By Kunal Sawhney, CEO of Kalkine (www.kalkine.co.uk)
A considerable number of hospitality settings across the United Kingdom are forced to operate in a curtailed manner due to industry-wide challenges of staff crisis and their inability to rehire and deploy adequate number of resources through which multiple operations can be managed as food & beverage enterprises gear up for the festive season with an anticipation of higher consumer footfalls and the subsequent spending before the Christmas and the following year-ender holidays.
The employment landscape in the country has experienced a very tough time as repeated disruptions on the back of Covid- 19 pandemic have time and again, forced the settings to cut short the commercial operations. The pandemic-related hardships are still hampering the business functions as most of the food and beverage enterprises, as well as accommodation setups have been allowed to operate at the maximum possible scale, but the dearth of human capital has taken a huge toll, especially on the consumer-facing businesses.
On the contrary, businesses have been invariably increasing the job vacancies as they find it difficult to fill up the vacant positions with the skilled staff, at a time when consumers are more willing to step out of their homes and social bubbles to spend.
As a result of continuous addition in the total number of vacant positions, the total number of job vacancies in the August-October quarter of 2021 rose to 1.17 million, a fresh record high after an addition of 388,000 positions as compared to the total vacant positions during the last pre-Covid quarter, the January-March stretch of 2020.
According to the latest estimates by the Office for National Statistics (ONS), 15 out of 18 industry sectors have reported a record high number of vacancies, at the end of August-October quarter. However, the growth rate of vacancies during the corresponding period have partly slowed with the largest increases seen in wholesale and retail trade, repair of motor vehicles and motorcycles.
Surprisingly, the accommodation and food service businesses have reported the largest increase in vacancies during the August-October period with the total number of vacant positions rising by 66,500, nearly 79% from the figure recognised at the end of January-March quarter of 2020.
The largest increases in the number of vacancies since the Covid-19 pandemic struck the work, clearly indicates the tightening in the services sector, especially the hospitality industry as most of the businesses have been obligated to close their stores and outlets due to stern restrictions and pandemic-related guidance issued by the government of the UK, while some of them have been allowed to partly operate with reduced staff size.
Such conditions have forced the international workers to leave to their respective home nations due to sharp drops in their earnings. Nonetheless, the business sentiments have been improving gradually with the wide range of easements offered by the Downing Street administration to accelerate the pace of recovery following which the total number of payrolled employees have seen a steady growth between September and October of 2021. In terms of payrolled employees, only London has less number of employees as compared to the initial time of Covid-19 pandemic.
Rising rate of employment in the UK certainly relieves the pressure but hospitality businesses are still grappling with the staff crisis as they are not able to deploy adequate number of resources, following which number of bars, restaurants, pubs, nightclubs and other casual settings are preparing for partial closures unless they equip themselves with the right number of people.
The reason being, these commercial settings are not able to realise the expected amount of revenues even after operating at the maximum possible scale and spending the maximum possible budget.
As per the ONS findings, the current rate of vacant positions stood at 3.9 vacancies per 100 employees, this has been the highest rate on record as all the industries have reported sharp increases in the quarter. Of the total sectors, the accommodation and food service businesses recorded the highest rate of 6.7 vacancies per 100 employees.
With the number of vacancies hovering at the record high levels, it is quite definite that the accommodation and food service businesses will take ample time to resurrect the adequate staff size as a substantial number of people employed by the industry have shifted their careers due to elongated stretch of difficulties and the period of ‘no business & no pay’.
The remaining number of employees have been backed by the furlough scheme during the period when corporations suffered a huge drop in the quantum of sales due to sharp decreases in the footfalls.With the resumption of international travel, the footfalls have seen a steep spike with the domestic tourism sector seen flourishing with the visitors.
On the other hand, the path of Covid-19 continues to remain uncertain with a number of European nations reintroducing certain social distancing measures and pandemic-induced restrictions to curb the recent resurgence of infections in the continent as the virus continues to mutate.
The double-jabbed people contracting the virus and developing serious symptoms has been a reason of worry as healthcare authorities are not in position to ascertain that people inoculated with highest possible protection can be potential carriers of the virus, also they can contract Covid-19 (SARS-CoV-2) virus as the efficacy rate of vaccines remain near 70-80%.
It has been widely discussed that the problem of staff inadequacy will stretch at least beyond the first half of the next year as people remain skeptical about the position of the virus and the prospective challenges it presents. Given the recent tightening by some of the European, as well as Asian countries to combat the increase in rate of infection and hospital admissions, people are highly preferring jobs that can be easily managed through remote locations.
The bright side of selecting a remote position is that you don’t need to relocate to the city immediately, while some of the hybrid and off-site jobs are offering better compensation as compared to the traditional in- office jobs, in-store roles.
On a large scale, the labour market has showcased continuous recovery with the July-September quarter of this year witnessing a 0.5% drop in the unemployment rate to 4.3% from the previous three-month period. In the meantime, the employment rate has jumped to 75.4%, following a 0.4% increase as against the rate recorded at the end of April-June quarter of 2021.The contrast in the employment landscape is quite evident as the rate of unemployment is only 0.3% below the pre-Covid levels but the accommodation and food services businesses are sitting with record high vacancies.