Office of National Statistics (ONS) labour market figures just released show that unemployment in the UK is up on the last quarter, now sitting at 4.6%, and wage growth is at its weakest since September 2024.
These new figures suggest that businesses are using headcount reduction as the preferred way to manage costs, save money and free up budget to invest in tech.
Mark Jones, Employee Benefits Partner at financial wellbeing consultancy Isio, commenting on the implications said:
Employer response to NI & wage hikes
“The combined impact of higher National Insurance costs and the Minimum Wage hike is pushing budgets to breaking point. We’re hearing from clients that sign-off for new initiatives is getting tougher, with finance leads demanding robust evidence of ROI before investing in anything people-related. It’s putting even more strain on already-stretched teams who are trying to retain staff, reduce absenteeism, and keep benefits competitive.”
He said that one of the biggest barriers that Health and Wellbeing professionals face now is not scaling back strategies to save money – but that many organisations “have never meaningfully invested in one to begin with”.
Jones added:
“The solution isn’t to do less, but to do it smarter. That means using data to prove what’s working, prioritising investments that deliver measurable returns, and being honest about where legacy benefits no longer serve the business or its people. Employers who can’t justify their people spend risk being left behind.”
Protecting productivity
Manpower’s Employment Outlook figures, released at the same time, show that double the number of employers compared to the last quarter are struggling with economic uncertainty, with 64% naming this as their main concern.
Commenting on the ONS market report, Michael Stull, Managing Director at Manpower Group UK, said that many UK employers are “feeling mounting pressure to do more with less”.
But Stull added that the sharp drop in employers intending to hire new staff in the third quarter of 2025, reflected in Manpower’s research, shows “a measured reset” and “not a collapse”.
He said:
“Employers are pausing to protect productivity, not abandoning growth altogether.”
According to Manpower, hitting this new low is a symptom of the labour market re-aligning after the changes imposed by the National Insurance and Living Wage increases, alongside the recent uncertainties of the US trade tariffs. Its report predicts that employers will ‘wait and see’ to gauge the extent of the reset, rather than making any kneejerk decisions towards the end of the year.
What other implications for Health and Wellbeing?
For those working in Health and Wellbeing, this increasingly uncertain job market adds to employee stressors, which are already high due to rising cost of living and global volatility including wars and US trade tariffs; all of which make supporting employee financial wellbeing a growing priority.
Manpower figures also show that employers are increasingly taking on temporary staff, because this is more flexible, cheaper and lower-risk. This means professionals will need to account for this in their Health & Wellbeing strategies supporting the entire workforce to optimise productivity at a time when resources are stretched more than ever.
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