Sage UK SMB Workforce Tracker - January 2026

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: £2,189, up 5.3% year-on-year
• Median take-home pay: £1,791, up 4.1% year-on-year
• Total headcount: unchanged on a year-on-year basis

As quoted in the report:

The Sage UK Workforce Tracker shows that looking ahead, a lack of economic momentum is set to constrain growth in 2026. Business confidence remains fragile, reflecting elevated labour and input costs, an uncertain trade environment and restrictive monetary policy. 

On the upside, inflation is expected to ease concretely in 2026, offering room for further interest rate cuts, and improved credit conditions for businesses and households. In the labour market, the decline in job vacancies appears to have stabilised, although an elevated unemployment rate reflects the uphill battle currently faced by jobseekers, not least graduates and entry-level applicants. Despite a softer labour market, wages continue to rise at an elevated pace, creating an obstacle to headcount expansion.

Liam Daly, Senior Economist at Cebr

Insights

Earnings

Median gross earnings rose 5.3% year-on-year in January; a slight decrease on December’s 5.5% YoY increase. Meanwhile, median take-home pay (net) stood at £1,791, up 4.1% YoY. 

Regionally, London had the lowest earnings growth at 3.8% and earnings rose most in Wales, increasing by 6.4%. Year-on-year changes in earnings growth varied more by industry than location. Earnings growth was highest in ‘other services’, rising 7.7% YoY, and lowest in the ‘arts and entertainment industry’, falling by 0.2% YoY.

Headcount

Total headcount was unchanged year-on-year in December, following a 0.1% YoY marginal increase in December. The sample of small businesses in Wales, East Midlands and South East registered the greatest YoY increase at 0.6% each, while those in North East England and London registered the largest declines (0.4%) in headcount.

Year-on-year changes in headcount varied widely by industry. Similar to December’s results, ‘Accommodation and food services’ experienced the largest drop of 1.7%, while in ‘public administration and defence’ headcount grew by 4.2%.