The 2024 Budget announcement has sent waves across the hospitality industry.
The announcement outlined many difficult pills for businesses to swallow, including an increase in National Insurance contributions for employers and a rise in both the National Living Wage and the National Minimum Wage.
Operators will doubtlessly already be thinking ahead to April 2025, and the impact these increased labour costs will have on their business. Making changes to your business as early as possible is critical to minimise this impact, but it can be hard to know where to even start.
We asked three hospitality experts for the advice they would give operators looking to manage the skyrocketing costs of labour.
Read on to find out what they had to say…
How much is Minimum Wage increasing by?
One of the most significant changes for hospitality announced in the Budget is a 16% increase in the National Minimum Wage for 18-20 year olds and a 6.7% increase in the National Living Wage from April 2025.
Kate Nicholls – Chief Executive of UKHospitality – states that this is “well above expectations”, increasing the cost of doing business by £1.9 billion for the hospitality industry.
“In response to rising labour costs, hospitality businesses can leverage technology for efficient scheduling, refine product ranges, and enhance staff productivity through cross-training.
Investing in digital training, flexible staffing models, and energy-efficient upgrades allows businesses to manage expenses without compromising service quality.
Embracing these innovations helps hospitality providers remain competitive and deliver an excellent guest experience despite industry challenges.”
“Managing rising labour costs? It’s a tricky dance but not impossible to master!
First, keep a close eye on your team’s strengths and lean into their talents to make operations smoother. Invest in training so your staff can be up skilled when needed—I always think it’s important to share the work load.
Next, technology is your friend. Tools that streamline orders, scheduling, and stock control can help reduce costs. We use kiosks in our store powered by Vita Mojo which allows us to be more productive and decrease labour day to day. We use nory for our work force management and get real time up to date labour costs and can make decisions quickly so things do not get out of control. Every small efficiency gain helps!
And remember, treat your team well. Happy staff stay longer, reduce hiring and training costs, and build a better customer experience. A motivated team isn’t just about morale.
Finally, stay creative. Whether it’s rotating your seasonal items or creating new concepts, always be evolving with the market. You never know which clever tweak could give you that little labour-saving boost!”
