By Kunal Sawhney, CEO of Kalkine (www.kalkine.co.uk)
Hospitality businesses in the United Kingdom have been reeling under immense pressure of staff shortages for a long time, the recent drawbacks of the ‘pingdemic’ exercise and lack of skilled work- force that can handle multi-tasking roles, especially in the consumer facing businesses.
The food & beverage settings across the UK are contemplating the possible avenues through which the dearth of human capital can be addressed in a proper manner, as these enterprises are still unable to operate at full scales due to market-wide inadequacy of raw materials, the persistent challenge of high input prices and unending trouble of limited staff.
Almost every other business is facing difficulties with regard to the availability of adequate human capital that can undertake various roles to accommodate the surge in consumer footfalls and the subsequent increase in spending.
The havoc done by the elongated course of Covid-19 pandemic has categorically disrupted the functions as the enterprises operating within the hospitality industry were the last in queue to be allowed to resume their operations after the government of the UK announced massive easements according to the phased exit plan from the lockdown restrictions and stern social distancing guidelines.
The widespread repercussions of pandemic have furthered the pain for hospitality settings as the industry was already encountering the troubles of staff crisis before the Covid era.With the vacancies hovering near record high, the businesses are unable to find the right talent for various positions as a slew of workers have left the country when these businesses were operating with curtailed staff or remained entirely shut, adhering to the respective pandemic mandates issued by the government.
In the January-March period of 2020, there were over 80,000 vacancies in the sector.The number of vacancies dropped sharply after thousands of businesses were forced to limit their operations during the initial period of nation-wide lockdown, while many of them were obligated to shut the complete functions.
The general shortage of labour at food & beverage facilities and hotel & accommodation businesses has worsened the situation, so much so that a large section of such employers are announcing lucrative pay packages to hire an adequate number of staff before the Christmas period.
The Christmas-linked bonuses have escalated up to £2,000 as corporations are seriously looking to fill the vacant positions much before the extended stretch of festivities start.The desperateness of businesses is quite evident as they are not okay losing a considerable chunk of revenue in the peak period with the country preparing to celebrate any major festival with the least possible restrictions for the first time in the pandemic era after 2019.
The acute problem of limited staff have drastically malfunctioned the supply chain and logistics system, another pain point for the retailers, the food & beverage businesses, the enterprises functioning in leisure space and the age-old hotel and accommodation section of hospitality.
Proportionately high number of workers that were deployed in the hospitality sector have shifted to different sectors due to the extended period of no business and no pay, while a relatively high number of foreign nationals have returned back to their permanent residences, effectively exacerbating the staff crisis.These are some of the primary reasons why the so-called staff crisis will take years to resurrect.
All the consumer-facing businesses are facing a heavy burden due to the industry-wide problem of retaining the required number of workers and, at the same time, employing skilled labour to various tasks within the operations. On the contrary, a considerable number of workers who left the country during the national lockdowns and stretched period of restrictions are willing to return.
The wide array of operations in the services industry are managed by employees of various expertise and age groups. Many businesses employ college students to manage their front-desk operations as they remain full of energy to service the consumers, partly experienced people are designated in the operations management including the inventory, catalogue, etc, primarily the mid-senior roles.
While seasoned professionals are aligned with the managerial staff who looks after the commercial operations and explore various opportunities through which the business can be scaled up.
Due to the comprehensive disruptions in the operations and persisting problem of staff, many hospitality venues across the UK are likely to operate in a curtailed manner during the peak season of Christmas this year as they are unable to revive the lost staff strength.As a result of this, alongside the higher input prices of raw materials and increased costs on supply chains due to limitedness of HGV drivers, the consumers are highly likely to encounter the price rises.
The relative increase in the indicative prices by the hotel & accommodation businesses and the leading firms operating in the food & beverage space will be done to effectively offset the losses incurred due to reduced scale of operations and higher operational costs.The government of the UK has already taken certain measures to revamp the fuel crisis due to unavailability of HGV drivers that remain responsible for transporting the fuel from the source to the refuelling stations across the country.
Restoring the total staff count across various hospitality businesses will certainly require additional time as people are still worried due to the evolving nature of the coronavirus, mutating strains, variants of concerns and their sub-lineages.The continuing difficulties in the operative environment are taking a toll on the pace of economic recovery as Britain remains a service-intensive economy.
According to Kate Nicholls, CEO of domestic trade association UK Hospitality, the high vacancy rate across the hospitality industry translates into a shortage of nearly 200,000 workers at various outlets including leading restaurants, in-hotel eateries, bars, pubs, nightclubs and other food chains with multi-city operations.
The hospitality industry has continuously pressed on the urgency of allowing them to reopen, while the Downing Street administration tabled the exit roadmap.The never-ending troubles for the sector emerged after the businesses resumed their operations but were not able to full commercial scale as all such settings are short-staffed.This becomes a serious problem for the industry as many businesses have availed multiple credit lines to keep their operations going during the period of reduced work and the period of no revenues for some.
The conclusive impact of broken balance sheets can severely hurt many businesses if they remain unable to operate at a larger scale, the only thing that can bounce them back to the pre-Covid levels of earnings.The aftermath of Brexit and the newly introduced arrangement between the UK and the bloc, the domestic businesses are finding it hard to bring the right talent from the Euro Area as easily as they were getting it before 2021.