UK wage increases: 6 ways workforce management software can help your business keep labour costs in check

On 1 April 2025, the UK’s National Living Wage increases came into effect. The increases mark the largest single-year raise on record and are designed to reflect the current cost of living. The increases are as follows: 

• National Living Wage (21 and over):

• £12.21, an increase of £0.77 

• 18-20 Year Old Rate:

• £10.00, an increase of £1.40 

• 16-17 Year Old Rate:

• £7.55, an increase of £1.15 

• Apprentice Rate:  

• £7.55, an increase of £1.15 

• Accommodation Offset:

• £10.66, an increase of £0.67 

These figures may not sound like much on paper, but come as a welcomed boost for the average worker battling inflation and cost-of-living pressures. 

For businesses, however, this adds more pressure to already tight margins and stretched budgets — particularly in frontline sectors with large shift-based workforces, such as Hospitality, Adult Social Care and other care industries, Retail, and Events. Workers currently being paid higher than the National Living Wage, or those seeking a pay increase, are set to feel the ripple effect of tightening labour budgets. 

Not all is lost, though. Despite the increase, there are many ways to keep labour costs in check — and one of those is workforce management (WFM) software. It can help your business facilitate a more strategic approach to HR management, allowing you to quash inefficiencies and reduce spending without resorting to layoffs.

Compliance, before all else 

Above all, compliance is king. It’s critical that businesses are aware of, and act in accordance with, the upcoming wage increases to avoid unintentional underpayment or non-compliance with HMRC enforcement. Employers must ensure all eligible staff are being paid in line with the new sectoral wage thresholds. 

According to UK NHW law, deliberate underpayment is a criminal offense and can lead to fines, reputational damage and even criminal charges in serious cases. Accidental underpayment can still attract penalties but has not been criminalised at present. If a business has accidentally underpaid its employees — for example, due to ineffective payroll systems, training, or a lack of automation — employers can rectify this by auditing past records, calculating the amount owed, and making the correct back payments. 

Rather than risking underpayment and payroll mishaps, managers must realise that prevention is the cure. Robust WFM software that services areas such as record keeping and payroll is the modern avenue towards greater compliance.

6 tips to keep labour costs down with WFM software 

Tip #1: Understand the numbers 

Before making any business decisions, it’s not only important to know of the data but to also understand what it means. Numbers are the language of business, and are even more critical considering that in this case, livelihoods are on the line.  

Thankfully, WFM software is a treasure trove of data. Having software that can calculate, visualise, and crunch numbers for you can significantly help you in spotting trends, risks, and opportunities for improvement. 

Having access to the data is one part; it’s what you do with that data that truly matters.  Humanforce’s Workforce Analytics solution helps HR and business leaders make more informed decisions supported by real-time, data-driven evidence. 

The inbuilt reporting feature covers project costs, tardiness reporting, hours worked to hours rostered ratios, causes of unauthorised timesheets, and more. This can improve visibility of what’s happening across your business and show where planned and unplanned costs are occurring. Alternatively, a custom dashboard builder can be used to visualise specific, business-critical information, enabling managers to spot minor anomalies before they turn into costly issues.  

Tip #2: Optimise resources

Effective rostering helps you to schedule and manage your resources — whether that be labour/staff numbers, rooms, equipment or support for workers. You’ll need to look no further than Humanforce’s Rostering & Scheduling solution. It optimises how your workforce is being utilised and can help you work within budgets and pay bands or contracted wage rates across one or many locations. 

Our simple, drag-and-drop rota builder means you can see what’s going on at a glance. It will also alert you of any potential scheduling clashes or errors. You can even micro-schedule short-duration tasks and breaks, build costing, mandatory qualifications, employment agreement conditions, reminders and more into them.   

With the help of AI, you can create schedules that can automatically create optimised labour plans as well as cater for your team schedule preferences. The shift offer and shift bidding features within Humanforce help managers fill vacant shifts effectively, without having to resort to staff from third-party labour hire agencies. Even better, employees are empowered to choose the shifts that suit their personal circumstances.

Tip #3 below outlines how demand-driven rotas can benefit an organisation. The same applies to rotating rotas. Both experience and capacity can vary dramatically, which means rotating rotas are a bona fide way to ensure consistent performance. Rotating rotas allow managers to create set shift times — such as breakfast, lunch and dinner; or morning, late and night — and then give workers different shifts each week. For example, a staff member might work the morning shift one week, the late shift the next week and then the night shift the following week.  

Not only does this provide greater flexibility for employers, but it also exposes workers to different tasks and is a cost-effective way to build new skills. For example, the opening and closing procedures for a café are markedly different. Employees opening the café need to prep food, grind beans, lay tables and set up daily operations. In comparison, closing shift staff must clean, count cash and lock up. We took a deep dive into the subject of rotating rotas in a previous article, if you wish to find out more about them.

Tip #3: Create demand-driven rotas 

The recent wage increase is a reminder for businesses to cut down on unnecessary labour costs. However, things can get hectic during peak periods. At times like these, it’s easy for managers to call in more staff than they actually need — especially without access to modern rostering, analytics, and payroll software. 

All leaders should have a reasonable idea of when work peaks and troughs occur; those busy times of the day/week/month/year when more staff are required to meet demand — and the same for the less-busy times. For those in Retail and Hospitality — and any business with demand-driven variables — it’s crucial to understand your demand curve of sales/services and create rotas accordingly. 

If you have more sales on a Monday, but it decreases over the week you can schedule more staff for Mondays and reduce staff numbers for the rest of the week. The same applies to bank holidays, seasonal times like Christmas, and industry-specific nuances that will spark a surge in demand, such as sporting events. 

Well-integrated software solutions are critical here. The more data you have in your system, the more effectively you will be able to predict your demand curve and create rotas that match demand. The entire Humanforce suite provides robust integration capabilities, bringing together payroll, workforce management, talent acquisition and other business intelligence systems based on event data, as well as occupancy, foot traffic or POS data, to help create an interconnected ecosystem. This ecosystem allows businesses to sync different sources of data to help create more efficient rotas. 

Alternatively, Humanforce enables easy integrations with existing technology suites, including more than 100 pre-configured payroll integrations, enabling all employment agreement data to flow directly to payroll — resulting in less manual handling and fewer payroll errors 

Tip #4: Avoid excessive overtime while maintaining compliance 

It may seem obvious, but one of the best ways to improve your labour cost efficiency is to avoid overtime as much as possible. The occasional burst of overtime may not seem like much, and is often unavoidable, but even small amounts on a regular basis can quickly add up — especially considering the recent minimum wage increase. 

The UK has no statutory requirement for overtime to be paid for all workers, beyond ensuring the National Living Wage is paid. Overtime, and the rate at which it’s paid, generally depends on the employment contract in place between the business and its workers. The contracted wage rates, sectoral wage thresholds or Collective Bargaining Agreements (CBAs) that exist may also dictate the amount payable.  

For example, an employment contract might provide that the employee will be paid at time-and-a-half for overtime up to a certain number of hours on a given day, and then double-time for any additional overtime on that day. 

Overtime can be worthwhile if the business is generating extra revenue from it. But oftentimes, this isn’t the case. If your staff are struggling with workload, consider another part-time staff member to handle the workload and service your customers more effectively, or improve processes (see tip #5). Alternatively, undertake a cost/benefit analysis to assess whether in fact it makes good business sense to operate on a public holiday or have staff working overtime on a regular basis. 

Smart workforce management solutions can navigate this tricky terrain to ensure your labour costs stay within budget, and just as critically, you remain compliant with pay, loadings and conditions. For example, Humanforce’s pay rules engine can break down what needs to be paid for a shift that starts on a non-bank holiday (e.g. 10pm), then crosses midnight into a bank holiday. It will show how much that worker will be paid (at time-and-a-half) for the hours worked past midnight – all on one timesheet and without having to split it manually. All of this is shown during rota creation, adding greater clarity and helping to stay within budget. Even better, it integrates with your payroll solution – helping to ensure accurate pay for shift-based workers.

Tip #5: Standardise key processes 

Create consistency and transparency by standardising key processes like tracking hours, calculating pay, distributing leave, swapping shifts, and so on. By defining these processes from the word go, you’ll set an even playing field that creates a mutually beneficial culture of fairness and understanding. And when change does occur, workers understand they have a standard to follow, despite the fact some things may be different going forward. 

For example, if an employee wants to request leave and the process is unclear, they may leave it until the last minute, which stresses them out and leaves their employer in the lurch. Often the only alternative to fill rota gaps quickly is to offer overtime to other team members or take on third-party agency staff who may not be familiar with your processes and can be costly. With an established leave request process in place, such a scenario could be avoided. 

Undertake a review or audit of team processes. You want to pick up on anything that is chewing up your team’s time or creating headaches in the long term. Compile the below points into a checklist to keep them front of mind: 

• Stores, sites or business units exceeding their labour budgets 

• Any manual data entry 

• Paper-based processes and how they are managed 

• How many employees are spending time managing these processes, and the impact this has on business growth  

• Excel spreadsheets being used to track anything throughout the process 

• Multiple people handling the same forms 

• Managers manually filling short notice shifts or unexpected rota gaps using calls and SMS to try and contact staff last minute 

• Channels like WhatsApp or Facebook being used to change shifts 

• Employee dissatisfaction about processes 

• High error rates in payroll or staff being paid incorrectly 

When conducting your research, be sure to get the entire picture. Speak to staff at all levels of the process, from managers to frontline staff and everyone in between. Investigate how processes work within different teams and departments and find out where the weak link is. 

Humanforce provides two key solutions that enable managers to gain a holistic understanding of workforce performance: Workforce Analytics and Employee Engagement. With Workforce Analytics, managers can access and harness rich, real-time business data through customisable dashboards and reporting functionality. On the more personal side, Employee Engagement allows managers to forge stronger bonds with their employees through 1:1 check-ins, surveys, keyword sentiment analysis and more to track their engagement and wellbeing over the entire lifecycle.  

Tip #6: Obtain accurate clocking data 

Meaningful insights are only possible with quality data. Incomplete, inconsistent, duplicated or incorrect data can result in poor decision-making. The right systems can help. Tracking employee clocking times is a prime example. If pen-and-paper timesheets are still being used, it’s possible that time theft is occurring. Whether it’s malicious or unintentional, chances are you’re regularly overpaying your employees. 

Alternatively, the data being manually entered is being misinterpreted. It’s easy for mistakes to slip through: a staff member enters the wrong name, HR reads the wrong column, or someone’s ‘7’ looks like a ‘1’. 

Electronic systems create near-infallible records. They also save time for managers. As an example, you might have a team of 25 people, each working 3 shifts a week. In this case, your manager has 75 timesheets to approve each week. Say each timesheet takes 2 minutes to check on average, and that the manager spends 20 minutes following up on missing timesheets, errors, sick days, or other discrepancies. 

Using Humanforce’s Time & Attendance solution, clocking and authorisation by exception features eliminate the need to manually review correct timesheets. All that’s left from the above example is the 20 minutes needed to resolve unexpected issues – a saving of 2.5 hours of admin time each week. 

From on-site kiosks to mobile clocking, Humanforce offers solutions to suit the operational and security needs of every business, in addition to innovative vein scanning, facial recognition, QR codes and geo-fencing features. You can relax, knowing that you’ll always have the correct time and attendance data once payroll processing begins. 

More than just remuneration 

This National Living Wage increase does not need to be the proverbial straw that breaks the camel’s back. While it’s important to remunerate your staff fairly, and paying extra can attract and retain top talent, money is not always the main motivator. 

Ensuring your company offers interesting and challenging work, a mission to believe in, and a great working culture that offers growth, a good work-life balance, and recognition for a job done well, will stand you in good stead – without blowing the budget. 

For more tips on how to enhance your employee value proposition (EVP), download our eBook. 

About Humanforce 

Humanforce is the all-in-one platform for frontline and flexible workforces, offering a truly employee-centred, intelligent and compliant human capital management (HCM) suite – without compromise. Founded in 2002, Humanforce has a 2300+ customer base and over half a million users worldwide. Today, we have offices across the UK, Australia, New Zealand, and the US. 

Our vision is to make work easier and life better by focusing on the needs and fulfilment of frontline workers, and the efficiency and optimisation of businesses. 

To learn more about how Humanforce’s solution can help automate people processes in your business, please contact us.