Pre-Budget Warning: Using Tech to Offset Rising Employment Costs

Employment costs in the UK are rising. National Insurance contributions, pension auto-enrolment, National Living Wage increases, and various compliance burdens all push up the cost of each employee.

For SMEs operating on tight margins, this is a serious strategic issue.

The question isn't whether labour costs will rise.

It's what you're going to do about it.

Three big levers most organisations underuse

Technology won't make employment costs disappear. But used thoughtfully, it can help you get more value from the team you have – and avoid hiring for tasks that don't need a human.

Here are three levers most organisations underuse.

Start with automation

Automation means using software to perform tasks that would otherwise require manual effort. This ranges from simple (auto-sending invoice reminders) to complex (AI-powered document processing).

Good candidates for automation:

• Data entry and transfer between systems
• Routine customer communications
• Report generation
• Invoice processing
• Compliance checks

The goal isn't to replace people. It's to free them from low-value work so they can focus on tasks that actually require human judgement.

That's the trade-off.

Workflow redesign

Sometimes the problem isn't individual tasks but how work flows through your organisation. Manual handoffs, unclear responsibilities, and duplicated effort all waste time.

Mapping and redesigning key workflows can deliver significant efficiency gains – often more than adding automation to a broken process.

Ask: Where do things get stuck? Where do errors occur? Where do people spend time chasing or waiting?

Self-service

Many internal requests – holiday approvals, expense claims, IT support, HR queries – can be handled through self-service portals and knowledge bases rather than direct human interaction.

Customers, too, increasingly prefer self-service for simple issues. A well-designed help centre or chatbot can resolve queries faster and cheaper than a support team.

Make it real before the next Budget

The best time to invest in these capabilities is before you're under pressure. When employment costs jump, you want systems already in place – not a scramble to catch up.

Practical steps:

• Audit your current processes. Where is time being wasted?
• Identify high-volume, low-complexity tasks. These are automation candidates.
• Invest in tools that integrate well. Avoid building new silos.
• Train your team. Technology only works if people use it.

The bottom line

Rising employment costs are not going away. The businesses that thrive will be those that use technology to work smarter – not just those that cut heads or accept thinner margins.

If you'd like help identifying automation opportunities in your business, get in touch.