New government data shows Britain’s hospitality sector has the largest drop in payrolled positions in the UK employment market.
Latest figures from the Office for National Statistics show hospitality businesses are cutting jobs at an accelerated pace, with the sector accounting for the majority of employment reductions alongside retail since last October.
The data suggests operators are still grappling with the financial impact of April’s dual hit from increased employer National Insurance contributions and minimum wage rises.
This moderation comes as employers across multiple sectors, particularly in hospitality, have reduced their workforce numbers for ten of the past twelve months.
The employment landscape has shifted for hospitality operators, who now face a more challenging recruitment environment. Job vacancies have been on a downward trajectory since early 2022, falling to 718,000 in June, a quarterly decrease of 44,000 positions.
Speaking about the data, ONS director of economic statistics Liz McKeown noted that hospitality businesses are among those providing fewer job opportunities, contributing to the overall decline in available positions.
The combination of higher wage floors and increased employer contributions has created a storm for labour-intensive hospitality businesses, many of which operate on tight margins.
The hospitality sector’s employment challenges mirror wider economic headwinds, with unemployment holding steady at 4.7% in June. This represents an increase from 4.2% twelve months ago and 3.9% before the pandemic, indicating a gradual cooling of the jobs market.
Kate Nicholls, chair of UKHospitality, said: “Today’s employment figures show that hospitality and retail – the sectors most heavily impacted by changes to employer National Insurance Contributions (NICs) – continue to bear the brunt of job losses.
“The biggest fall in employment is among younger workers, those seeking their first roles, in entry level jobs or holiday jobs. A group that is now losing out on opportunities to gain vital experience and essential skills.”