Rise of Cash-in-Hand Payments in Hospitality Amid Budget Strains in 2025
Cash-in-hand payments are increasing in the hotel and catering sector, according to new research. Excel Recruitment’s 2025 Salary Guide reveals that many businesses are turning to cash payments to manage tight budgets.
Excel warns that this trend could boost black market activities, creating challenges for businesses that do not use cash payments as they compete for staff. The hospitality sector faces financial pressure with the minimum wage set to rise to €13.50 per hour in January 2025. This comes alongside increased sick pay, PRSI contributions, and pension costs.
The salary guide forecasts wage changes for entry-level and supervisory positions, while management salaries are expected to remain stable. It also notes that businesses are increasingly using staffing agencies and automation to meet rising costs while maintaining customer satisfaction.
Interview with Shane McLave, Managing Director at Excel Recruitment
Editor: Thank you for joining us today, Shane. Your recent Salary Guide indicates a troubling trend in the hospitality sector regarding cash payments. Can you elaborate on why businesses are increasingly resorting to cash-in-hand methods?
Shane McLave: Thank you for having me. Yes, our research reveals that many businesses in the hotel and catering sector are turning to cash payments primarily to cope with tight budgets. The rising cost pressures, particularly with minimum wage set to increase to €13.50 an hour in January 2025, have prompted some establishments to find more flexible payment methods. Unfortunately, this shift can lead to several complications, especially concerning compliance and the integrity of the workforce.
Editor: You mentioned potential increases in black market activities. How do you think this trend impacts businesses that are committed to legal cashless transactions?
Shane McLave: This situation creates a competitive disadvantage for businesses that adhere to legal payment methods. As some employers utilize cash payments to attract workers looking for immediate income, those committed to compliance may struggle to retain staff. This could lead to talent shortages for businesses that prioritize legal practices. It’s a complicated issue, as the reliance on cash payments can undermine the value of regulated employment.
Editor: Alongside these challenges, your guide points to increased costs for employers, such as sick pay and pension contributions. How are businesses reacting to these financial strains?
Shane McLave: Exactly, the combination of rising minimum wages, sick pay obligations, and other contributions is creating immense financial pressure. As a response, many businesses are turning to staffing agencies to fill gaps quickly and efficiently. Automation is also becoming more prevalent, allowing companies to control labor costs while still striving to maintain a high level of customer service. These measures are critical, but they also come with their own set of challenges in terms of workforce morale and service quality.
Editor: With 600 to 700 venues closing in the past year, how do you perceive the future of the hospitality sector?
Shane McLave: The industry is indeed at a critical juncture. The closures are symbolic of broader struggles, and if businesses cannot adapt to the changing landscape, we might see further declines. Companies must be strategic, facing the choice between cutting costs or investing in better processes to remain competitive. The future could be uncertain, but with innovative solutions and a commitment to retaining staff, there’s hope for recovery.
Editor: Lastly, what advice would you offer to businesses navigating this challenging environment?
Shane McLave: My main advice would be to prioritize transparent practices while evaluating new staffing methods. Employers must weigh the costs and potential outcomes of cash payments against long-term sustainability. Investing in automation and partnering with reputable staffing agencies can offer immediate relief, but longevity in the industry will demand anything less than honest and equitable treatment of employees. The path may be tough, but it’s the resilient businesses focusing on their workforce that will likely emerge stronger.
Editor: Thank you for sharing your insights, Shane. It’s clear that the hospitality sector faces significant challenges ahead, but your expertise sheds light on potential pathways forward.
Shane McLave: Thank you for having me. It’s essential to keep the conversation going about these critical issues in our industry.
Shane McLave, Managing Director at Excel Recruitment, states that the hospitality industry is facing a critical moment. He highlights that 600 to 700 venues closed in the last year, raising concerns about the sector’s future. Businesses must make tough choices to survive, impacting both employees and customers.