East Midlands unemployment falls but concerns over higher hiring costs remain

Unemployment among over 16s in the region has dropped to 4% but the impact of additional costs like increased National Insurance contributions could lead to lower recruitment says East Midlands Chamber.

The latest estimated figures from the Office for National Statistics for unemployment are lower than the UK level of 4.4% and cover the period between October and December 2024. The East Midlands figure is 0.6% lower than the previous three months in the region.

East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “While it’s encouraging that unemployment has gradually fallen in the East Midlands and is 1% lower than a year before when it was 5%, research we’ve carried out among the region’s businesses over their recruitment and investment intentions doesn’t paint such a pretty picture. However we look at this, there’s just no hiding from the fact businesses will be hit with a hiring cost hike from April due to factors like increased National Insurance contributions.

“East Midlands businesses have indicated they plan to reduce their recruitment spend over the course of 2025.  In our Quarterly Economic Survey the number of businesses in the region planning to cut back on recruitment jumped from 9% to 22% - the fact it doubled over three months is significant.  Only 6 out of 10 plan to keep recruitment the same, which was a slight fall from the previous survey, and we could see that number drop further. 

“Businesses will be looking to the government’s comprehensive spending review for a clear strategic and delivery plan that will drive economic growth, giving business the confidence to invest in their workforce.”