By Kunal Sawhney, CEO of Kalkine (www.kalkine.co.uk)
The hospitality industry is yet to see a significant post-pandemic recovery. The last two years for the sector have been turbulent, credit to the COVID-19 restrictions and Brexit. There are a bunch of challenges before the industry, such as the cost-of-living crisis forcing people to cut down on discretionary spending, restaurants and pubs staying closed due to extreme weather, and more. While these are short-term challenges, there’s one that is putting a lot of pressure on the sector’s recovery – staff shortage.
Staff shortage is among the biggest obstacles the industry is facing right now, as restaurants, pubs, and hotels are struggling to find and retain staff. While there are expectations that the sector revenue will rise this year and provide relief to thousands of business owners facing the headwinds from record inflation and a faltering economy, there’s no immediate relief in sight for staff shortage. Notably, having enough staff is critical to capitalising on the growth opportunities.
More Vacancies, Fewer People Looking For Job
The hospitality sector is seeing a rise in vacancies as the number of people in employment is coming down. Compared with the pre-pandemic period, there are fewer people in the workforce at present. Reasons behind this are many, ranging from illness and early retirement to people looking for opportunities in other, more stable sectors.
A recent survey by several trade bodies revealed that front-of-house staff is the most sought after, followed by chefs and kitchen porters. The survey also added that the industry is looking at losses worth £21 billion due to the shortage.
Dampening effects of Brexit
One primary reason for the shortage is Brexit. Following the UK’s separation from the European Union (EU), immigration rules have changed, which means it won’t be as easy as before for people to move to and work in the UK.
When the COVID-19 pandemic struck, people from the EU went back to their home countries. Soon after Brexit happened, it made their return tough. Because there’s no free movement now, it has become difficult for employers to find migrant workers. Similarly, migrant workers now find it less attractive to come to the UK.
How are businesses coping?
To deal with these challenges, businesses are opting for several ways, and one of them is offering pay rises. To attract more staff, employers are hiking the salaries of new recruits. This practice is being seen across all sectors in the UK. In the hospitality industry, waiting and kitchen staff is among the biggest beneficiaries of this.
Other measures to lure more staff include perks like bonuses, flexible working, welfare initiatives, etc.
Businesses are also adapting to customers’ changing preferences to keep up their revenues. While this may not be directly related to staff shortage, trends like introducing better home delivery options and premiumisation add to the revenue.
The road ahead
While challenges like extreme weather will be resolved by themselves in some time, workforce shortage is a major one that needs a resolution soon for the industry to be able to recover. Higher wages or flexible working can only help to a limit, as most businesses aren’t doing significantly well now due to inflation, pandemic, cost-of-living crisis, and more.
Additionally, businesses can try to train the existing staff to have a small but multi-skilled team. If there are things that can be outsourced, like in-house marketing, sales, etc., they can be combined and outsourced to keep the costs down.
The hospitality sector requires targeted support from the government. There are calls for a permanent reduction in VAT for the hospitality industry and an overhaul of business rates. The government should consider the possibilities as well.