How Smart Hospitality Operators Are Using Agency Staff to Beat Rising Employment Costs

The UK hospitality sector is navigating one of the most difficult cost environments in living memory. With employer National Insurance contributions rising sharply in April 2025 and the National Living Wage increasing alongside it, operators are being forced to rethink how they staff their kitchens and venues. A growing number are finding a smarter answer in agency staffing not as a last resort, but as a deliberate part of their strategy.

What Has Changed? The 2025 Employment Cost Increases Explained

Q: What exactly changed with employer National Insurance in April 2025?

In April 2025, the UK government increased the rate of employer National Insurance contributions from 13.8% to 15%. At the same time, the threshold at which employers start paying NI dropped significantly from £9,100 to £5,000 per employee.

In practice, this means two things. First, you pay a higher rate. Second, many part-time and casual kitchen staff who previously fell below the NI threshold now trigger employer contributions for the first time.

For hospitality businesses where a high proportion of the workforce is part-time this double impact is particularly sharp.

Q: What about the National Living Wage increase?

From April 2025, the National Living Wage rose from £11.44 to £12.21 per hour a 6.7% increase. For workers aged 18 to 20, the National Minimum Wage rose from £8.60 to £10.00 per hour.

These are the largest wage floor increases the sector has seen in consecutive years. Many hospitality businesses spend close to a third of their total revenue on payroll. When the floor goes up this much, it affects the entire pay structure not just staff on minimum wage.

Q: How is this affecting hospitality businesses right now?

The picture is stark. According to UKHospitality, the sector shed over 9,000 jobs in the months following the Budget, and over 20,000 fewer people were employed in hospitality between September and December 2025 compared to the same period the previous year.

One in three hospitality businesses is reducing operating hours. One in eight is closing locations entirely. Many are restructuring how they hire.

External link: UKHospitality Industry Facts and Stats data on sector employment and cost pressures.

Why Agency Staffing Is Becoming a Strategic Choice, Not Just an Emergency Fix

Q: How does using an agency help with employment costs?

When you use a relief chef or temporary hospitality worker through a recruitment agency, you pay one all-in charge rate. That rate covers the worker’s pay, their holiday pay accrual, employer National Insurance, and the agency’s fee. You do not carry any of those employment liabilities directly.

This matters because it shifts variable labour from a fixed cost to a true variable cost. You use agency staff when you need them, you stop when you do not, and you have no ongoing employment obligations in between.

The financial comparison looks like this:

• Permanent employee: base salary + employer NI (15%) + pension auto-enrolment (minimum 3%) + holiday pay (12.07%) + sick pay + recruitment costs if they leave
• Agency worker: one charge rate. Everything else is handled by the agency.

For a role paying £30,000 a year, the true employer cost of a permanent hire runs at approximately £36,000 to £38,000 once NI, pension, and holiday are factored in. An agency chef at an equivalent level, booked for the actual shifts required, can be a more cost-efficient model depending on how many days per week they are needed.

Q: Is this a new trend, or has it been building for a while?

It has been building, but the April 2025 cost increases have accelerated the shift significantly. The conversations we are having with clients at Goldstar Recruitment have changed noticeably. A year ago, most calls were reactive a chef had just called in sick, or someone had quit without notice. Increasingly, we are talking to operators who want to plan their flexible staffing resource in advance, rather than scrambling when something goes wrong.

This shift mirrors what has happened in other sectors. Industries like logistics and retail restructured their workforce models years ago to separate core permanent headcount from flexible resource. Hospitality is catching up.

The Employment Rights Bill: Another Reason to Rethink Zero-Hours Rosters

Q: What is the Employment Rights Bill and why does it matter for staffing?

The Employment Rights Bill, introduced by the Labour government in October 2024, is working its way through Parliament and is expected to come into effect from August 2026. One of its key provisions will effectively end zero-hours contracts in their current form.

Under the proposed rules, employers will be required to offer workers on zero-hours or low-hours contracts a guaranteed-hours contract that reflects their actual average working pattern over a reference period currently proposed at 12 weeks.

For hospitality businesses that rely on a bank of casual staff booked as and when needed, this creates a significant compliance challenge. If those casual workers regularly do, say, 20 hours a week over a 12-week period, the business may be legally required to offer them a 20-hour contract removing the flexibility the arrangement was built on.

Q: How does agency staffing avoid this problem?

Workers employed through a recruitment agency are employed by the agency, not by the venue. This means the venue does not carry the employment relationship and therefore does not face the zero-hours contract obligations that the Employment Rights Bill will impose on direct employers.

For operators who currently rely on a pool of casual staff on flexible terms, transitioning a proportion of that workforce to agency-supplied staff is one of the cleaner ways to maintain operational flexibility without the legal exposure.

External link: Employment Rights Bill — Parliament.uk overview full legislative detail and progress.

What to Look for in a Hospitality Recruitment Agency

Q: Not all agencies are the same. What should operators be looking for?

The right agency partner can make a genuine difference to how smoothly your kitchen runs. The wrong one can make things worse. Here is what to check before you commit to a relationship:

1. Speed of fulfilment. Can they fill a same-day request? Ask them directly what their process is for a 7am call on a Saturday morning. The answer tells you everything.
2. Vetting standards. Are chefs interviewed? Are references checked? Is right-to-work verification in place? A warm body in a whites is not always an asset.
3. Local knowledge. An agency that genuinely knows your area will have a better pool of available chefs who can actually get to you at short notice. National agencies with no local presence often struggle on this.
4. Range of cover. Can they supply KP level through to Head Chef? You do not want to maintain relationships with five different agencies for different role levels.
5. Communication. Do you speak to the same person each time? Do they remember your kitchen and your standards? Consistency of contact matters more than most operators realise until they experience the alternative.
6. Perm capability. If a relief chef works out well, can the agency convert them to a permanent role? A good agency makes this straightforward, without punitive conversion fees.

How Goldstar Recruitment Works With Hospitality Operators

Q: What does Goldstar offer that is different?

Goldstar Recruitment has been placing chefs and hospitality staff across Oxfordshire, the Cotswolds, Berkshire, and surrounding counties since 2009. We are a specialist agency we only work in hospitality and catering, which means our team understands the industry from the inside, not just on a spreadsheet.

We supply:

• Temporary and relief chefs at all levels, from Kitchen Porter through to Head Chef and Executive Chef
• DBS-checked catering staff for schools, care homes, and public sector venues
• Permanent chef and hospitality recruitment on a no placement, no fee basis
• The Alliance managed service for operators who want a more structured agency partnership

Our clients include some of the most respected venues in the region Blenheim Palace, Oxford University, Farncombe Estate, and Silverstone and we work just as hard for independent gastro pubs and boutique hotels.

Q: How quickly can you respond to an urgent cover request?

We handle same-day requests regularly. When a chef calls in sick at 7am, you need a number you can call that will actually be answered and actually produce someone. That is what we aim to be for every client not the agency that promises 24-hour turnaround on a good day, but the one that is genuinely available when you need cover most.

Key Takeaways: What Hospitality Operators Should Do Now

If you are managing a kitchen or a hospitality operation and you have not yet reviewed your staffing model in light of the 2025 cost changes, here is a practical starting point:

• Calculate your true employment cost per head for your current team, including the new NI rate and NLW. Most operators are surprised by the real number.
• Identify your flexible requirement how many shifts per week are genuinely variable based on demand, sickness, and seasonal peaks?
• Compare the cost of carrying that flexible requirement on your own payroll versus through an agency at current charge rates. The gap is often smaller than you expect, and when you factor in admin, compliance, and risk, agency supply frequently comes out ahead for the variable portion.
• Prepare for the Employment Rights Bill. If you are running a casual bank, get advice on what the new rules will mean for those workers and whether a transition to agency supply makes sense.
• Establish an agency relationship before you need it urgently. The operators who get the best service are the ones who have taken the time to brief the agency on their kitchen and their standards when things are calm not the ones calling at 6:45am for the first time.

Further Reading and External Links

The following sources informed this article and are useful reading for hospitality operators:

UKHospitality Facts and Stats: (sector employment and cost data)

Employment Rights Bill — Parliament.uk: (zero-hours contract reform detail)

National Living Wage rates — GOV.UK: (current and future NLW rates)

Employer NIC changes — HMRC: (NI contribution rates and thresholds)

ACAS guidance on zero-hours contracts: (employer obligations)