Post-Brexit staffing

Labour migration in the hospitality sector
03/07/2017 - 07:27
As Brexit draws nearer, the UK catering and hospitality industry is asking how it will cope after the country leaves the EU. A British Hospitality Association report paints a gloomy picture, but what does the industry really think? David Foad reports.

After the general election on 8 June, the serious business of negotiating the UK’s exit from the EU will come into full force, and the hospitality and catering industry has more than most riding on the outcome. Much of its concern is focused on having enough willing workers to take the orders, cook the food and serve the drinks – and then clean up afterwards.

The British Hospitality Association (BHA) has published a report titled ‘Labour migration in the hospitality sector’ that highlights some of the anticipated workforce gaps. Drawn up by KPMG, an international firm providing auditing, tax and business advice services, it suggests that the sector could be heading for a shortfall of 1 million workers by the year 2029.

In areas such as London, moreover, in parts of the industry such as restaurants and among job roles such as waiting staff, it could be far worse, because each relies significantly more on EU nationals than what is average for the sector.

The shortage of UK resident workers in hotels and restaurants is so severe that some parts of the industry will need ten years to replace EU staff after Brexit, warns Ufi Ibrahim, chief executive of the BHA.

She adds that hotels and restaurants could fail if EU migrants are not allowed to continue to work in low-skilled jobs after the UK leaves the bloc.

As if to underscore the point, Pret a Manger’s human resources director told MPs recently that just one in 50 applicants for jobs at the company were UK residents.

“It is going to be very, very tough indeed,” says Ibrahim. “It will take a long time for businesses like Pret a Manger to replace EU staff because they are largely based in the south-east. I think it will take ten years to build a future talent pipeline.

"We want to avoid any cliff edge but the government must be aware that, in the medium to long term, we will still need considerable numbers of EU workers.

"We are aware of our responsibility to encourage more UK nationals to seek the career opportunities available in hospitality and tourism.

"We need the government to play its part, too, by recognising our employment needs and how important this industry is to the country."

And how important is it? The most recent estimate (based on 2011 data that defines hospitality broadly as ‘the provision of accommodation, meals and drinks in venues outside of the home’) puts the economic value of the sector at £57 billion. While this is only a ballpark figure, it is clear that the catering and hospitality industry already plays a significant role in the UK’s economy, and every economic forecast in recent years has suggested that this will only grow.

The KPMG report offers a forecast that the sector will face a recruitment shortfall of more than 62,000 a year from 2019 when Brexit is complete. It extrapolates that this could mean a gap of a million people between the actual workforce and the industry’s needs by 2029.

It’s an alarming prospect, but is the outlook really so bleak? There is good reason to believe not.

This scenario is based on a situation in which there is no new EU migration after 2019 and the recruitment of UK workers remains constant. Yet, it seems politically highly unlikely that there will be no new EU migration at all, with the Conservatives heading into the election with a manifesto pledge to keep overall net migration to ‘tens of thousands’ a year, for which most commentators say reads as ‘under 100,000’.

They also pledged a similar figure in the 2010 general election yet went on, in the coalition government, to miss the target by some distance.

The idea that UK recruitment will stay at current levels seems a little pessimistic, particularly as the industry embarks on new apprenticeship programmes partly designed to change this situation.

The UK is also phasing in the new National Living Wage, which is projected to rise to £9 an hour for over 25s by 2019 and could influence the career choices of young people in coming years.

Nevertheless, the industry faces some tough times – but what do those operating in the public sector and contract catering really think?

“EU workers are a small but valued proportion of our workforce. This proportion is larger and more significant in the London region,” says a statement from Compass UK & Ireland, a services provider that employs 60,000 people.

“Our focus is to continue to make Compass Group UK & Ireland an attractive place to work so that we can recruit and retain the best catering and service talent in the industry.

“This sets us up well for whatever exit deal and transitional arrangements the government agrees with the EU.”

Another in the contract catering field is Alison Gilbert (right), group human resources director with CH&Co Group, which employs 6,000 people across 600 sites in the UK and Ireland. She prefers to identify a skills shortage rather than a staffing shortage.

“Great staff are hard to find and we’re all fishing in the same pond. There’s some fantastic talent out there – just not enough of it.”

In terms of what a Brexit deal could offer the industry to help the situation, she says, “Personally, I would like the free movement of labour to continue. And not just for our European friends to be able to work in the UK but also for UK nationals to have the same great opportunity of working on the continent.”

She also agrees that the UK industry could – and should – do more to improve local recruitment.

“Unfortunately, hospitality is still not regarded as a viable career choice and this is a real barrier to recruitment. We all have a responsibility to promote this great industry, and tell the many stories of learning and progression that show the potential and diversity a career in hospitality can offer.

“There’s a huge amount of good work going on to bring about change. We are seeing the long-hours culture disappear and you really can earn a good living. Employers need to look after their people, develop their skills and learning, and give them a reason to stay.”

Looking to the future, she adds, “Apprenticeships offer us a real opportunity to develop talent at every level, and I believe that they will be integral in creating a motivated and growing workforce as we move into the unknown.”

In the public sector, though, The University Caterers Organisation (TUCO) chair Matt White (below, right) sounds a note of alarm.

“The likely impact of losing our EU nationals makes people in the university catering sector extremely nervous. The potential effect could be devastating,” he warns.

Part of the reason for this is that up to 60% of his workforce are EU nationals who are not UK residents or passport holders. A further portion are from countries outside the EU – often the spouses of those here on post-graduate studies.

Universities could face trouble too, he says, because “if EU research grants are withdrawn, it could have an impact on the availability of these workers, too”. 

White would like to see a Brexit deal with a permit system to allow people recruited from the EU to reside and work in the UK.

“Fruit growers are being vociferous right now, and we should be shouting from the rooftops and challenging the Government on these sorts of issues.”

He agrees that the industry needs to do more to recruit, train and develop UK workers.

“We need to plug that gap, and our TUCO Academy is one way we are looking to do that. We are also working with the Institute of Hospitality to look at how we can make our part of the sector more interesting.

“We definitely need to be doing more to extol the university sector and its virtues. It’s not a mundane job; you never have two days the same; you have different types of customers because we run conferences as well as look after students. And it’s exciting to be looking after undergraduate students who are ‘of the moment’ and provide us with a global customer base.”

There are limits, though, to recruiting home-grown talent.

“I think that, however often we try to recruit at the upper end of the market, catering assistant roles are rarely – if ever – applied for from a UK national.”

The care sector, too, struggles to showcase its attractions to potential UK workers.

“Historically, care catering hasn’t had a glamourous image or strong profile in the hospitality arena and this has made it less appealing than other sectors,” says Sophie Murray, deputy chair of the National Association of Care Catering (NACC).

“That has thankfully improved and now, regulatory inspections demand higher standards and training. We are at a stage where a specific catering qualification for health and social care has been successfully piloted. Once this is widely available, we will continue to raise standards in care catering and its appeal as a viable career.

“But,” she adds, “Employers also need to play their part, and offer competitive packages and development opportunities in line with other hospitality outlets.”

The care sector should also play to its strengths, she argues, by stressing the ability of those working within it to improve the quality of lives through catering.

“It’s a career that adds real value as well as enabling creativity with fresh, exciting ingredients. Social care providers need to champion catering within the care sector and celebrate it.”

Murray says she would like to see the Brexit deal include a strategic plan that incorporates recognition of existing non-UK qualifications and helps promote best practice guidelines with Europe in absence of European laws.

“This will maintain standards, and associations and local authorities will be crucial in supporting it and getting the message out to industry.”

Ultimately, she prefers to see a positive spin on the situation.

“It is possible to increase the UK workforce with better apprenticeship links and access to training and qualifications,” she says.

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