New Year’s revolution: how the hospitality sector will combat the staffing crisis in 2022

By James McAllister

- Last updated on GMT

New Year’s revolution: how the hospitality sector will combat the staffing crisis in 2022

Related tags: Recruitment, Staff, D&d london

Labour shortages have left hospitality businesses across the country scrambling for staff, and desperate to find a long-term solution to the recruitment crisis.

Of all the attempts to try and find a quick fix to the hospitality sector’s ongoing staff shortages, Gravity Southside’s decision to add a trio of androids to its workforce is certainly one of the more novel. Back in October, the self-styled ‘department store of fun’ in Wandsworth announced it had ‘employed’ three android workers to help support its restaurant teams. Called BellaBot, FinnBot and OllieBot, each can each be programmed to deliver up to five trays of food and drink at a time and come equipped with voice modules to help make sure that customers are served the correct orders.  

It’s an extreme example but Gravity’s decision to ship android waiters over from China could be seen as reflective of the lengths to which some businesses might need to go if they are to plug the labour gaps on their rotas. And even that might not be enough. Afterall, as Gravity’s founder Michael Harrison was keen to point out at the time: “Gravity Wandsworth is still hiring human staff to work alongside our new recruits - and we’re eager to hear from candidates across the whole of the hospitality sector.”

A widespread problem

In the months since Coronavirus lockdown restrictions began to lift in April, there isn’t a single hospitality business that hasn’t been impacted in some way by the dearth of available staff. It’s a crisis that’s reached all corners of the country, and the sector. Back in the summer, research published jointly by UKHospitality, the British Beer and Pub Association (BBPA), and The British Institute of Innkeeping (BII) found that nearly 100% of businesses had open vacancies, primarily concentrated in front-of-house roles; non-head chefs; and kitchen porters.

Analysis by student work app Stint of vacancy data from the Office for National Statistics (ONS) predicts the number of unfilled hospitality jobs will sit at around the 163,000 mark this December; an increase of 75,000 on December 2019. According to Stint, one of the key staffing issues the pandemic has created is bar staff, waiters and concierges not returning from furlough. Over the final six months of furlough the number of individuals in hospitality accessing the scheme fell by 831,000, yet during the same period it reports that vacancies increased by almost 100,000.

Many had expected that the winding down of furlough, which expired at the end of September, would help turn the tide, but that doesn’t appear to have been the case. “Things are getting marginally better, but it’s not improving fast enough,” says UKHospitality chief executive Kate Nicholls. “The end of furlough is not having enough of an impact. We’ve lost a large number of people from our workforce, sadly through death because of Covid, and people who have left the UK and left the towns and city centres.”

Coming at a time when the consumer demand has perhaps never been higher, fewer staff on the rotas has forced many operators to reduce opening hours and, in some cases, close sites entirely to ensure the workload remains manageable for their teams.

D&D London, which operates an estate of nearly 40 sites in the UK across the capital, Leeds, Manchester and Bristol, says that trading in some of its restaurants have been constrained by the availability of skilled staff, with the company having to cap covers as a result. Its recently opened Alpine-inspired venue Haugen in Stratford had to delay the launch of its second restaurant space due to labour shortages, having initially only been able to recruit around 80 of the 150 staff required to run the entire operation.

“I reckon we are turning away 10% of our business at the moment,” says Des Gunewardena, chairman and CEO of D&D London. “We don’t want a situation where the restaurant is rammed, and the service isn’t good enough. At one particular restaurant we are now fully staffed in the kitchen but not front of house; while five or six weeks ago it was the other way round.”

According to Gunewardena, some of D&D’s restaurants are currently open for five days rather than the usual seven. Angler, its Michelin-starred restaurant located at the top of the South Place Hotel in the City of London, has temporarily reduced the number of days it’s open from five to four.

“We have always had staffing challenges, but I’ve never seen anything quite like this. Coming out of Covid everybody wants to be out and so we’ve got a job do to in rebuilding the workforce.”

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A report published by the ONS in September found that the hospitality sector was more than twice as likely than other industries to be experiencing challenges in filling job vacancies. Some 30% of hospitality businesses had reported that job vacancies were harder to fill than normal, compared with 13% across all industries.

“I reckon we are turning away 10% of our business at the moment”

This is supported by testimony provided by global job site Indeed, which says the problem for employers is that the supply of workers simply hasn’t kept up with demand. “Food preparation and service was one of the hardest hit sectors during lockdown with job postings plummeting to almost a tenth of their pre-pandemic level during the depths of 2020,” says Jack Kennedy, an economist at Indeed. “After bottoming out in June, vacancies slowly started to climb before soaring - in line with the overall jobs market - after the Government announced its roadmap out of Covid restrictions.

“The problem for employers is that the supply of workers simply hasn’t kept up with demand for staff and this has caused bottlenecks up and down the country that persist today. These challenges have been compounded by the perfect storm of the pandemic and Brexit, which meant hundreds of thousands of foreign workers returned to their home country with few signs at the moment that they are looking to return.

“We’ve also seen that people in occupations like driving, construction and cleaning are now less likely to consider working in hospitality than they were previously, which suggests employers will need to cast a wider net in order to fill vacancies.”

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Rising wages

Amid the struggles to recruit, operators across the sector – from fine dining to fast casual – report an uptick in attempts by rival businesses to poach staff, often with the promise of a better pay packet. “The level of poaching at the moment is absolutely crazy,” says Nicola Gartenberg, executive director at the Adam Handling Restaurant Group, which has sites in London, Windsor and Cornwall. “If you spoke to the majority of our restaurant teams, they’ve all been approached by competing businesses.

“Yes, we’re all struggling, but the pandemic has shown that hospitality is a resilient industry. As businesses we should be backing each other not trying to knock each other down.”

In a bid to both attract and retain staff, many employers have boosted salaries in the hope it provides a short-term fix. Figures from Indeed show that hospitality wages have grown by 4.6% so far this year, making the sector one of the fastest growing in terms of pay.

This is borne out in a recent report from hospitality software provider Fourth, which found that hourly rates of pay in restaurants and pubs have been climbing steadily since trading restrictions were lifted in April. They are likely to continue to do so into next financial year with the introduction of new National Living Wage (NLW) rates, whereby the headline rate for over-23s will increase from £8.91 to £9.50 per hour.

Fourth’s data, aggregated from the analysis of more than 700 companies across the hospitality sector, reveals that in the 23 and over age bracket, wages for back-of-house roles in pubs have risen to £9.98 an hour, while in restaurants they're at £9.59 – both well above the current NLW. In front of house roles, it’s slightly lower, with pubs paying an average of £9.17; and restaurants exactly £9.

At D&D, hourly wages have increased by up to 15% compared to pre-Covid rates, with Gunewardena saying that the business is being much more flexible with accommodating the hours people want to work. “We are trying to look at innovative ways of getting our restaurants to work for people and how they want to live,” he says. “Someone might want to only work during the week, so we are trying to get our workforce to be adaptable enough for this.

The company is also looking at models where people are paid more money for working on a Friday and Saturday night as opposed to a Tuesday or Wednesday lunchtime.

Pizza Pilgrims, which operates a 20-strong estate that’s almost entirely based in the capital, is another that has committed to raising wages. Four months ago, it increased its hourly salary to no less than £10. “It’s a hard job and if you want great people you have to pay for them,” according to Thom Elliot, who founded the business with his brother James back in 2012.

Others have gone further. Last month, upscale London coffee brand WatchHouse announced it is to become an accredited London Living Wage provider, pledging to pay the entirety of its 200+ strong workforce a ‘real living wage’ of £11.05 as minimum as of this month. London-based restaurant and hospitality company Green & Fortune has also announced that all current and future employees will be paid ‘beyond’ the London Living Wage.

From 1 December the ‘vast majority’ of Green & Fortune employees will be earning more than £12 an hour for positions across the company. “Providing a better than average rate of pay will play a big part in attracting people to the industry and is a part of our strategy to ensure we both recruit and retain great talent,” says John Nugent, Green & Fortune’s chief executive.

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Money isn’t everything

While there are plenty that have hailed wage rises as key to making hospitality a more desirable career option, others are sceptical. “We are happy to pay well for good people, but one thing we are really adamant about is we are not just jumping up all of our pay rates to attract people,” says Natasha Waterfield, COO at New World Trading Company, which operates sites across the UK under brands including The Botanist.

“What we found is that people have joined us for £14 an hour, and then left us for another job that pays £16. We will pay well and do everything we can to reward people, but we can’t sustain our business if we pay ridiculous rates.”

Nicholls describes the current recruitment landscape as being an incredibly challenging environment. “Everybody wants higher wages but that has to be balanced with the jobs,” she says. “Not everyone can earn a high wage.

“We are competing in an economy where you have Amazon advertising for jobs that pay £22 an hour, and we are going to damage ourselves as a sector if we try and compete with these rates. Instead, as an industry we have to focus on what’s good about hospitality and how we treat our people, to show that it is a viable career choice.”

In Marlow, chef Tom Kerridge is in the midst of a recruitment drive at his Michelin-starred flagship The Hand & Flowers. “Our wages have always been pretty good, but we have reassessed the package we offer workers to make it more attractive,” says the chef, who also operates the one Michelin-starred The Coach pub in Marlow alongside a wider UK portfolio that includes Manchester restaurant The Bull & Bear; and Kerridge's Bar & Grill in London. “We’ve done it slightly differently, though.”

Rather than increase wages, Kerridge has introduced a system at his Marlow sites whereby all staff from kitchen porters upwards share a percentage of profit made by the business, which they’ll receive as a bonus on top of their salary. “That’s what I see as being the future within most hospitality businesses,” continues Kerridge. “Incentivising staff is always something you need to do as a business, and the more hospitality realises this and starts looking at the bigger picture then it should move forward.”

Jeremy King, co-founder of London-based restaurant group Corbin & King, agrees that hospitality companies have to offer more than a heftier wage packet. “Definitely people can be paid better but I don’t think it’s the solution [to the staffing crisis],” he says. “We’ve had people who have left us for establishments offering up to 20% more, and then come back. Money is not everything; it’s about the whole package.”

Indeed notes that as well increasing wages, another way hospitality employers have tried to cope with shortages is by offering signing on bonuses, with some companies giving as much as £1,000 to new recruits. However, despite those inducements, recruitment struggles remain rife.

“The bad news is that pay hikes and cash incentives aren’t yet having the desired effect of luring people to the sector,” says Kennedy. “Jobseeker interest in food preparation and service jobs is just over half that of the average job on Indeed.”

‘Change, listen and adapt’

What can employers do, then? Businesses can only go so far when it comes to pay before the higher rates start eating into their margins. “So, as well as broadening their search for workers, employers should also think about how their roles fit with people’s values and priorities,” says Kennedy.

At New World Trading Company, Waterfield is placing a particular emphasis on this. “What’s crucial is that you change, listen and adapt. Our staff’s priorities prior to the pandemic are completely different to now. Before Covid it was more about providing benefits alongside the job, now there’s a lot more attention on making the time they spend at work as productive as possible.”

To that end, New World Trading Company has begun looking internally at the roles if offers and exploring how technology can be used to reduce the number of overall staff needed and allow the business to devote time to creating more ‘thought-provoking jobs’.

“We’ve had people who have left us for establishments
 offering up to 20% more, and then come back.
Money is not everything; it’s about the whole package”

“It’s a long, slow gain,” adds Waterfield. “Most of us are trying something to address the recruitment issue. But it’s a very small pool we are all fishing in, and I don’t see the labour market improving soon.”

Corbin & King has also worked to make its workplace as inclusive as possible to different employee’s needs. More emphasis is being placed on hiring older workers, and also encouraging more women into the sector; in some cases offering shifts that begin at 11am and end at 2:30pm, in order for there to be flexibility for staff to do the school run.

In a bid to bring new people into the sector, some operators have created their own recruitment academies. They include D&D London, which recently launched a permanent chef training programme having trialled the initiative over the summer.

Hosted in partnership with hospitality career-development platform Electric Mayonnaise, D&D offers two training schemes that operate on a monthly basis and take place at the group's 100 Wardour Street restaurant in Soho. The first is an intensive, five-day course that’s open to anyone, and sees successful participants awarded with an Entry 3 Introductory Certificate at the end and secure employment in one of D&D’s restaurants. Modules cover basic cooking, organisational skills and food hygiene, with a focus on additional skills such as teamwork, task and time management and effective communication.

The second course is targeted at commis chefs with at least six months to a year of professional kitchen experience and offers an eight-week deep dive designed to cover all the basics an NVQ level 2 in professional cookery would. Modules include preparing and cooking fish, meat and poultry, sauces, pastry, and food hygiene skills, with successful participants accredited with a Laser Award in ‘Extended certificate in Cookery’.

Before the pandemic even hit, Pizza Pilgrims had created its own training academy, which operates alongside the group’s pizzeria in Camden. Elliot hails it as a success that’s helped give new employees a place to train and build up confidence. “We’ve held five or six recruitment events there since launching in March 2020. We use it as a way of bringing people into the company in an engaged and sensible way. It gives new employees a non-scary place to do their first week on the job.”

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Attracting young blood

New data released last month revealed that 210,000 millennial workers have left the hospitality industry since December 2019, with younger workers stepping up to fill the gap. As part of the Rebuilding Hospitality: The Changing Shape of the UK Workforce report, created using data from workforce management platform Deputy, independent economist Shashi Karunanethy analysed more than 1.5 million shifts from Deputy’s rostering systems worked by more than 14,000 UK hospitality employees over the past 22 months.

Examining restaurants, bars and pubs, accommodation, cafes and coffee shops, and fast food and takeaways, it revealed a significant shift in industry staffing, with the proportion of millennials working in the sector having declined from 49% to 42%. At the same time, the proportion of workers from Gen Z rose by 5%, which equates to around 150,000 workers.

Ian Leigh, managing director at Thai Leisure Group, which operates 18 restaurants across four national chains including Chaophraya, Thaikhun, Yee Rah and Chaobaby, says the age profile of front of house staff, in particular, has gone down in the past six months, making recruiting for senior roles more challenging. “A lot of them may be students and for them hospitality might not be their chosen career,” he says. “They have lots of energy and enthusiasm, but maybe not as much experience.”

To develop talent within the business, Leigh has created a range of specialist roles intended to help upskill existing employees. These include a group bar manager, who has helped train up team members who started out as bar backs into managerial positions; and a training manager who works with floor staff to help move them into more senior roles.

This also extends to the kitchen, where progression opportunities are being offered to porters to develop them into prep chefs and starter chefs and, later, wok chefs. “We are such an important employer to the young,” continues Leigh. “We can shape how they feel about work. We need to do our best, reward them for the hard work they do, push them out of their comfort zone to learn new skills, involve them in the team, even if they’re just part time, and give them that ladder to progress.”

A perfect storm

Struggles with recruitment are by no means a new phenomenon for the sector, but the events of the past two years have exacerbated the problem to a degree never seen before. Many place the blame squarely on Brexit, but there are other factors to consider.

“It’s a combination of Brexit and furlough,” says Gartenberg. “Furlough was one of the best things to ever happen to us, but also one of the worst things in a sense that we all strive to offer a work/life balance, but it’s also tough and people working in this sector do rack up a lot of hours.

“We supported staff during the lockdowns and launched home delivery, which was great for the chefs. However, it went two ways. Half the team were clamouring to come back, and the other half realised they preferred an alternative lifestyle and not the intensity of the industry. And this combined with staff from the EU who returned home and never returned.”

Kerridge believes the dual impact of Brexit and the pandemic has created a perfect storm for the industry. “So many hospitality businesses are operational through overseas staff, who have a vast skillset that is the backbone of the industry. The biggest issue right now is Brexit and the fact they’re not allowed back because they’re not seen as skilled labour. It’s leaving our industry incredibly exposed and in a very fragile position.”

At present, the Government does not include hospitality jobs on its shortage occupations list, which offers lower barriers of entry and reduced visa fees for certain professions. Calls have been growing from across the sector in recent months to loosen the rules. In September, a group of more than 65 hospitality leaders including Jeremy King, Yotam Ottolenghi and Skye Gyngell signed an open letter to the Government demanding roles such as chefs, bartenders and sommeliers be added to the shortage occupations list. So far, the Government’s response has been to tell businesses to focus on training British staff, but operators argue there is not the manpower in the UK to fill the vacant roles.

“At the moment’s the Government’s view is you shouldn’t be using people from the EU – just increase salaries and find British people and there will be no problem,” says Gunewardena. “I guess they mean increase salaries and then increase prices to customers. If you look at what happened with the fruit pickers, the idea was they would be replaced by British people, but they weren’t as efficient, and we couldn’t get enough of them, so the fruit lay unpicked.

“The golden scenario is we increase salaries, more people come to the industry, we charge higher prices that the customer is prepared to pay, restaurants remain busy, and we maintain the quality. The not so good scenario is we increase salaries, we don’t actually get any more staff and the existing workforce is no more productive and so you just have inflation. Then we have to simplify menus and have fewer staff front of house. If we have to move to model like that the quality of restaurants in this country will really suffer.”

Gunewardena believes common sense will eventually prevail in terms of Government controlling immigration. “I hope we will see the sense in that we actually need the best people for our industries and economies to flourish. We will become a better paying industry and get more staff coming in from the retail sector­.

“The industry is facing huge challenges in the next six to 12 months. We will need to learn how to work with fewer people and look at techniques for improving productivity.” 

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