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“We are in the grip of a perfect storm of Brexit, Covid and furlough that is battering us all” Peter Banks, MD at Rudding Park on increasing wages and upping prices

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We all accept that hospitality is in the midst of a staffing crisis.

Is it a recruitment crisis, a retention crisis – or both? Certainly recruitment is an issue with one million less workers than pre-Brexit – more of which later – but should we also be honest with ourselves and maybe accept that we have been a little profligate and complacent as an industry. For too long we have shrugged our collective shoulders and said (to quote the Comic Strip series), “Timmy’s Dead – never mind we’ll get another one”, every time we have a leaver.

We are in the grip of a perfect storm of Brexit, Covid and furlough that is battering us all.

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There have been three bites at our staffing levels:

  1. In 2016 when the European staff who were sending money home suddenly found that their pound was worth 25% less (due to the drop in the value of the pound) and went home.
  2. When furlough started, many of our European workers went home and some of them then got jobs there and stayed. One million workers have left the UK to go home since 2016.
  3. The principal game in town is now your British worker. At Rudding Park we were 60% EU, 40% British. Now we are 70% British/30% EU. This furlough for a year has been like a paid Sabbatical for our team. They have been able to trial new different jobs while still having the safety net of coming back to us. Now that they have tried these new careers they have reconsidered their lives and the phrase “work/life balance” is front and centre of their thoughts.

We all know that hospitality is demanding, sometimes has high pressure from guests, sometimes anti-social hours and it requires dedication and passion. Many of my staff (for example I used to have 28 full time food and beverage service staff in the Clocktower Brasserie, I now have 12) no longer want to work early mornings, late nights and weekends. They have had the time to try a different role and have (to quote) “had a bit of a think about my life, and I’ve decided I’m going to look for something else”.

We have to make it worth their while to work anti-social hours – I could fill the hotel with staff Monday to Friday 9-5.30. Evenings and Saturday nights, not so much. The reward is no longer enough to sacrifice their work/life balance. The Europeans were hungry enough to want to leave their home country and come here and accept our rates of pay and conditions.

Our Brexit chickens are really coming home to roost. We now no longer have sufficient European labour and British labour has decided that the rewards and conditions are not enough for a demanding job.

Frankly we need to pay much more for working antisocial hours, and we must keep staff to only working their contracted hours. No longer can we expect staff to stay for another two hours, pull a double shift or an AFD. If we need to pay more and have more staff we need to charge more. If we all do this as an industry our guests will realise that the nice barman doesn’t really want to be on his side of the bar on a Saturday night – he’d much rather be on the other side with his mates and family, as such we have to recompense him for this sacrifice. He’s not doing it “because he’s in Hospitality”, he’s doing it because he needs to earn money.

If we accept that one million workers have left, the hospitality industry isn’t the only industry fighting for staff; drivers, warehousing, healthcare, supermarkets, NHS, council workers, all of these industries are fishing from the same smaller talent pool. We need to look after our teams, love them and recompense them better than the competing industries otherwise we will all be in trouble.

Ultimately – and I won’t be popular in the industry for saying this – Brown and Blair opened the labour market to unfettered immigration to solve a labour crisis for lower paid earners. We (as an industry – a generalisation, but true in the round) took advantage of this additional labour to keep wages low, therefore being able to be competitive/make more profit. Suddenly this artificial crutch has been kicked away, and there are only four logical outcomes:

  1. The government realise that they are in trouble and allow additional labour in somehow (whether that is European, or from Hong Kong or wherever they will find labour).
  2. We all pay our staff more and charge more, and our guests understand that and spend money paying more for our services. This is the government’s preferred option as the tax take is increased through increase in VAT (when we go back to 20%), increase in income tax and increase in NI and pensions. For every pound extra a member of staff is paid, the government increases their take by 54 pence (20 pence Income Tax, 14 pence Employer NI, 12 pence Employee NI, 8 pence Employer and Employee Pension. This would be a very clever tax hike by the government as they haven’t had to increase taxes, but their take is increased – for them, what’s not to love?
  3. We do nothing and we can’t operate at capacity as we don’t have enough staff, (look at Le Gavroche for example). Operators close, therefore reducing the market for our guests to use. The demand remains the same, supply is limited, we can all then charge more and pay our staff more. The market eventually normalises, but at the cost of numerous hospitality businesses.
  4. We become more efficient as an industry. For that read more automation, more efficiencies = less employment. How easy is that to achieve quickly without damaging service levels?

That’s my view. The only option for us is to increase wages, prices and improve efficiencies, provide staff with a less stressful and more enjoyable working environment and hope that we (as an industry) survive better than the other industries.

Increase wages, headcount (as the staff will only be working their contracted hours) and as such prices to pay for this increase, and fundamentally LOVE our teams. Understand that every leaver from the industry is a self-inflicted wound. If we don’t act now and change our perception, increase rewards and improve working practices we are in danger of bleeding out.

Tags : CAREERSRudding Parkstaff
Zoe Monk

The author Zoe Monk

3 Comments

  1. Excellent opinion Peter, harsh reality but necessary, I’d suggest your staff will recognise the investment and commitment with a higher degree of loyalty

  2. Peter,

    Excellent summary and your conclusions are spot on.

    We have ‘opportunity’ and we must be bold to compete against other industries for our precious commodity, our colleagues!

    Thank you for your thoughts
    Rob Glashan

  3. This is a classic conundrum that revolves around supply, demand and value. The demand is there but the question is will the supply of labour be able to match it. It would be wrong to assume that simply by reducing the supply of boutique hotels customers will willingly pay more or that the Government will lean in. There is too much choice in the UK but more importantly outside to believe UK customers will just front up the extra expense.. The challenge is to provide incredible ‘perceived’ value and that is about creating an extraordinary experience. In that way one can charge the rates that enables you to pay good people serious money and for employees to value the experience of working a Saturday night. Is it time to think more deeply about what customers now value in this new post COVID world?

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