In partnership with Smart Data Foundry and the Center for Economics and Business Research, Sage has published its latest SME Monthly Workforce Pulse survey.
This is derived from anonymised payee data from around 200,000 small businesses and provides anonymised information on pay across the UK.
The data is part of Data for Good, Sage’s commitment to helping Small and Medium Businesses thrive using anonymized insights from our data and making better decisions for stakeholders.
So, smart managers and leaders can use the SME Monthly Workforce Pulse to plan their next move—like how to choose a new hiring location, and how to land your first hire.
Here’s what we cover in this article:
SMEs continue to show resilience
The latest SME Monthly Workforce Pulse data shows average earnings rose 4.1% year-on-year to £2,209, while take-home pay rose 3.5% to £1,804.
However, high inflation and slow wage growth are putting pressure on domestic finances.
The number of small businesses grew by +0.5%, outpacing small and medium-sized firms by +0.4% each. Employment Allowance of £10,500 may protect very small employers from the full impact of NICs, but this protection diminishes as firms grow.
The East Midlands led the region’s SME growth, with the population increasing by 1.5%—three times the UK average while wages rose by 4.2%. This may partly reflect recent investments in manufacturing, clean energy and infrastructure economies.
On a sector basis, finance and insurance was the strongest industry with a +1.3% increase in headcount, while Wholesale and Retail Trade led earnings growth of +4.4%. This comes amid much evidence of strong recruitment across technology, security and transformational roles in the insurance sector.
Yet recovery remains uneven
The number of people aged 65-75 increased by 7.4%, matching the strongest wage growth of any age group at 4.9%. Meanwhile, employment for 25-34 year olds fell by 1.8%, while workers aged 16-24 recorded weak wage growth of 1.9%.
Accommodation and food decreased most workers in any sector by -0.7%. Given the sector’s role as a gateway to employment, continued weakness could have wider implications for young workers and local highways.
All of this data can be used in your current business if you are thinking of expanding. Here’s what you need to remember.
Follow the talent: Choose your place near the people you need
The story of the East Midlands is a reminder that growth follows people.
When investment creates jobs, skills are gathered—and businesses create near-term profits.
So if you’re considering expansion, don’t start with a local deal. It is better to start with a picture of local talent.
University towns and cities are a reliable signal. A strong local university—especially one that runs courses relevant to your field—means a fresh intake of graduates entering the job market every year, as well as application schemes, career fairs and research partnerships to tap into.
Further education colleges are particularly important for skilled trades and technical roles, and many now combine design courses with local employers.
And don’t be discouraged by nearby competitors in the new planned area. In terms of hiring, it’s usually a bargain. When similar businesses come together, a pool of knowledgeable people is formed, as well as suppliers, training providers and networks of supporting professionals.
Finally, check practicalities: transport links, common commuting patterns, and whether offering mixed-use services can extend your catchment area beyond the nearest zip code.
Do the math before you commit
Pay varies widely across the UK, so check local salaries before you set them. The SME Workforce Pulse data is an excellent starting point.
The pitch is too low and you’ll struggle to attract anyone, of course. The pitch is too high and you could be straining your cash flow—and not solving your payment problem. Regional data such as SME Pulse, official statistics, and live job advertisements in the area will give you a realistic scope.
Look beyond salaries, too.
Compare property costs and business rates between shortlisted locations, and investigate local support—growth zones, business zones and local authority grants can reasonably reduce set-up costs.
And remember the full cost of employment: £10,500 Employment Allowance softens employer National Insurance for very small firms, but as our data shows, that protection decreases as you scale, so build the total cost of each new hire into your forecasts.
Calculate your first hire
Where possible, strengthen your growth through experienced local hires.
This should be someone who knows the market, brings a network, and can act as your champion on the ground.
They can also tell you what a realistic salary looks like, where good candidates spend their time, and what local things to miss in a head office job ad.
Then build your reputation as a local employer.
Show up at regional business events, build relationships with nearby universities and colleges, and write job ads that show you understand the area—not a copy and paste from HQ.
In a new environment, you are an unknown quantity, so every early interaction with candidates changes how the local market perceives you.
Prepare the working side before the first day of pay
Nothing undermines a new team’s confidence faster than a late or incorrect first payslip. Before anyone starts, make sure contracts are drawn up, right-to-work checks are complete, pension auto-enrolment is set up, and your salary is ready to go for a new place.
If your extension takes you to Scotland or Wales, remember that income tax rates and bands are different across the UK. Good payroll software will automatically use the correct tax codes, but it’s worth knowing when you’re talking take-home pay with candidates.
Public holidays can also vary, of course.
It’s also time to evaluate your HR processes: who onboards new starters to a new site, who answers their daily questions, and how you’ll keep a growing, highly dispersed team feeling like one business.
Get the admin humming in the background, and you’re free to focus on what expansion is really about: winning customers in your new market.
Final thoughts
The East Midlands’ unique data reveals what happens when investment, talent and opportunity come together in one place—and there’s no reason your business can’t ride the same wave elsewhere.
Choose your location among the people you will need, estimate the actual cost of hiring them, strengthen your move with solid local hiring, and have payroll and HR right from day one.
Make that foundation, and expansion stops being a leap of faith and becomes what it should be: the next confident step of a growing business.
Frequently Asked Questions
Choose a location based on access to the talent you need. Look for places with universities or colleges with teaching skills relevant to your field, existing clusters of similar businesses, good transport links, and payment levels that your budget can sustain. Weigh this against property costs, business rates and any local grants or incentives available.
Usually, yes. Areas where a cluster of similar businesses tend to have a deep pool of experienced people, as well as established suppliers, training provision and professional networks. While you’ll be competing for specific hires, you’ll also benefit from a job market that already understands your industry—which often makes hiring faster and easier than starting somewhere without an industry.
A combination usually works best. Experienced local hires bring market knowledge, contacts and credibility, while supporting a loyal existing employee helps transfer your culture and ways of working. If the budget is limited to one, prioritize local hires for customer-facing growth roles and support them closely within your existing team.
One payroll can cover employees anywhere in the UK. However, if you hire in Scotland or Wales, employees pay income tax under the Scottish or Welsh rates and bands, which are applied to their tax code. Modern payroll software handles this automatically, but you should include it when discussing take-home pay with candidates.
Start with the local growth center or the council’s business support team in the area you’re targeting – they can point you to costs, infrastructure and rental schemes. Business areas and ports offer incentives in some areas, while local universities and colleges often run paid internships, job training and apprenticeship programs that reduce early hiring costs.
