£3,000 Hiring Grant ‘Won’t Be Enough’ as Hospitality Jobs Growth Stalls, Warns Employment Expert

Following the Prime Minister’s hospitality roundtable earlier this week and the announcement of a £3,000 grant for hospitality businesses hiring 18–24-year-olds who have been out of work for six months, Employment Hero UK MD Kevin Fitzgerald has warned that the measure may not go far enough.

Employment Hero’s platform data shows employment growth in retail and hospitality has slowed sharply, from around 10% in May 2025 to just 0.4% a year later, as businesses absorb higher employer NICs, minimum wage increases and wider employment legislation changes.

Kevin Fitzgerald said:

“According to our platform data, which tracks business expansion among UK SMEs, employment growth within the retail & hospitality sector has slowed sharply since May 2025, following April’s increase in employer National Insurance Contributions and the introduction of the Employment Rights Act in Parliament.

“In May 2025, employment in the sector was growing at around 10%. A year on, that growth is sitting at 0.4%.

“Meanwhile, increases in national minimum wage and changes to employment legislation, which came into force April this year, have left many businesses wondering whether they need to close their doors. This shift has been felt most acutely by the youngest jobseekers who rely on these opportunities.

“Our research shows that employing someone full-time now costs nearly 10% more than it did 12 months ago. Against that backdrop, a one-off incentive, while welcome, will not be enough to offset the sustained increase in employment costs these businesses are facing.”