Why is hospitality facing staff shortages?
After what has been a hugely difficult eighteen months, things seem to be looking up for the hospitality industry. Lockdown is continuing to ease; pubs are rammed for the Euros and there’s no end to the demand for restaurant and bar bookings. However, the easing of Covid-19 restrictions has created new challenges for the hospitality industry.
Despite unbridled demand offering the sector a much-needed boost, skills and staff shortages in the hospitality industry threaten to dampen the sector’s recovery. Research by Hospitality UK has found that the sector has a vacancy rate of 9% which implies a shortage of 188,000 hospitality staff across the UK. These shortages are mainly concentrated in waiting, bar, and chef roles, though they also are a problem within housekeeping and management roles.
The exact cause of the shortages is unknown, though they are likely a result of the double whammy impact of the Covid-19 pandemic and Brexit. Before the pandemic, 30% of hospitality workers in the UK came from Europe and up to 50% of chefs are thought to have been born outside the UK. However, the pandemic, the Brexit referendum, and the implementation of the new immigration system has led to an exodus of European migrants. It is estimated that 2.3 million non-UK workers have left the UK since late 2019. However, levels of EU to UK migration have been low since the Brexit vote in 2016, meaning a significant pool of talent that businesses in the hospitality sector traditionally drew upon has been in long-term decline for half a decade.
The new points-based immigration system, which was implemented in January this year, has placed significantly more stringent restrictions on migrants entering the UK and closed the borders to so-called low skilled migrants. With many roles in the hospitality industry deemed below the skill level required for entry and the new system placing an increased financial and administrative burden on both businesses and migrants, it is no wonder that research conducted by the jobs website Indeed has found that searches from EU-based jobseekers for roles in the hospitality sector were down by 41% from levels in 2019.
Undoubtedly the pandemic has also had an impact on the ability of hospitality businesses to retain existing staff. According to research conducted by CGA and CPL Learning, confidence in the sector and its ability to offer stable and secure employment has been shaken with 42% of staff surveyed reporting they are concerned about their long-term job security. With the sector closed for a significant proportion of the past eighteen months, many staff have felt obliged to find alternative employment to protect incomes and job security. Some employers have also reported that the pandemic, and the increased time staff had to spend with friends and family, prompted some to look for alternative employment which offers more sociable working hours.
There are concerns that the sectoral instability caused by the pandemic has also reduced the number of young people or career switchers wanting to establish careers in the hospitality industry. Research shows that the pandemic has triggered a shift in perceptions about working in the sector. Although 59% of people still believe the sector offers good career prospects, this figure has fallen by a significant 15% since June 2020. Similarly, there has been a fall in the number of people who would recommend the sector to establish careers in to family and friends.
So how can people be encouraged to stay establish careers in the hospitality sector?
In the short term, with staff in short supply there will be increasing competition between businesses for talent. Undoubtedly many businesses will be reassessing their own remuneration packages and what benefits they offer staff in order to remain competitive. However, businesses have also highlighted that they are working hard to bolster staff wellbeing as we emerge from the pandemic in an effort to both support and retain employees. To tackle staff shortages and ease the shift back to work from furlough, Hall Garth Hotel in Darlington is offering enhanced employment packages, renewed training and supported transitions back into work for staff from the Job Retention Scheme.
Nevertheless, the sector is facing longer-term recruitment challenges and there is clearly work to be done to encourage new entrants to the workforce to establish a pipeline of talent which can sustain hospitality businesses in the future. Undeniably it will be more important than ever for businesses in the hospitality sector to engage with schools, colleges and universities in order to highlight the huge benefits which the sector can offer new entrants, which include a diverse range of roles, accessible entry routes and huge potential for upward progression in a growing economic sector. It will also be important for hospitality businesses struggling to find the experienced staff they may need to lay the groundwork now and offer training programmes or apprenticeships to young people to encourage them into the sector and to equip them with the skills the industry needs in the future.
Government also has an important role to play to help the hospitality sector recover from the pandemic and plug staff shortages. With unemployment high and set to rise as government support unwinds, the onus will be on jobcentres to highlight the opportunities within the hospitality sector to those who are out of work and searching for new opportunities.
However, perhaps what is the most pressing concern for employers in the hospitality sector is the impacts of restricted migration and the new points-based system. It is likely that changes will need to be made to ensure the sector can access the talent it needs. One way of doing so in the short to medium term is by expanding the number of roles on the Shortage Occupation List. In the long term, Government needs to assess the impacts of the system and could look to embed more flexibility within it to ensure that the workforce can respond to rapidly changing business needs.