-frequency labour market indicator tracking pay, employment and workforce dynamics across approximately 200,000 UK SMEs, using anonymised payroll data.

Data from small- and micro-businesses is an important complement to official labour market statistics, which can be skewed towards larger firms. SMEs are a critical driver of jobs, growth and productivity, and the monthly workforce pulse provides a regular snapshot of performance and labour market trends across the regions of the UK.

Granular, near real-time, localised data such as this is increasingly important in a changing policy environment with a focus on devolution and “growth in every postcode”. Our SMB research datasets are available to policy researchers and academics wanting to explore labour market, growth and productivity trends – and have recently been updated to March 2026.

Key findings from the June Sage Monthly SME Workforce Pulse

• Median gross pay rose 4.1% year-on-year to £2,209, with median take-home pay up 3.5% to £1,804 per month. However, higher inflation and slower pay growth continue to put pressure on household finances – meaning real-terms earning grew by only 1% YoY.

• Headcount among micro businesses grew +0.5%, outpacing small and medium firms at +0.4% each.

• Headcount among 65–75-year-olds rose 7.4%, alongside the strongest pay growth of any age group at 4.9%. Meanwhile, employment among 25–34-year-olds fell 1.8%, and workers aged 16–24 recorded the weakest pay growth at just 1.9%. This could be related to the sector trends in technology, insurance and hospitality outlined below – but strong headcount growth amongst the over 65s could also indicate that more people of pensionable age are needing to supplement their pension income with work, another sign of continued cost of living pressures.

Regional insights:

• The East Midlands led regional SME growth, with headcount rising at three times the UK average (1.5%). Pay in the East Midlands also increased by 4.2% which could reflect recent investment in the region’s manufacturing, clean-energy and infrastructure economy.

• Wales led regional earnings growth, at 5.6%, closely followed by the West Midlands at 5.3%.

Sector insights:

• Finance and Insurance was the strongest sector for headcount growth at +1.3%, while Wholesale and Retail Trade led on earnings growth at +4.4%. This comes amid wider evidence of stronger recruitment across technology, security and transformation roles in the insurance sector.

• Accommodation and Food shed the most staff of any sector at -0.7%, following last month’s -1.4% decrease. Given the sector’s role as an entry point into work for younger workers, continued weakness in this sector could have wider implications for younger workers and the vitality of local high streets. Recent policy announcements reducing business rates in England for pubs, clubs and music venues won’t take effect until April 2027 and so may do little to arrest this change.

The macro-economic picture

Liam Daly, economist at cebr, adds that:

“Despite a relatively strong start to 2026, the UK’s outlook for GDP growth over the remainder of the year is muted, with renewed inflationary pressures, driven by a spike in global energy prices, weighing on household spending and small business profit margins. Cebr forecasts GDP growth of 1.1% for the year.

In the labour market, an elevated unemployment rate is constraining wage bargaining power among workers. Despite slower wage growth, elevated input costs and economic uncertainty are limiting firms’ capacity and willingness to expand headcount. Sluggish hiring activity is reflected in another recent decline in job vacancies, which fell to the lowest level in five years in the three months to May.

For workers, higher inflation and slowing wage growth are putting pressure on real incomes. Weaker purchasing power and subdued consumer confidence are expected to weigh on household spending, posing a downside risk to revenue growth for small businesses over the remainder of 2026.”