According to the latest research by Legion Technologies, a leader in workforce management (WFM), many British retailers and hospitality businesses are facing significant wage increases and tax increases. This has led to a growing demand for investments in Artificial Intelligence.
Retailers are trying to reduce the impact of rising labour costs. The National Insurance Contribution and National Living Wage increases will add estimated PS5 billion this year to retail’s wages. AI is a better alternative to price increases or headcount cuts, according to the 2025 State of the UK’s Hourly Worker Report by Legion Technologies.
According to a survey of 1,000 UK retail workers and hospitality workers, 65% of managers are now aware of the need for automation in their labor operations. However, only 19% of them currently use AI-driven tools for scheduling. This means that significant efficiency gains have not been realized.
“Raising the price risks alienating inflation-weary and price-conscious customers, while cutting frontline employees threatens customer service, and could lead to lost sales. AI is a solution that comes from the opposite side. Eoin Houghan, Vice President for Europe at Legion Technologies commented that rather than pass on costs to customers or cut back on staff, retail and hospitality providers could leverage AI to increase the productivity and engagement among existing staff. This makes it imperative to invest in technology that boosts labour efficiency and retention.
In addition, the report found that hourly employee managers are struggling to manage time-consuming manual tasks. This is a drain on efficiency that businesses with rapidly increasing labour costs cannot afford. Scheduling, tracking attendance and managing compliance are all particularly difficult.
Nearly two thirds of managers (65%) spend more than three hour per week on tasks related to scheduling, and 52% spend even longer on tasks related to time and attendance. This inefficiency wastes time that could have been better spent on strategic tasks such as team building and coaching. 62% of retail manager say they would prefer to use the time gained from administrative tasks for this purpose, along with interacting directly with customers.
81% of retailers are not currently using AI-powered software to automatically generate schedules, despite Forrester’s Total Economic Impact Reportimg alt=”(tm)” class=”wp-smiley” rc=”https://s.w.org/images/core/emoji/15.0.3/72×72/2122.png” style=”height: 1em; max-height: 1em; “> for Legion suggesting that intelligent automation could reduce time spent on But 81% of retail managers are not using AI-powered software for automatically generating schedules. This is despite Forrester’s Total Impact Report on Legion stating that intelligent automation can reduce the time managers spend maintaining and managing schedules.
Houlihan said, “With AI-driven workplace management, managers can reclaim time and refocus on high-impact tasks that benefit their teams and their customers.” They can also instantly create flexible schedules to match employee skills and preferences with business needs, improving staff engagement and retention.
Nearly three quarters (72%) hourly retail workers polled by Legion cite schedule flexibility as the most important factor in influencing their job decisions. Over half (51%) also cite rigid scheduling as a key retention challenge.
Houlihan concluded that by investing in modern workforce technology, organizations can go beyond short-term cost cutting and unlock a more smart, sustainable way to increase both employee satisfaction and efficiency.
Legion Technologies will exhibit at Retail Technology Show, stand P20. They will showcase their latest WFM solutions which enable companies with high labour intensity to maximize both labour efficiency and employee satisfaction. The full report is available at 2025 Report on the Hourly Workforce in the UK.
The article UK retailers and restaurants turn to AI as a PS5 billion wage rise looms originally appeared on Human Resources News.
