Long-term thinking and manageable changes key to solving hospitality staff shortage crisis

Arabella Dalloz, Managing Consultant, Head of Leisure at CACI, looks at the root cause of the hospitality staffing crisis, and how realistic changes can be implemented to attract workers back into the industry.

First published by MCA on 1 August 2022

We have all seen updates on the staffing crisis in the hospitality sector, and sadly such updates are only getting more regular. There is no miracle cure, but solutions are required. To do this, we need to have a comprehensive understanding of the situation and identify who is currently working in the industry and who needs to be enticed in. Only then will we be able to implement relevant benefits that will actually work.

The latest figures from the ONS show 174,000 vacancies across the hospitality sector, while a report from Barclays states 84% of restaurants across the UK are struggling to recruit. As a result, businesses are doing everything they can to be more tempting, examples of which include interest-free loans, support with housing, and rotas so flexible the staff can cherry-pick their own shifts. While these schemes are commendable, they play a part in a negative spiral of rising costs, in a context of global product supply issues, and cannot be seriously considered as long-term solutions.

Then take the money out of the equation for a moment.

We can also see the negative impact of this crisis on workers’ mental health. Imagine starting a brand-new job at a company you really admire, but one that is totally behind the staffing levels it needs. The pressure on you would be enormous, and no doubt you’d be asked to work longer hours to make-up the shortfall and essentially keep the business afloat. People who have worked in hospitality for a decade or more will tell you that overtime (often unpaid) was part and parcel of their culinary schooling, but the latest working generation simply don’t see it the same way.

But let’s move on from the doom and gloom, and start understanding more about why this is happening and how we can work to resolve it.

Some of the causes are blatant: the pandemic created redundancies and a lack of job security that forced workers into different fields; European staff – who previously made up a chunky proportion of UK hospitality – have left the country because of the combined problems created by Covid-19 and Brexit; and more recently the cost-of-living crisis. Indeed, the rising energy and product costs are said to be dampening the predicted post-pandemic recovery, but dig a little deeper and you can start to see where the green shoots of recovery might be.

First, we need to take a look at who our hospitality staff are, which we have done using our Acorn population segmentation tool. The main point to note is that more than half (53%) of hospitality workers are in the seven lowest income groups within our 17 main demographic groups. These are people who were most vulnerable in terms of salary and job security before the pandemic, so it should come as no surprise that they have been looking to move into another sector entirely with greater stability, especially in the midst of a cost-of-living crisis where these groups are disproportionately impacted. Many businesses have taken to increasing salaries to get these people back, but the lack of certainty is clearly diminishing the appetite to return in spite of a bigger pay packet.

Another finding, that might be obvious to some but is worth quantifying, is just how important young people are to this industry. Current students and recent graduates make up as much as 6% of hospitality staff, not a massive number itself, but a massive over-indexing when you consider that this group only makes up 2% of the population. Throughout the pandemic, students saw a very different version of higher education, mostly on a laptop screen within their own bedrooms. By spending almost all their time in their parents’ home away from campus life, they have been unable to fulfil key hospitality roles in university towns and cities, which is unsurprisingly where so many of these jobs are.

This is where things look up. Students are back at university and combining the cost of their degree with the rising cost of having a good time means they’re in need of cash. Sectors like hospitality and retail have always been magnets for students, but have lost out in recent times not just because of the pandemic, but perhaps more in the long term because of perceptions of overly demanding work environments. These perceptions can be changed, and students can once again be the heartbeat of hospitality.  The campaign must start now though.

We then go back to the fact that most hospitality workers are within our lowest income groups. When this data is mapped across the UK, it’s clear that those who would be targeted for hospitality jobs are much more likely to live on the edge of urban centres. Cities need more people working in leisure, but as things stand, the staff are living further away from the hospitality hub, likely priced out of the centre. As such, convincing them to trek all that way for relatively low pay and low job security is a hard sell.

One solution is cheaper travel. A few months ago, we had the highest train fare increase in nine years (3.8%) for England and Wales, and a recent study by Clean Cities Campaign found London, Manchester, and Birmingham to be the most expensive in Europe for public transport. That’s hardly what a commuter wants to hear, and it isn’t going to tempt people to travel long distances for work, especially at a time when public transport strikes are back in vogue.

However, we are seeing lots done in this area to combat recent years of consistent price rises. Schemes like those planned in Manchester and Liverpool to make bus travel cheaper will go a long way to bringing more vulnerable workers from the outskirts of a city right into the centre, where the hospitality jobs are aplenty. It’s also an option for the business itself. Yes, the sector has a poor track record for demanding hours and this is absolutely something that should – and is starting to – change, but tangible benefits that make a genuine difference to your target workers is what are really required now.

Supporting your staff’s public transport costs to work for example, could make an enormous difference to attracting and retaining the people you need, and is much more viable than the likes of housing support and flexible rotas. There is also an argument here that local authorities or national government should be working on such schemes to support their workers – they are reliant on a swathe of taxes and rates, so it is completely in their interest to do what they can to keep businesses open and trading.

We are seeing businesses in parallel sectors closing branches not because of trading challenges, but because of strains on recruitment, so it might seem trite and dismissive of wider issues faced by the industry to say cheaper travel is the way forward. I do stress that a free bus ticket is not on its own going to solve the staffing crisis in hospitality, but it is noticeable just how many businesses are scrutinising things like accessibility by public transport more when considering new sites.

The point is that to come up with a solution, you need to understand who your staff are – those in the industry now, and those you need to entice in – so you can enact targeted, small changes to the way you operate. It’s solutions that can outlive the crisis that we need, not short-sighted miracle cures.