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In a sector where agility and human connection are everything, the UK hospitality industry is now navigating a perfect storm of legislative pressure, cost inflation, and economic uncertainty. On a recent episode of Inside Hospitality, Fourth CEO Clinton Anderson sat down with UKHospitality’s Kate Nicholls and Fuller’s People Director Dawn Browne to unpack the real-world impacts of government policy—from minimum wage increases and National Insurance Contributions (NICs) to the incoming Employment Rights Bill—and what they mean for operators, employees, and the future of the industry.
The UK hospitality sector has shown extraordinary resilience through Brexit, COVID, energy crises, and inflation. But as Nicholls notes, it now faces “the most regressive tax change” in recent memory, with April’s budget alone delivering a £3.4 billion cost increase to operators through changes to NIC thresholds, wage hikes, and business rates.
These changes disproportionately affect hospitality, where entry-level, part-time work is foundational. Lower NIC thresholds mean that part-time workers—students, parents, and those returning to the workforce—have become significantly more expensive to employ, reducing operators’ flexibility and cutting into already slim margins.
While policies such as raising the National Living Wage may be well-intentioned, Browne argues that layering costs without considering their cumulative effect risks driving the opposite outcome—fewer job opportunities, reduced hours, and flattened salary progression.
“It becomes significantly more challenging for us as a business to maintain differentials between roles,” she explains. “Why would someone aspire to become a manager if their pay isn’t much better than the entry-level wage?”
The financial pressure is also threatening the sector’s ability to innovate and invest. According to Nicholls, “Margins have been reduced by 40% since COVID. You’re removing the small profits we use to reinvest in training, new sites, or tech.” For smaller businesses or new entrants, the barriers to growth are getting steeper.
Hear directly from UKHospitality’s Kate Nicholls, Fuller’s People Director Dawn Browne, and Fourth CEO Clinton Anderson as they unpack the real cost of legislation on UK hospitality—and what operators can do about it.
Technology, particularly workforce management software, is helping operators cope. As Fourth’s Ali Barlow noted, automated payroll compliance, smarter recruitment tools, and flexible scheduling software are empowering managers and easing admin burdens.
With the right digital tools and a supportive operating environment, hospitality businesses can continue offering rewarding careers and exceptional guest experiences.
Despite these headwinds, hospitality leaders are finding ways to adapt without compromising on what matters most—people and experience. As Dawn Browne of Fuller’s puts it, “Happy teams mean happy customers—and more money in the till.” It’s a simple equation, but one that continues to hold true.
Faced with a third of annual profits being wiped out by rising labour costs, Fuller’s leaned into its long-standing investment in people. By offering healthcare cash plans, flexible work arrangements, and continued investment in learning and development, they’ve reduced churn and protected team morale—enabling them to weather a tough labour market while staying attractive to jobseekers.
To protect this cycle of value, operators are:
Hospitality thrives on people, flexibility, and experience. While economic and legislative changes create undeniable pressure, operators are showing remarkable resilience and adaptability. By investing in technology, people, and purpose-driven leadership, they’re not just surviving—they’re setting new standards for sustainable hospitality.
BKUK used Fourth’s Auto-Scheduling to improve labour accuracy and reduce costs across 293 Burger King restaurants. The result? A 1% labour cost saving per site, a 7–10% boost in deployment accuracy, and better-staffed peak periods.
Save time, reduce costs, and increase profitability with Fourth’s intelligent solutions.
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