As labour costs continue to rise, there’s a renewed focus on investing in technology that can help recoup some of that expense
The hospitality sector is facing its toughest test since Covid. The latest figures paint a stark picture: of the 164,641 jobs lost in the UK since the Budget last October, almost 89,000 were in hospitality alone. New analysis by UKHospitality shows the sector has accounted for 53% of all redundancies, confirming it is the hardest hit by tax hikes and labour cost increases.
The scale of the losses is staggering. One in 25 jobs in hospitality has disappeared – around 4.1% of the entire workforce. That’s seven times higher than the wider UK economy. These cuts have been driven in large part by increases to employer National Insurance Contributions (NICs), particularly the lowering of the threshold, which disproportionately affects part-time and flexible roles. The government’s own Office for Budget Responsibility predicted 50,000 job losses as a result of NIC changes but the reality has been three times worse.
It’s a reminder that when labour costs rise, hours are cut, jobs go and productivity suffers. For operators, the challenge is how to adapt without sacrificing service. This is where investment in technology is becoming all the more important.
Tradition has always played a huge role in the fish and chip industry. How many of you can say you know a customer’s order before they reach the till? Standing at the counter, chatting about the family is part and parcel of life behind the frying range for many shop owners. But technology isn’t about replacing staff, it’s about making their jobs easier, freeing them up for roles that add more value. Self-serve kiosks, for example, can reduce queues, speed up service, and even increase average spend. Not every customer will want to use them, but younger generations in particular prefer the convenience and speed of ordering without face-to-face interaction.
Mobile apps offer another opportunity, making it simple for customers to manage bookings, place orders, or redeem offers, without requiring a member of staff. Meanwhile, modern EPOS systems go far beyond processing sales. They provide insights into bestsellers, highlight when stock is low, and calculate gross profit. This level of data means you can make decisions based on what is in front of you, rather than on guesswork. It also helps forecast demand and cut waste while also offering tools for marketing, like sending birthday offers or filling quieter days with targeted promotions.
Staff scheduling software can also save hours of admin, automatically managing rotas, holiday requests and shift swaps, while kitchen display systems allow you to quickly organise and fulfil orders. Equally, AI answer machines can answer every call, taking bookings and complete orders even down to whether a customer wants salt and vinegar. With labour becoming increasingly expensive, tools like these help businesses run leaner and more efficiently. Whilst you might not want to implement all of these systems, finding the ones that work for you and your business could prove hugely productive.
For those worried about cost, it’s worth checking what grants or funding might be available locally. Some councils still have schemes to support investment in energy efficiency and digital transformation. A quick search could uncover support to soften the initial outlay.
The reality is that rising labour costs aren’t going away, and neither is the pressure on margins. While potato prices have come down, we know fish prices are going to remain high at least until 2027, when the quotas are hopefully increased. Businesses that embrace technology now will be the ones best placed to survive and grow in the years ahead.
