Commenting on the latest ONS employment statistics for food and accommodation services, Paul Newman, partner and head of leisure and hospitality at RSM UK, said: ‘Monthly food and accommodation services vacancies remained flat at 146,000 in January 2023, after reaching an all-time high in May/June last year. However, vacancies are nearly 65% higher than the 89,000 in January 2020, reinforcing the challenging recruitment landscape hospitality businesses are facing. This continues to negatively impact the ability of businesses to maximise sales with reduced opening days, restrictive trading hours and simplified menus all resulting from staff shortages.
‘Earnings in the sector dropped again by 10% in Q4 2022 from the previous quarter and increased 3% year-on-year. With headline CPI inflation in January at 10.3%, adjusting for rising prices means wages are continuing to fall in real terms. This has led to demands for higher pay rises but for some businesses, particularly small, independent operators, raising wages beyond National Minimum Wage rates when energy costs and food inflation are at record highs will only lead to more pubs and restaurants going out of business.
‘The number of people employed in the sector increased slightly to 1.69 million in Q4 2022 but with insolvencies reaching a decade high last year, these numbers are expected to contract as more companies close their doors in the face of ever spiraling costs.
‘Wages in the sector have been steadily rising for a long time, reflecting the efforts of businesses to both attract staff and keep up with inflation. There is no quick fix to solve this recruitment crisis but we do need to see greater investment if the sector is going to access the people it needs to fill essential roles. Only then will businesses be able to trade to their full potential and begin to deliver the economic growth to create even more job opportunities.’
Steve Sweetlove, pay and people partner at RSM UK, said: ‘Despite year-on-year wage rises in the sector being well above the UK average, labour shortages continue to a major challenge for food and accommodation industries
‘As we emerge from the winter, operators should start to really focus on their wider people strategies. Where possible, rather than get bogged down by day-to-day issues, operators need to keep their eyes on the horizon and future-proof their workforce. Key questions that employers need to ask themselves are why would employees want a career in hospitality, why would they want to join us and why would they want to stay with us? For many, looking at the non-remuneration aspects such as progression will be as essential as the hourly rate of pay.’
