Retail staff costs soar 10% amid national insurance and wage hikes

The cost of employing staff in entry-level roles has jumped by more than 10% for retailers across the country, with part-time staff experiencing a 13% increase, according to the British Retail Consortium (BRC).

These rises come in the wake of today’s National Insurance contributions (NICs) hike and last week’s increase in the National Living Wage.

The changes are set to cost the retail sector over £5bn a year, a figure that is expected to rise to £7bn with the introduction of the new packaging tax and extended producer responsibility in October.

The reduction in the NIC threshold—from £9,100 to £5,000—means that many more part-time and entry-level roles will now fall under the tax net.

This comes as the government rolls out its new welfare reforms, aimed at “helping people who can work to do so.”

Part-time roles, which accounted for 1.5 million positions in retail last year—according to the most recent Office for National Statistics (ONS) data—will now cost retailers 13.5% more based on a 15-hour workweek. This is the lowest number of part-time retail jobs on record.

Additionally, the BRC has warned that 160,000 part-time retail positions could be at risk over the next three years due to these changes.

BRC CEO Helen Dickinson said: “Part-time retail jobs hit their lowest level since records began in 1996, and have fallen by 200,000 in the last seven years.

“This matters: a local, flexible retail job is a vital stepping stone for many people, whether it’s a first job out of school or a part-time role for someone returning to the workforce or with caring responsibilities.

“While the government’s welfare reforms aim to increase the numbers in work, this week’s cost increases will kick away the ladder for many who are just getting their first foothold.”

The trade association boss continued: “Retailers have spent the last five months preparing for the consequences of these new costs on their businesses.

“While there will be an impact on employment, the government must consider how its future policies can mitigate this, making it easier for businesses to employ people.

“This includes ensuring the Employment Rights Bill improves workers’ rights without hampering job creation at this crucial time.”

The news comes after the ONS reported that the UK retail sector has cut almost a quarter of a million jobs over the past five years in March.

In February, the BRC also warned that one in ten part-time retail jobs could be lost over the next three years.

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