Employment in HR and accounting roles has climbed sharply as businesses prepare for tighter workplace regulation, with hiring rising 9.9 percent over the past year and wages increasing even faster, according to new figures.
Pay for these roles grew by 16.4 percent year-on-year, well ahead of wider wage growth across small and medium-sized enterprises, pointing to strong demand for specialist knowledge in areas such as compliance, payroll and workforce management.
The increase comes as employers ready themselves for incoming employment law reforms, including the Employment Rights Act, which is expected to place greater obligations on businesses and reshape how work is structured.
Compliance demands ‘drive hiring growth’
Data from HR platform Employment Hero show that hiring in HR and accounting has accelerated in recent months, with employment in the sector rising 7.1 percent between January and February 2026 alone, making it the fastest growing area of the SME labour market during that period.
Earlier increases were recorded following the October 2025 Budget, when employment in these roles rose 10.9 percent month-on-month in November, suggesting businesses began strengthening internal expertise well before the latest round of reforms approached.
The pattern points to employers building in-house capability to manage regulatory requirements rather than relying solely on external advisers. Areas such as employment contracts, payroll accuracy and workplace policies are likely to require closer oversight as new rules take effect.
Survey data from more than 1,000 small business leaders suggests this approach is deliberate, with investment in HR and compliance expertise emerging as the most common step firms plan to take ahead of the Employment Rights Act.
Wages climb as competition for expertise intensifies
Competition for experienced HR professionals has pushed salaries higher, with pay in the sector rising significantly faster than the broader SME average of 8.8 percent. Experts say the gap reflects the growing importance of roles tied to governance and risk, particularly as businesses face more complex obligations around employee rights and working arrangements.
At the same time, employers appear to be reconsidering how they structure their workforce. Full-time employment across all sectors rose 13.4 percent year-on-year in February, compared with growth of 4.9 percent in part-time and casual roles.
One likely factor is increased scrutiny of non-standard work arrangements under the Employment Rights Act, which strengthens protections for workers and may make flexible or casual arrangements harder to manage from a compliance perspective.
Businesses favour stability over flexibility
The move towards full-time roles suggests many employers are prioritising stability and clearer contractual arrangements as regulation evolves.
While flexible working remains an important feature of the labour market, the added complexity of managing different employment statuses could be prompting businesses to simplify their workforce models.
Despite ongoing advances in artificial intelligence, the data also suggests that employers continue to place value on human judgement in HR. Rather than reducing headcount through automation, many appear to be investing in specialist staff to interpret and apply new rules.
Kevin Fitzgerald, UK managing director at Employment Hero, said businesses were actively strengthening their HR capability in response to regulatory pressure.
“Our latest data shows a clear surge in demand for HR expertise across the SME sector,” he said. “Employment in HR and accounting roles has risen nearly 10 percent year-on-year, with wages climbing more than 16 percent as businesses compete for the skills needed to navigate an increasingly complex regulatory environment.”
Fitzgerald added that firms were prioritising readiness ahead of legislative change. “With the Employment Rights Act on the horizon, many small businesses are choosing to strengthen their HR capability rather than risk falling behind on compliance.”
He pointed to a change in hiring patterns, saying the growth in full-time roles may reflect a move towards more predictable employment structures as businesses adapt to new requirements.
The figures are based on payroll and employment data drawn from thousands of UK small businesses, alongside survey responses from business leaders collected in January 2026.
William Furney is a Managing Editor at Black and White Trading Ltd based in Kingston upon Hull, UK. He is a prolific author and contributor at Workplace Wellbeing Professional, with over 127 published posts covering HR, employee engagement, and workplace wellbeing topics. His writing focuses on contemporary employment issues including pension schemes, employee health, financial struggles affecting workers, and broader workplace trends.
- William Furney
- William Furney
- William Furney
- William Furney
