Staffing costs surge: the industries facing rising labour expenses this Autumn
With recent figures revealing that rising labour costs are one of the leading causes of declining business confidence, new research has revealed which industries are most concerned about staffing costs this Autumn.
As we enter the colder, quieter months of the year many businesses are facing tighter financial margins, with higher energy bills in particular presenting a big challenge. But what impact does this have on firms and their staff?
The business experts at Sopro have analysed ONS data to reveal the industries most impacted by concerns about staffing costs and offered tips on how businesses can overcome these challenges.
The industries hit by rising staffing costs the hardest
Rank | Industry | Costs have increased (% of businesses) |
1 | Accommodation and food service activities | 33.3% |
2 | Administrative and support service activities | 24.4% |
3 | Real estate activities | 23.9% |
4 | Manufacturing | 22.5% |
5 | Wholesale and retail trade; repair of motor vehicles and motorcycles | 20.9% |
Accommodation and food service activities
A third (33.3%) of accommodation and food services businesses have seen staffing costs increase in the last three months, the highest rate of any industry. Autumn marks the beginning of another busy season for the industry, especially in tourist destinations. This means that businesses are required to hire additional, often temporary, staff at higher rates, adding to the already high financial burden of payroll.
Administrative and support service activities
Administrative and support service activities are in second place, where almost a quarter (24.4%) of businesses have seen staffing costs rise in recent months. As we head into autumn, this can pose a strain on firms as business starts to wind down for the quieter months of the year for this sector.
The sectors most concerned about rising staffing costs this autumn
Rank | Industry | Expect costs will increase (% of businesses) |
1 | Human health and social work activities | 45.4% |
2 | Education | 25.7% |
3 | Administrative and support service activities | 21.1% |
4 | Accommodation and food service activities | 20.9% |
5 | Real estate activities | 20.5% |
Human health and social work activities
Almost half (45.4%) of businesses in human health and social work activities expect to see an increase in staffing costs this autumn. This sector frequently experiences a shortage of skilled healthcare professionals, including nurses, doctors, and specialists. Firms may be forced to offer higher salaries or hire costly, temporary agency staff to meet the demand for crucial services.
Education
Education is second, with a quarter (25.7%) of businesses in this sector expecting staffing costs to increase over the next few months. Payroll is likely to be impacted in autumn for this sector due to pay increases negotiated by the government and teaching unions.
Steve Harlow, chief sales officer at Sopro, comments on how businesses can overcome the autumn slump:
“The rising cost of business at this time of year can have a significant impact on finances, as well as the ability to innovate and grow. However, innovation and expanding your customer base are key to remaining competitive and achieving long-term business success.
“Businesses can survive the challenging autumn months by tightening their sales and marketing tactics to generate new business, keep customers engaged, and maintain a steady stream of sales to beat the financial downturn.
“Here’s how you can put these tactics into practice:
Maximise Prospecting Efforts: “It’s wise to ramp up your prospecting and lead generation efforts as we enter the quieter months of the year to identify new potential clients and proactively drum up new business. These tactics employ targeted outbound marketing activities, such as emails, phone calls, and social media messaging.
Analyse Your Sales Funnel: “Monitoring the success of your prospecting and lead generation efforts enables you to make swift adjustments for the best chance of successful conversions. Regularly evaluate your leads and customer experience to identify areas for improvement and modify your strategy accordingly.
Adapt: “Embrace the seasonal shift and use it to your advantage, incorporating seasonal messaging and deals into your marketing and sales efforts to bolster interest.
“By fine tuning these tactics, you can draw in more customers and maintain stability, allowing you to navigate the autumn season with more confidence and success.”
