Will UK wage increases hurt Hospitality? New US research suggests it won’t

There’s been a lot of scaremongering in the UK from the press, businesses and some professional associations and trade bodies about the new National Living Wage (NLW) and the “burden” its salary increase will place on retail, care and hospitality businesses, which often employ lower paid staff.

Increased wages are a way to reward hard working staff

The Institute of Hospitality takes a more positive perspective. Our Chief Executive, Peter Ducker, posits that the National Living Wage is an opportunity for hospitality businesses to retain and reward their best employees. And new long-term research from hospitality experts in the United States suggests wage increases won’t have the negative effect the naysayers are suggesting.

According to academic research published by Cornell’s Center for Hospitality Research (CHR) at Cornell’s School of Hotel Administration (SHA), “US federal and state minimum wage increases over the past twenty years have not resulted in fewer restaurants or lower employment in the United States”. The new study, “Have Minimum Wage Increases Hurt the Restaurant Industry? The Evidence Says No!,” was written by SHA faculty Michael Lynn and Christopher Boone and is available FREE from CHR.

To control any impact on the organisation and its employees, hospitality businesses should prepare now for the increased salary costs resulting from the NLW. Instead of viewing the NLW as a burden, businesses should see it in a positive light. The Institute’s new Management Guide, from contributors BusinessHR, explains what hospitality employers need to know to get to grips with the NLW and reward their hard-working employees. Find the new guide at Management Guides.




Hospitality Managers: new #IoHWebinar helps you get to grips with forthcoming wage challenges

This operations-focused #IoHWebinar outlines how hospitality managers can prepare for – and reduce the impact of – several forthcoming pay challenges affecting UK businesses.

The experts from BusinessHR will discuss what these wage challenges mean for hospitality owners and operators. The changes begin with the mandatory National Living Wage, effective on 1st April 2016, followed by successive wage increases over the next four years. Modifications to holiday pay, overtime, equal pay and working time are covered, too.

Make sure your business can handle the NEW wage challenges with our #IoHWebinar
Make sure your business can handle the NEW wage challenges with our #IoHWebinar

In this #IoHWebinar, scheduled for 1st March at 3pm, BusinessHR’s experts will explain how the wage challenges require careful planning and systems changes to ensure compliance and to avoid penalties. Webinar attendees will also receive a FREE pdf guide explaining the necessary steps to prepare for the National Living Wage and further wage increases whilst safeguarding the business and its employees.

Attendees will have the opportunity to have their questions answered by the BusinessHR experts during the webinar.

Managers, are you certain your business knows all it needs to about these changes and how to manage them? If not, this new #IoHWebinar is a ‘must-attend’ event.

Book HERE to ensure you have a seat at the #IoHWebinar on Tuesday, 1st March 2016 at 3pm and be ready for the wage changes coming our wage.

Managing the UK’s forthcoming National Minimum Wage and the introduction of the National Living Wage

Learn how to manage NMW and NLW with Institute resources
Learn how to manage NMW and NLW with Institute resources

There appears to be a storm brewing in the hospitality industry as claims that the increase to the National Minimum Wage (NMW) next month and the introduction of the National Living Wage (NLW) will negatively impact UK hospitality sector. It is projected that the NLW could increase hospitality payrolls by up to 3.5% by 2020. The retail and care sectors will also be impacted.

What hospitality managers need is good guidance to manage the changes to ensure minimal impact to the workplace. The Institute is providing detailed guidance for employers explaining the NMW and NLW changes and how to manage them styp-by-step. The information is provided by the human resources experts at BusinessHR, a resource that also makes up part of every Institute member’s benefits package. Members can click on the NMW and NLW guidance HERE.

For articles about the forthcoming changes, see the following:

Although much of the recent reporting has been negative, it’s important to consider the wage changes as a way to benefit loyal and hard working hospitality employees. The industry’s recent productivity problems, highlighted in a 2015 productivity report from People1st, show that retention and training of current staff can be an effective way of building a better and more productive business. Consider the costs of staff turnover, the replacement and training costs for each new staff person and even the interruptions to service inexperienced staff can bring in the workplace. Improved wages could be a great way to build and retain a skilled hospitality workforce.

Our industry’s growing vacancy rates and ultra-competitive hiring landscape mean retention should be one of the most important methods in every business’s HR process. The up-to-date resources and information provided by the Institute to its members means they can successfully navigate any stormy weather ahead.