Staff shortages in the hospitality industry are having a detrimental impact on businesses’ ability to operate and recover from the devastating effects of the pandemic. So what are the reasons for this shortage, and how are the government and industry attempting to tackle it?
““With the increase in demand we need to be at more than 100 percent and we are challenged to find that resource,” said Mr Kill.
UKHospitality estimated that staff shortages in the hospitality industry are around 188,000 or a vacancy rate of 9%.
The capacity constraints caused by COVID regulations have meant that just shy of 25,000 hospitality venues are still shut (AlixPartners’ Market Recovery Monitor Research). On top of this, staff shortages have meant that many venues have had to operate at reduced opening times.
Businesses are desperately trying to recruit, with job adverts in the industry running at 132% of the base level of February 2020, but a reduced pool to hire from as well as other issues caused by external factors has resulted in very few applicants for these roles.
What are the reasons behind these staff shortages?
COVID and the Furlough Scheme
Obviously COVID has had the biggest impact on staffing levels in the hospitality industry. When the country went into national lockdown and the hospitality industry’s vulnerabilities were laid bare, many lost confidence with the industry and moved into a different career.
Some workers in the industry did this out of necessity when they were made redundant before the furlough scheme was available. Alex Reilley, chairman of cafe bar operator Loungers, reiterated the lasting impact COVID is likely to have on recruitment in the hospitality industry as prospective applicants become deterred by how susceptible to closures these businesses are.
Ensuring that the hospitality industry becomes a more secure sector to work and have a career in would alleviate some of the issues causing staff shortages, but this is largely outside of the industry’s control.
While the furlough scheme undoubtedly protected many jobs, many companies calling their workers back to their furloughed positions have found that some have now chosen to work in other industries permanently, and won’t return to hospitality, a phenomenon that Michael Kill of the NTIA refers to as “furlough hangover”.
The clearest example of this is from the British Institute of Innkeeping’s Member Survey. The survey found that 35% of member venues had at least one member of staff quit with no notice period as soon as the venue reopened and furlough payments stopped because they had either secured employment in a different industry or simply didn’t want to return to work. This statistic highlights how important it is going to be to balance the need to ensure the wellbeing of those who are still reliant on furlough is maintained and jobs protected, while encouraging people back into work.
Reduced Pool of Applicants
Another large cause of staff shortages is the reduction of available applicants due to Brexit and other travel restrictions. The Economic Statistics Centre of Excellence reported that 1.3m people born abroad had left the UK between the end of 2019 and the same point in 2020. Many of these people have not returned to the UK either due to COVID travel restrictions or work permit laws implemented because of Brexit.
Given that data suggested that 24% of the hospitality workforce in the UK were from overseas prior to the pandemic, the number who have left and haven’t or can’t return is devastating to the industry. The issue of a reduced pool of applicants to hire from is not one that is likely to go away without intervention, and many expect the issue to get worse.
Many people who work in the hospitality industry do so part time alongside their studies. It is expected that these students will leave their term time jobs at the end of the academic year to return home and enjoy a work free summer as things begin to fully re-open, adding to staff shortage issues.
Perceptions of the Industry
As well as these external factors, there are some hard truths the hospitality industry needs to accept in order to tackle this staffing challenge. Perception of the industry including long hours and low rates of pay, as well as a lack of investment in employees has exacerbated the impacts of COVID on the desirability of working in the sector.
Many, including Heath Ball (Managing Director of the Frisco Group), have commented that some in the industry have viewed staff as transient, and highlighted how hospitality has for too long underinvested in training and development which has caused staff to be under-skilled and reluctant to pursue a career in the industry. Addressing these issues by supporting staff and ensuring their wellbeing and development is maintained would arguably go a long way in diminishing this staff shortage and improve staff retention too.
So what is or could be done to address the staff shortage issues?
COVID Recovery Visas
Given that one of the main reasons for the reduced pool of applicants is travel restrictions imposed by Brexit, many in the industry are calling on the government to introduce COVID Recovery Visas, which could be implemented in a similar way to those in Australia. These would be temporary working visas that would allow people outside of the UK to come and work here for a set time.
Recruitment and Industry Drives
Businesses, organisations, and government departments have been working in partnership on several different schemes and campaigns to try and encourage people to work in hospitality. For example, the DWP is working with trade bodies and Job Centres to promote opportunities in hospitality. This aims to increase staffing numbers in hospitality whilst also improving perceptions of the industry.
The Government’s Kickstart scheme is still open and could provide hospitality businesses with a solution to staff shortages and the high competition present in the labour market.
The scheme provides businesses that are successful in their application with a grant to hire local unemployed young people on placements that last a minimum of six months. Not only does this scheme provide businesses with an easy and low-cost way to hire local staff, but it also provides the staff with industry specific and soft skills that will aid them in future employment.
If your business is interested in exploring this opportunity, Six Till Six in partnership with NTIA provides an application support service. You can find out more about the scheme and start the application process HERE