Two-thirds or more of hospitality companies are reducing staff.

In April, the increase in employer’s national insurance will result in a reduction of staffing in more than two thirds of hospitality businesses.

According to a survey conducted by the British Beer and Pub Association and the British Institute of Innkeeping in conjunction with Hospitality Ulster and UKHospitality, 70% of respondents expected to reduce their headcount as a result of rising employment costs.

60% of respondents said they would cancel their planned investments. The trade bodies have urged the government to delay the NIC increase announced in the October Budget.

Nearly a third of respondents (29%) stated that they would cut back on trading hours due to the increased costs. 25% also said that they had no cash reserves. 15% said that they would need to close one or more sites in order to stay afloat.

The trade bodies stated that the government shouldn’t add costs to the industry, as this will negatively impact the employment rate and our ability to expand.

They have warned of potential loss earnings, job losses, reduced trading hours, and in some cases business failure. This would be the loss of vital community hubs which would otherwise drive local economies and create jobs.”

Kate Nicholls of HospitalityUK, the chief executive officer, asked the government earlier this month to defer “regressive” changes to NIC contributions, and the threshold where they are paid.

According to the body, one fifth of the workforce in the sector will be affected by the new threshold for employer NICs. Nicholls suggested that the government consider alternatives such as introducing an additional 5% employer NIC rate for earnings between PS5,000 to PS9,100.

According to the latest figures from the Recruitment and Employment Confederation, postings for jobs have increased since June 2024.

Employers’ contributions to national insurance will increase to 15% in April from 13.8%. The threshold for paying contributions will also decrease, from PS9100 to PS5,000.

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