Equipping the hospitality sector as wages rise

In November 2023, the UK Chancellor of the Exchequer, Jeremy Hunt, announced that the national living wage is to rise by almost 10% to £11.44 per hour from April 2024. This policy is based on recommendations from the Low Pay Commission (LPC) – the body set up to advise government on the recommended level for the national minimum wage.

Wages within the hospitality sector have risen significantly over the last few years, partly due to the national living wage rising but also due to staff shortages and the impact of Brexit.

Research, carried out by Hazlewoods and published in February this year, indicated that wages in the hospitality industry increased by 23% from 2021 to 2022. Last month, in their September report ‘Hospitality Workforce Strategy – one year on’, UKHospitality reported that wages for their members had risen by 12% over the past year, comparatively higher than the national living wage increase which rose by almost 10% in April 2023 from £9.50 to £10.42 per hour.

Staff shortages and the knock-on effect of Brexit has also caused wages to rise. The new immigration system that came into effect following Brexit means overseas workers need a skilled work visa, yet few positions within the hospitality sector fulfil the required criteria. Consequently, many businesses have had to reduce opening hours or close early due to a lack of staff, and competition between businesses seeking to recruit employees has also pushed wages up.

Historically the industry has had a reputation for long hours and low pay so whilst higher wages are positive for employees and the reputation of the industry, they increase the pressure on hospitality businesses that are already contending with high food and energy costs.

To help support and equip businesses within the hospitality sector, arena4finance is offering a free eBook sharing best practice techniques for managing labour costs and maximizing gross operating profit. The ebook contains advice on the ratios and KPI’s to use to monitor payroll and related costs and tips on how to control the monthly payroll costs.

To access your free copy please email us at [email protected].

Chancellor announces major increase to National Living Wage - GOV.UK (www.gov.uk)

National living wage to rise to £11 an hour, Jeremy Hunt confirms - BBC News

Average Wages for Hospitality Works Rise - Hazlewoods

Hospitality Workforce Strategy: one year on - UKHospitality

Hospitality wages rise by 53% over the past 10 years - The Caterer

Photo courtesy of Mikhail Nilov - Pexels

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About arena4finance

Arena4finance offers a range of courses and resources for the hospitality industry including online and face to face training, an online community with access to resources plus coaching and mentoring for both hospitality finance professionals and operational managers. We can help you to understand and interpret financial information and management accounts. We have a great team of experts on hand to meet all your professional development needs for improving hospitality management accounting skills and knowledge.

Our courses are powered by our online learning community resources at www.finance4hospitality.co.uk. For more information about arena4finance, email [email protected].