Recruitment is the biggest barrier to hospitality growth, experts warn
During a panel discussion on attracting investment and planning for future growth, speakers agreed that both banks and private equity investors are increasingly willing to lend to SMEs with a differentiated proposition and good management.
“We believe the issue is actually not financing the company, but finding the people and having the right HR support in place,” said Hutton Collins partner Eric Bellquist, who sits on the boards of Byron Hamburgers, Novus Leisure and Wagamama.
“A good business with the right credentials and management team in place will not have a problem getting financing, and that includes start-ups,” added Barclays managing director for Hospitality and Leisure, Mark Saul.
Regulation challenges
Tourism VAT, airline tax and runway space were highlighted as key regulatory challenges for the industry. “20 per cent VAT means the UK hospitality industry cannot compete on a level playing field with Europe,” said Heikko Figge, head of hotels and leisure at Moorfield Group.
However, the panellists agreed that recruitment was a bigger barrier to growth than regulation.
“Regulation is adding pressures but the biggest challenge to growth is finding the right people, there is a lot of competition for the right people,” said Ron Pearson, partner at Bowmark Capital LLP.
Bellquist pointed out that even finding the right property in the increasingly competitive London market was not a problem for companies with the right property director in place and the right HR team to support them.
A great career
Improving the image of hospitality among potential employees and developing staff skills will be central to discussions of the new Tourism Council, which was launched at the summit by tourism minister Helen Grant MP.
“We need to dispel the myth that this industry is just for starter jobs. Yes it does provide starter jobs and is an important employer of women and young people, but it can also provide very fulfilling and valuable careers,” said Grant.
Hilton Worldwide EMEA president Simon Vincent, who will chair the council alongside Grant and skills and enterprise minister Matthew Hancock MP, said the UK should look to other European countries, where tourism is valued as a ‘great career’.
Attracting and retaining staff
Attracting new staff – in particular young people – was central to discussions at the summit.
Delegates heard about the success of the Big Hospitality Conversation, which is encouraging hospitality businesses to offer apprenticeships to out-of-work 16-24 year olds
Whitebread Hotels and Restaurants managing director Patrick Dempsey, who has recruited a number of apprentices through the scheme, said the industry should also target school children.
“There is an opportunity to go into schools and offer work experience so they can experience some of the different jobs and make a choice about whether hospitality is right for them,” he said.
Speakers also highlighted the importance of retaining existing staff. Suggestions to reduce employee turnover included offering regular training, making workplaces more fun and giving financial rewards such as a share in profits.
“The people issue is a big issue. It is expensive to hire people, and it is also expensive to have a high turnover in staff. If you train people well and keep them happy, staff turnover will be low, so training is key,” said Bellquist.
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