Register to get free articles
Want unlimited access? View Plans
Already have an account? Sign in
Staffing costs including wages, bonuses, national insurance and pension contributions increased for 41% of businesses with 10 or more employees in February 2026, according to the Office for National Statistics (ONS).
This figure represents a six percentage point rise compared with November 2025 and a five percentage point increase from February 2025.
The ONS found that expectations for future cost increases have also sharpened, with 55% of businesses predicting staffing expenses will rise over the next three months.
This is up 20% from November 2025, though it remains 11% lower than the same period in 2025.
Hourly wage growth appeared more constrained in the short term. Only 18% of businesses reported that employee hourly wages increased in January 2026 compared with December 2025. This rate remains broadly stable when compared with January 2025 and January 2024.
Labour market pressures also persisted as 17% of firms reported being affected by worker shortages in February 2026. This proportion has remained largely unchanged since November 2024, according to the ONS. However, recruitment difficulties have eased slightly, falling 9% from October 2025 to 20% in January 2026.
Among those struggling to hire, 47% cited a lack of qualified applicants for available roles. A further 29% of these businesses reported receiving a low number of applications.
Operational models continued to shift as 20% of private sector businesses reported using or planning to use increased homeworking as a permanent model. This trend has remained stable since January 2023.
