As Part-Time Roles Fall, Workforce Inclusion Risks Being Left Behind

Small businesses across the UK are continuing to hire, but the shape of that hiring is changing. Employment Hero’s latest Jobs Report points to a labour market that is not simply recovering, but quietly restructuring.

Year-on-year employment growth among SMEs reached 5.3% in March, building on February’s 4.9% increase. At headline level, this suggests resilience. But beneath the surface, a more complex story is emerging, one that has significant implications for workforce inclusion, flexibility, and long-term talent strategy.

A widening divide between full-time and part-time work

The most striking trend is the growing divergence between full-time and part-time roles. Full-time employment rose 1.1% month-on-month in March, while part-time roles declined by -0.5%, marking the third consecutive monthly drop.

Over the longer term, the gap becomes even clearer. Full-time roles have grown by 14.6% year-on-year, compared to just 3.3% for part-time positions.

This shift signals a deliberate move by employers toward stability. In a more complex operating environment, shaped by rising costs and new legislation such as the Employment Rights Act, SMEs appear to be prioritising workforce structures that offer predictability and continuity.

As Kevin Fitzgerald, UK Managing Director at Employment Hero, explains:
“The headline is that employment growth is recovering, but the reality for small businesses is more complex. Beneath the surface, the labour market is quietly restructuring.”

Uneven impact across the workforce

While part-time roles are often associated with younger workers, the data shows they are disproportionately held by older employees and women. As a result, the decline in part-time work is not being felt evenly.

Older workers have been hit hardest. Boomer employment in part-time roles fell by -6.2% month-on-month in March, compared to -2.7% for Gen X and -1.3% for Gen Y. In contrast, Gen Z saw a 5% increase.

Gender disparities are also emerging. Among Boomer workers, part-time employment for women is down -4.3% year-on-year, while it has risen slightly for men.

This raises a critical question for HR leaders. As organisations prioritise stability, are they unintentionally narrowing access to the workforce for groups that rely more heavily on flexible working arrangements?

Stability comes at a cost

The report highlights the resilience of SMEs, but also the trade-offs they are making. Rather than scaling hiring aggressively, many employers are becoming more selective, focusing on roles that align with long-term operational needs.

This selectivity is also reflected in wage trends. Year-on-year wage growth remains elevated at 8.8%, suggesting employers are competing on pay to attract and retain talent in a tight market. However, month-on-month wages fell by -1.1% in March, with the North of England experiencing the sharpest drop at -2.6%.

This combination of rising long-term wages and short-term fluctuations points to an underlying tension. Employers are under pressure to remain competitive while managing increasing cost burdens, raising questions about how sustainable current wage growth will be.

A more selective labour market

Taken together, the data points to a labour market that is becoming more polarised and more selective. Full-time roles are expanding, but flexibility is contracting. Opportunities are growing, but not evenly distributed.

For HR leaders, the implications are significant. Workforce strategy can no longer be viewed purely through the lens of growth. It must also account for access, inclusion, and adaptability.

The risk is not just a tighter labour market, but a narrower one. As Fitzgerald notes, “many are becoming more selective, a shift that could reshape who gets access to work in the months ahead.”

What this means for HR strategy

This shift places new pressure on HR to balance competing priorities. Stability and efficiency are critical, but so too is maintaining access to diverse talent pools.

Organisations may need to rethink how flexibility is offered, particularly for groups most affected by the decline in part-time roles. This could include redesigning roles, investing in alternative working patterns, or strengthening pathways for underrepresented groups.

At the same time, the data reinforces the importance of workforce planning in a more volatile environment. Hiring decisions are becoming more strategic, and the margin for error is shrinking.

The UK labour market is not just recovering. It is evolving. And for HR leaders, the challenge is to ensure that stability does not come at the expense of inclusivity or long-term resilience.

HRD Connect Curators of the New Business Landscape. HRD Connect produces industry-recognized content for senior HR leaders. Through articles, case studies, Q&As, podcasts, events, and more, we offer truly progressive and cutting-edge insights designed to help people leaders address core HR challenges and add greater value to their business.

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