Impact of NMW and NI increases - how EPS can support you
The hospitality sector, a cornerstone of the UK's economy, is facing significant financial adjustments with the recent increases in the National Minimum Wage and employers' National Insurance Contributions. These changes, while aimed at improving employee welfare, present both challenges and opportunities for businesses within the industry.
Impact of the new National Minimum Wage
The increase in the National Minimum Wage is designed to ensure a fairer income for employees, helping to reduce income inequality and improve living standards.
Whilst the increase in payroll costs cannot be ignored, the raise in wages also has the potential to boost employee morale and reduce turnover. For the hospitality sector, which employs a large number of minimum wage employees, this could contribute to a more stable and motivated workforce.
However, businesses must navigate these changes carefully. The increased wage bill can lead to higher operational costs, which might necessitate price adjustments for services offered. This balancing act is crucial to maintain competitiveness while ensuring brand standards.
Impact of increased employers' National Insurance Contributions
From April 2025, employers' National Insurance Contributions will rise from 13.8% to 15%, and the threshold for these contributions will be lowered.
This change further increases the financial burden on hospitality businesses, which are already grappling with inflation and rising energy costs.
The combined effect of higher wages and increased insurance contributions could lead to cost-cutting measures such as reduced hiring, limited working hours, or even redundancies.
How using the EPS people management system by Eproductive can help
In this challenging environment, the EPS people management system by Eproductive offers a lifeline for hospitality businesses. EPS is designed to streamline HR processes, improve efficiency, and control costs, making it an invaluable tool for navigating these financial changes, including:
Pay Review and Pay Review Modelling: The primary way EPS can support hospitality businesses through the upcoming changes is with the Pay Review module, which provides a quick and easy way to approve and upload in bulk the increases required to stay compliant with the NMW legislation. The same screen can be used to process any additional uplifts outside of NMW, making the annual pay review a smoother process.
In addition, the easy-to-use modelling functionality, which can be used at any time of year, allows businesses to try out different options for pay changes and to preview what the eventual costs would be once the new rates are inputted in the system. This information can then be reviewed and analysed before implementation and the preferred model can then be transferred to the pay review screen to activate those changes.
Comprehensive HR database with reporting: EPS provides a single view of all employee data, automating holiday and lieu entitlements, and managing absences from the business such as holiday and sickness. This is supported by a comprehensive reporting suite, with hundreds of reports providing vital information which can be used, among other things, to monitor costs.
Time and Attendance (T&A) management: Accurate recording of hours worked, with biometric recognition options, helps ensure precise payroll calculations and reduces human error.
Scheduling and compliance: EPS offers scheduling tools that help manage staff efficiently, ensuring compliance with employment laws and optimising workforce deployment – putting the right people in the right place at the right time.
Integration capabilities: EPS integrates seamlessly with third-party payroll, accounting, and training systems, reducing the need for double-keying data and ensuring timely and accurate information transfer.
Cost control: By providing real-time insights into labour costs and performance against budgets, EPS helps businesses identify areas for operational improvements and cost savings.
In conclusion, while the new National Minimum Wage and increased employer National Insurance Contributions present significant challenges for the hospitality sector, the EPS people management system by Eproductive can help businesses adapt and thrive.
By utilising sophisticated HR and payroll features, hospitality businesses can maintain efficiency, control costs, and continue to make the most of their greatest asset – their employees.
