Can HR Save Hospitality? Sector Faces Crisis Amid Rising Costs

The UK hospitality industry is under intense pressure, with new tax hikes pushing a third of businesses – including pubs, restaurants, hotels, and bars – into operating at a loss.

Following April’s changes to employer National Insurance and reduced thresholds, businesses are contending with soaring costs, leading many to cut jobs or slash staff hours.

With staffing costs now a major concern, HR leaders across the sector are being urged to step up and steer their organisations through this period of instability. Strategic people management could be the key to survival.

Prioritising Retention and Upskilling

Hospitality has long struggled with high employee turnover, but in today’s climate, retaining experienced and motivated staff is more critical than ever. HR professionals are being encouraged to focus on structured training programmes, clear development pathways, and staff recognition initiatives that not only boost morale but also reduce churn.

Navigating New Employment Legislation

Upcoming employment reforms – including the removal of the two-year qualifying period for unfair dismissal and changes to the use of zero-hour contracts – will have a direct impact on how hospitality employers manage their workforce. HR departments must ensure that their policies are both compliant and adaptive, safeguarding businesses while protecting employee rights.

Fostering a People-First Culture

As hospitality recovers from years of disruption, creating a supportive workplace culture has become a top priority.

Employers who invest in employee wellbeing, flexible work options, and inclusive environments are more likely to attract and retain the talent they need to deliver exceptional customer service.

A Call to Action for Hospitality HR

As financial pressures mount, hospitality can no longer afford to treat HR as an afterthought. From safeguarding staff wellbeing to ensuring compliance with new laws, HR professionals hold the tools to help businesses weather the storm. Now is the time to invest in people – not only to survive the crisis, but to build a stronger, more resilient sector.