The UK hospitality industry faces many challenges, not least its steadily deteriorating finances as detailed in our recent sector report. Among the most intractable are ongoing and chronic staff shortages, which undoubtedly underly a significant proportion of the financial pain.

The situation has reached such a pitch that the All-party Parliamentary Group for Hospitality and Tourism had announced it was launching an inquiry into recruitment and retention in the sector. Unfortunately, this was just a matter of days before the General Election was called, so it may never happen.

What are the causes of these issues, and what might the solutions be?

Hospitality vacancies

In purely numerical terms, hospitality is the third worst sector for vacancies behind healthcare and the wholesale/retail trade. The current figure is 107k in the three months to April 2024, which is a vast improvement since the pandemic-driven peak of 176k in Q2 2022 and not that far above the immediate pre-pandemic total of 93k in the three months to February 2020.

As a percentage of overall staff posts, hospitality fares even worse, having the highest sector vacancy rate of 5.1%. This compares with 3.2% for the economy as a whole.

One view might be that it’s not that more jobs are being filled, more a case of them no longer being there as businesses have cut opening hours, downsized dining space and pared back menus to reduce the need for kitchen staff.

Operational implications

A survey in the summer of 2023 commissioned by a number of trade bodies in the industry, including UKHospitality revealed that 61% of hospitality businesses reported having staff shortages, and 42% were reducing weekend opening hours as a consequence. The UKHospitality CEO stated that staffing problems were making a third of businesses close on some days or close earlier than before.

Impact on service quality

Quite apart from financial and operational effects, labour issues are at the root of many anecdotal complaints about declining service standards in hospitality venues. This comes at a time when input cost inflation for goods and labour has forced owners to put up prices substantially.

Higher prices and poorer service would be a toxic combination in most business sectors, but drinkers and diners have so many alternatives to choose from. They are also struggling to justify the use of scarce disposable income, so they are entitled to expect something better in return and to take their spending power elsewhere.

Staff retention

30% of workers leave within the first 90 days because the job doesn’t match their initial expectations.

Underlying causes

These are many and various but include:

• Public perception – 20% of UK adults consider it an unappealing sector to work in.
• Working environments – are often poor and can be dangerous.
• Unsocial hours and unpredictable shift patterns.
• Uncontrolled bullying within the workforce
• Limited career prospects.
• Poor training – especially ‘onboarding’ of new recruits.
• Low pay – the Low Pay Commission estimates that 46% of hospitality workers are on the National Minimum Wage.
• Boorish customers.

Potential solutions

Immigration

Despite the major political parties vying to be the toughest on legal migration and to be the most believable about training more British workers to fill vacancies, the reality is that hospitality will remain reliant on foreign workers for the foreseeable future. UKHospitality is campaigning to have key roles such as chefs and sommeliers added to the Immigration Salary List, which came into force in April 2024, as well as for other changes to the immigration regime.

Apprenticeships

The Apprenticeship Levy has been a success in driving the take-up of apprenticeships in hospitality, but it’s clear that it needs to be more flexible and offer businesses greater control over how funding is spent. Here too, UKHospitality is pressurising the political parties for the change needed by the industry.

Improving the working environment

Employers need to consider a wide range of ways in which hospitality can become a more attractive career option, either on a short or longer-term basis. Areas to consider include:

• Recruiting and welcoming older workers.
• Paying competitive wages and benefits.
• Recognising and rewarding hard work.
• Eliminating bullying culture where they find it.
• Providing career progression opportunities where possible.
• Developing better internal communications with staff.
• Recognising and supporting staff with mental health challenges.
• Understanding better the different attitudes of millennials and Gen Zs to their work/life balance and to flexible working arrangements.
• Improving training, with a particular emphasis on better ‘onboarding’ and also on teaching staff management and motivation techniques to more senior staff.
• Embracing technology where it can eliminate mundane tasks and improve other aspects of the business.
• Investing in raising working environment quality.

None of these changes are simple, and there are cost implications. But, with staff shortages and a disaffected workforce, hospitality businesses will continue to struggle. While we can only hope that future government measures help to improve staffing, there is much that hospitality businesses can overcome in their business operations to improve staff retention.

If you are seeking professional advice for your business, Opus is here to help. You can speak to one of our Partners who can discuss options with you. We have offices nationwide and by contacting us on 020 3326 6454, you will be able to get immediate assistance from our Partner-led team.