The question of relation between innovativeness and employment growth has been the focus of research for already quite some time. The debate revolves around attempts to answer the question of whether innovative activity conducted by enterprises boosts employment growth or just to the contrary – leads to the liquidation of jobs. The subject of research in this area are usually medium and large enterprises. Meanwhile, the SME sector is an important creator of employment growth - unfortunately, the research of the SME sector is definitely less frequent. The primary aim of this paper is to analyse and assess the relation between innovativeness of Polish small and medium enterprises and employment increase in the SME sector. Analysis of literature, reports, accessible statistical data and Author’s own empirical study led to formulate the following research hypotheses: (h1) There is a relation between innovativeness of Polish SMEs and employment growth in this sector. (h2) Increase of innovativeness in the researched SME enterprises results in increased employment. For verification of research hypotheses, the Author studied the available reference literature regarding determinants of company innovativeness, in particular with regard to the SME sector and its relation to employment, followed by empirical study of relation between innovativeness and employment. The article uses the results of empirical research on a group of 200 enterprises from the SME sector, carried out by the author in the period 2016-2020.