As the United Kingdom prepares for the upcoming minimum wage changes set to take effect on April 1, 2023, the hospitality industry is bracing for a significant impact. The hospitality industry is one of the largest employers of minimum wage workers in the UK, so business owners across the hospitality sector will be faces with the challenge of finding new ways to absorb the increased labour costs. Of course, there are also good things to note here: the change in minimum wage will have a positive effect on both staff and customers.
This blog will walk you through the changes that are soon to take place, advise you on how your business can combat the negatives, as well as remind you of the positives that this change will bring with it.
How much is minimum wage changing by?
For workers aged 25 and over, the new minimum wage rate will be £8.91 per hour, an increase of 2.2% from the current rate. For workers aged 21 to 24, the rate will be £8.36 per hour, a 2.3% increase. Meanwhile, the rate for 18 to 20-year-olds will be £6.56 per hour, a 2.2% increase, and the rate for under 18s will be £4.62 per hour, a 2.1% increase.
How can businesses combat their rising costs?
There are a few ways your business can combat the increase in wage spend. Naturally, your business can consider raising prices for customers to offset the increased costs, now is the time to assess whether this is a necessary step for you to take.
Alongside this, you can also increase the amount of money coming in by running promotions during your quieter periods - taking steps to increase your footfall will ultimately get more money in your tills. There is some great advice on how to navigate your business' seasonality in our blog here.
Another solution that can help to reduce costs is by streamlining the teams' workflows with software such as Opsyte. Opsyte can help to automate and optimise a number of processes within the business - and when time is quite literally money, this can help to reduce labour costs and increase efficiency.
The flip side: How the minimum wage change will benefit your business.
It isn't all rising costs and doom and gloom. It's definitely worth noting that the upcoming changes to the minimum wage will also have a positive impact on the industry. The increase in wages for workers will likely lead to increased consumer spending - capture this market with a strong offering and targeted deals.
The boost in wages for your workers is also likely to raise moral. With staff retention and recruitment an ongoing issue for the hospitality industry, the value of a happy and motivated workforce shouldn't be underestimated. See how Opsyte helps you track staff happiness in our blog here.
A final note.
Overall, the upcoming minimum wage changes will have an impact on the hospitality industry. Businesses will need to find ways to absorb the increased labour costs while also ensuring that they remain competitive in the market. It's important for businesses to stay informed about the changes and to plan accordingly to minimise the impact on their operations. Utilising software like Opsyte can be an effective solution in reducing costs and increasing efficiency.