Entry-level job costs jump over 10% for retailers
A recent analysis by the BRC suggested that a further 160,000 part-time retail roles, more than 1 in 10, were at risk of being lost in the next three years
The cost of employing people into entry-level jobs has increased over 10% for retailers as a result of the rise in National Insurance Contributions (NICs) coupled with the increase to the National Living Wage, according to the British Retail Consortium.
Alongside this, the trade body has claimed that the cost of employing people part-time has increased by 13%.
Higher National Living Wage and changes to employer NICs will together cost the retail industry over £5bn a year, rising to £7bn when the new packaging tax (Extended Producer Responsibility) comes into force in October 2025.
The changes to the NIC threshold, which fell from £9,100 to £5,000, means many more part-time and entry level jobs will now be captured by the tax, reducing the incentive for many businesses to offer them.
According to the most recent ONS data, there were 1.5 million part-time jobs in retail in 2024, the lowest on record, and down 200,000 since 2018.
A recent analysis by the BRC suggested that a further 160,000 part-time retail roles, more than one in 10, were at risk of being lost in the next three years.
Helen Dickinson, BRC CEO, said: “The chancellor’s October Budget is now hitting retailers with an extra £5bn on their employment bill. When coupled with the new packaging tax in October, retailers’ costs will have spiralled by £7bn in a single year.
“Given slim retail margins of just 2-4%, these additional costs mean higher prices, fewer jobs and fewer stores. A recent survey of retail finance directors showed that half were planning to reduce hours and workers as a direct result of the employer NIC hike.”
She added: “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.
“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.”
