Mike Worley, Managing Director, HIT Training
The new year has only just begun and hospitality businesses are already hearing how 2025 could be the toughest year yet, with UKHospitality predicting over £1 billion in additional costs from increased Employer National Insurance Contributions (ENIC). While many will no doubt feel the strain of increased staff costs on already tight operating margins, the industry has consistently proven itself to be remarkably resilient when under pressure – whether it be the Covid pandemic, energy price shocks or the cost of living crisis.
The hospitality industry continues to reinvent itself thanks to its immense creativity and innovation, but there are also existing solutions that many hospitality businesses fail to utilise effectively. In this challenging environment, apprenticeships offer a practical route for hospitality businesses to reduce costs and build a skilled, motivated workforce for long-term growth.
The Financial Case for Apprenticeships
The upcoming rise in NI contributions has hospitality businesses seeking ways to manage costs without stifling growth. However, many business owners remain unaware that employees under 25 enrolled in approved apprenticeship programmes are exempt from NI contributions, offering significant payroll savings.
Additionally, levy transfers allow larger organisations to share up to 50% of unused apprenticeship funds with smaller businesses, reducing financial barriers to recruitment. This provides a cost-effective solution for smaller hospitality companies to upskill staff while building a sustainable talent pipeline. By making full use of these benefits, hospitality businesses can cut costs, invest in future talent, and meet workforce demands more effectively.
Closing the Skills Gap
As well as offering financial savings, apprenticeships also address critical skills shortages. The Government’s recent Get Britain Working initiative highlights the need to not only get people into work but also propel them forward in their careers. Apprenticeships support this goal by delivering practical, high-value training in essential areas such as customer service, supply chain management, and accountancy.
Through structured, tailored training, apprentices bring indispensable skills from the very first day they enter the business. Apprentices don’t just plug immediate skills gaps, but they also provide greater value to a business over a longer period. By offering staff a clear pathway to career development, hospitality businesses can attract, retain and grow a loyal, high-skilled workforce capable of evolving with their business.
The Wider Economic Case
The hospitality sector is a cornerstone of the UK’s economic infrastructure, supporting industries such as tourism and construction, which rely on hospitality for accommodation and dining services. Apprenticeships can play a crucial role in strengthening these connections by giving learners a broad perspective of different industry needs and enhancing networking opportunities that can lead to more business.
In addition, apprenticeships promote inclusivity by opening doors for people from diverse backgrounds and addressing underemployment. Post-pandemic, over 165,000 workers aged 50 and over have joined the hospitality industry. Apprenticeships can help these individuals upskill while re-entering the workforce, creating a more dynamic and resilient economy. They also help to create more dynamic and resilient businesses, bringing vital skills and experience which can add value in new ways, as well as plug existing gaps.
How hospitality businesses can lead the way
Apprenticeships are a ready-made solution for navigating increased staffing costs, bridging skills gaps, and boosting economic resilience. They are more than a cost-saving measure—they’re a strategic investment in growth and sustainability.
There’s no better time for hospitality employers to step up and take action. By utilising apprenticeships, businesses can weather the current challenges and build a strong foundation for the future.
For more information on how apprenticeships could benefit your business: https://hittraining.co.uk/
