UK businesses are holding back on recruitment following the Autumn Budget, with just seven per cent saying it makes them more confident to hire, according to a new poll.
In contrast, 59% said it will not make them more confident, while 34% remain unsure, according to the survey by Pertemps Network Group.
The cautious sentiment came as the Budget introduced measures which will increase business costs and challenge workforce planning. Key changes include a freeze on income tax thresholds, effectively a "stealth tax" that increases the burden on workers over time.
Perhaps most significantly, the Budget will end the National Insurance exemption for salary sacrifice pension contributions above £2,000 per year from 2029. This caps the benefit of salary sacrifice pensions, a move projected to raise nearly £4.7 billion in additional tax revenue while increasing payroll costs and reducing take-home pay for many workers.
These changes, combined with ongoing economic uncertainty, come at a time when the labour market is showing signs of cooling.
Insights from the CBI Annual Conference, held earlier this week, reinforced these concerns, with business leaders pointing to rising costs and regulatory pressures, a warning echoed in the latest CBI/Pertemps Employment Trends Survey 2025.
The survey shows just 26% of firms expect to expand staff in the next year (down from 48% last year), while 27% expect to shrink headcount. Plans for training investment have also dropped. Only 13% of firms intend to boost training spend, compared with 32% in 2024, while nearly a quarter plan to cut training altogether.
The latest CBI/Pertemps Employment Trends Survey shows many employers are responding by slowing hiring, limiting pay increases, reducing training investment and focusing on critical roles over broad-scale recruitment.
“Businesses are feeling the squeeze. The Budget, combined with the challenges discussed at the CBI Conference, has reinforced uncertainty across sectors.
"However, employers are responding with greater focus and clarity, prioritising the roles that are truly critical to operations and ensuring resources are directed where they have the most impact. Flexible workforce strategies, such as temporary, contract and targeted recruitment, are giving organisations the agility to adapt quickly and maintain momentum.
"Investment in training and development is also under pressure, yet supporting key talent remains vital for long-term growth and many employers are finding innovative ways to continue nurturing their people.
"Above all, forward-looking planning and adaptability are essential. Businesses that take strategic action now will be best placed to navigate uncertainty and continue to grow.”
