What do staff shortages mean for UK hospitality?

Insight Comment Anecdotally, we’ve been hearing about staff shortages in hotels for a while now and the concerns of owners and general managers is being borne out in the data. The difficulty is what can be done about it. The Conservative government doesn’t show any signs of wanting to shift on immigration. That leaves trying to entice more domestic workers through higher wages — difficult given the financial state of much of the industry — and trying to cope with reduced numbers through efficiency and tech solutions. None of these are perfect.

Heading into winter it appears the UK hospitality industry is still struggling to find workers.

Recent figures from the Office for National Statistics show that the number of job vacancies in accommodation and food service activities had risen by nearly 50,000 in the three months til the end of September, compared with the before the pandemic.

The inability to recruit staff is causing hotels to rethink their operations and some are having to reduce opening hours.

Jon Fletcher, general manager at the Grange at Oborne in Dorset, said he would have to close the hotel, for two days a week, according to The Caterer.

"We've been advertising on and off since March for certain positions, and they still remain empty," he told ITV West Country.

It’s not only the pandemic that has caused problems, Fletcher also pointed to Brexit and fewer workers from the European Union.

"Since 2016 we've seen an almost complete halt in applications from non-British workers, so Brexit has almost definitely had an impact,” he said.

"I'd like to see some kind of plan to resolve it for the future. I just don't see where the next workforce is coming through. If they're not coming from Europe, which is where for the last 20 years we have had a lot of staff, where are they coming from in the UK?" 

What’s the Solution?

Previously, UKHospitality had estimated that EU nationals made up about  12 percent of the 3.2 million workers in the sector. With this number likely reduced and with a growing jobs market providing competition for domestic employees, what are the options?

Offering people more money is one option but with many businesses pushed to the brink because of the pandemic, that isn’t always viable. 
Another is to simply to try to keep going with fewer staff.

“Despite the shortage of hospitality workers, one can keep operations very nimble with a small multi-skilled SWAT team and through leveraging specialists to keep costs down,” Tom Magnuson, CEO of Magnuson Hotels, said.

“In-house digital marketing, in-house sales, local sales, group sales, in-house revenue manager, these are all roles which can be easily consolidated and compressed into simple out-sourced solutions. Now that dynamic pricing is here to stay, supply and demand can be more tailored to requirements, keeping costs  - and the need for additional staff - low.”

This isn’t necessarily doable for all roles. It will likely mean a mixture of increased wages, new ways of working and potentially help from the government. 

As Kate Nicholls UKHospitality CEO said in September: “We are a job creator and can drive economic growth and job creation, but further support from Government is required to realise this. Measures we are calling for include the long-overdue reform of business rates and a permanently lower rate of VAT for hospitality.”