Operators to face £100k in workforce costs by 2020

Claire Dodd

Claire Dodd

06 April 2017

Hospitality operators employing 30 full-time staff could face a hefty workforce cost increase of over £100,000 over the next three years, as increases to the Living Wage, National Wage and pension contributions stack-up.

The warning comes from hospitality industry business analytics provider, Tahola, which further advises businesses to prepare for rising food inflation, a potential reduction in the size of the labour market caused by Brexit and ongoing business rate increases.

The new National Living Wage kicks in today, increasing the rate for over 25's from £7.05 to £7.50 per hour. However, the rate is set to increase £9 per hour by 2020.

Planned increases in employer pension contributions from 1% to 3% by 2019, could also impact operators. Tahola says the increased salary costs for businesses with 15 full-time staff would total £843.75 per week or £43,875 per year by 2020. 

Simon Blackbourne, co-founder and commercial director of Tahola said: 'Based on an operator with 30 full-time staff receiving the new National Living Wage of £9 per hour and a 3% employer pension contribution, our data mixologists have identified that annual pension costs alone could be set to rise an additional £8,900 per year – combining this cost with increased wages could amount to a staggering additional cost of over £109,000 by 2020.

'The hospitality industry can be wildly unpredictable, and Brexit is only compounding the sectors sense of uncertainty when it comes to changes in government legislation. Just looking at the labour cost changes we already know about, there’s a strong indication that the cost of a full-time employee could rise significantly in the near future.'

 

 

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