UKHospitality: The cost of employing a full-time staff member will increase by £2,500

Analysis by UKHospitality has said increases to employers’ National Insurance contributions and wages will hit hospitality the hardest, with a 10% rise in the cost of employing a worker – at least £2,500 per employee.

 

UKHospitality’s cost breakdown is based on a typical worker, aged 21 years or older, earning the National Living Wage and working 38 hours per week.

 

For such a worker, an employer’s National Insurance contribution will rise 53.9% from £1,863 to £2,869. 

 

The costs will hit every part of the workforce, according to UKHospitality. A single parent working 9am to 3pm, five days a week will cost £2,100 more to employ, while a student working 14 hours at the weekend will cost £1,140 more to employ.

 

Kate Nicholls, chief executive of UKHospitality, said: “The new cost of employing core members of staff is eye-watering – an increase of at least £2,500 is far, far beyond what anyone’s worst case scenario was.

 

“The overwhelming feedback from the sector is that this is just not sustainable and will ultimately do real harm to our ability to support employment.”

 

She added: “Hospitality venues will now have to ditch their ambitions to employ more people and do the very opposite – cut hours, scale back recruitment, and, in extreme circumstances, let people go, because they simply can’t afford the scale of these costs.

 

“We understand the challenging state of the public finances, but balancing the books disproportionately at the expense of high street businesses will ultimately have negative consequences for growth, investment, employment, and our communities.”

 

Read more: What does the Autumn Statement mean for hospitality?