Beyond Cost-Cutting: Thriving in a High-Cost Labour Market

Rising Labour Costs Are Squeezing UK Businesses

Retail and hospitality leaders across the UK face numerous challenges, but one that is undeniably top of mind is soaring labour costs, even for the most well-established brands.

Effective April 2025, the National Living Wage has increased to £12.21 per hour, and employer National Insurance Contributions have risen to 15% following a 1.2% increase. The Centre for Policy Studies states that hiring a full-time worker on minimum wage will now cost businesses £2,583 per year in NICs alone—a 60% increase from 2024. Considering the total cost per employee has surged by £2,367 year-over-year, 2025 is taking the crown as the most expensive year on record for employing low-wage workers.

Add inflation and a cost-of-living crisis to the mix, and we have a maelstrom of rising costs. Between 2021 and 2024, UK prices jumped 20.8%. As would be expected, wages have risen nearly 10% annually, putting frontline roles on the firing line as businesses search for quick ways to cut costs without compromising service.

We’re already seeing visible effects of the Budget—Sainsbury’s earlier this year, announced job cuts and management restructuring in response to an anticipated £140 million increase in National Insurance costs alone. The British Retail Consortium estimates 160,000 retail jobs are at risk from the new budget measures.

High Pressure, Hard Choices—Or Is There Another Way?

With pressures as they are, retail and hospitality leadership often feel forced to choose between cutting staff and raising prices, but demand isn’t disappearing. Warm weather and bank holidays will continue to drive footfall, particularly for high-street shops and casual dining venues. The challenge isn’t whether customers will come—it’s how to serve them efficiently without labour costs spiralling—and still give them a reason to return.

Multi-location businesses will start to feel the strain even more. Payroll costs are amplified across sites, making it even more necessary to plan smarter, not just tighter. Businesses need a better way to match staffing to demand, maintain service consistency, and redistribute labour dynamically between locations—all without sacrificing customer experience.

This isn’t about cutting hours. It’s about making every hour count. Margins may be shrinking, but the work still needs doing—from stocking shelves to delivering top-tier service. The opportunity lies in unlocking more productivity from the workforce you already have. Nearly 9 in 10 managers say they want technology that calculates employee productivity hour by hour. 86% are interested in tools that identify top performers and automatically schedule them for peak times.

That’s where smarter workforce management makes the difference—ensuring the right people, with the right skills and performance, are in the right place at the right time, so every labour hour drives value.

Why Workforce Management is a Crucial Part of the Solution

The industry needs a mindset shift: labour flexibility isn’t just employee-friendly, it’s business-critical. With labour costs rising and demand patterns shifting, operational agility has become a must-have.

The most powerful lever for doing more with the resources you already have? Intelligent, AI-powered workforce management (WFM).

Legion WFM empowers retailers and hospitality operators to unlock peak productivity across their workforce while protecting service standards and employee satisfaction. Here’s how:

• AI-Optimised Scheduling: Legion aligns labour deployment to real-time demand by factoring in weather, local events, historical sales trends, and more. This ensures every shift is right-sized for traffic—reducing overstaffing, avoiding understaffing, and improving cost-efficiency.
• Productivity-Based Labour Decisions: Legion calculates employee productivity in real time, surfacing performance scores directly to managers. These scores inform scheduling decisions, ensuring that high performers are placed in peak shifts where they can deliver the most impact.
• Leaderboards: Legion empowers retail managers with enhanced visibility through dynamic leaderboards that spotlight top performers at a glance. With this real-time insight, managers can make smarter, data-driven scheduling decisions—aligning high-performing employees with peak shifts to maximise productivity and drive better business outcomes.
• Perfect Schedules that Meet Business and Employee Needs: Legion’s automated scheduling engine creates optimised rotas that meet business demand and employee preferences 96% of the time—helping retain top talent and reduce churn, without sacrificing performance.
• Cross-Site Labour Sharing: For multi-location businesses, Legion enables labour sharing across sites, allowing managers to redistribute available staff where they’re needed most. This boosts efficiency and ensures coverage, even when individual locations are short-staffed.
• Analytics that Drive Continuous Improvement: Legion doesn’t just automate, it learns. Its inbuilt analytics measure the real-world impact of schedules, forecast accuracy, and productivity scores, and refine its recommendations over time.

As labour becomes more expensive, the only sustainable path forward is getting more value from every hour worked. Legion helps businesses do exactly that—not by pushing people harder but by aligning the right people with the right skills at the right time and place.

The result? Greater productivity, lower costs, empowered managers, and engaged employees—all with less manual effort and more confidence in every staffing decision.

If you’re ready to see how smarter workforce management could transform your operations, get in touch for a demo and see Legion WFM in action.