ONS labour market statistics show average weekly earnings in the food and accommodation sector has risen 12% to £581.64 in Q3 2024, from £518.01 in Q2 2024 – the highest quarter on record.
Employment in leisure and hospitality increased by 0.22%, which was the first year on year uplift since Q3 last year. Vacancies in the sector continued a downward trend at 94,000 in the three months to October 2024, from 98,000 in July 2024.
Saxon Moseley, head of leisure and hospitality at RSM UK, said:
“Despite some respite last quarter, another sharp jump in wages highlights acute staffing challenges and pronounced pressure on wage inflation, and in turn margins.
“With vacancies continuing a downward trajectory and employment slightly up for the first time since Q3 last year, operators look to have re-evaluated operations ahead of the national minimum wage increase in April 2024 to mitigate the impact on costs.
“However, if staffing efficiencies have already been made, businesses will find it more difficult to protect margins, and ultimately the viability of roles and the business, when faced with the additional tax headwinds post-Budget. When you consider the cost of employing a full-time employee could increase by up to £2,500 with the proposed NIC changes, National Minimum Wage increases and the extra compliance burden, the industry is bracing for impact and many businesses could be facing a financial cliff edge.”/
