Strong demand for travel ‘should shield agencies from employment downturn’

By Ian Taylor and Juliet Dennis

Strong demand for travel and for in-person advice should shield agencies from a downturn in employment across UK retail, say senior industry figures.

More than half of UK retailers expect to cut working hours and recruitment in the wake of the Employment Rights Act becoming law in January, according to a survey by the British Retail Consortium (BRC) last week.

The survey of finance officers at retailers with a combined turnover of £60 billion found sentiment had “deteriorated markedly”. More than two-thirds (69%) were ‘pessimistic’ about the next 12 months, up from 56% last July, and 84% ranked labour costs “a major concern” – four times the rate (21%) last July. Three out of five finance officers (61%) said they plan to reduce the hours of staff and 45% to freeze recruitment.

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The BRC reported the cost of employing a full-time entry-level retail worker rose 10% last year due to increases in employers’ National Insurance Contributions and the National Living Wage.

It warned measures in the Employment Rights Act could reduce the number of entry-level and part‑time jobs, with chief executive Helen Dickinson warning: “How the Act is delivered will make or break job opportunities.”

Claire Steiner, UK director of the Global Travel and Tourism Partnership, which promotes talent and skills in the sector, forecast “more‑cautious recruitment” but said: “I don’t expect huge job cuts despite the cost pressures. We still face a skills shortage as a sector and cutting too many entry-level roles would risk damaging the future talent pipeline.”

She added: “The continued growth of high street agencies when it’s becoming more expensive to employ people signals confidence in demand for in-person advice.”

Hays Travel chief operating officer Jonathon Woodall-Johnston insisted: “We’re prepared for the rise in employment and other costs. We’ll continue to recruit in step with the needs of our business.”

He said Hays saw “lower employee turnover and vacancy numbers” and added: “We expect to have close to 700 apprentices in the business when the new intake joins in the summer.”

Advantage Travel Partnership chief executive Julia Lo Bue-Said acknowledged “it’s much more expensive to employ young people now” but said: “We’re fighting for talent against every other industry.”