I’ve been to depressing business events in my time, but a hotel industry conference in central London the week after the EU referendum sticks in my mind. This was an industry that for years had depended on large numbers of enthusiastic, enthusiastic, flexible and hard-working young immigrants to fill its ranks, suddenly realizing that it had been the victim of an assault.
Even then, it was clear that the ideal solution – remaining in the single market, which would have softened any blow by allowing freedom of movement to continue – was not on the cards. The consequences were obvious and so during my speech, just out of interest, I asked to raise my hand to see how many people had actually voted for Brexit. Only one woman admitted she had.
I pointed out to her that her industry and business depended on EU personnel and she agreed, but said she rather wanted Britons trained to do the job. A good point, you might think, but when I asked her how much she was willing to spend on training British workers to replace EU citizens, she replied: “Nothing. This is the government’s job”.
At the time, it seemed like a reckless hope to bet on your business. But what has happened since has been even worse than my low expectations. The government has not trained young Britons in the hospitality game. In fact, he just sat back and did nothing. He even seems to believe that a labor shortage is not a problem for the hospitality industry, or even for the economy at large.
Decimated by Covid and now with massive energy price hikes, the hospitality industry has faced a triple whammy. Brexit destroyed its economic model and the government did nothing to help it. For such a labor-intensive industry, this is a disaster. One in 10 positions is vacant. The hospitality industry has lost over 120,000 European workers and the resulting shortcomings are abundantly evident on all high streets.
Just try to remember the last time you walked past a bar, restaurant, cafe or pub and there was no sign saying they were hiring.
You could accuse the industry of being lazy and too reliant on cheap overseas labour, but the fact is there just aren’t enough Brits willing and able to do the job.
It’s a shame, because if the industry needs a lot of maids, cleaning ladies and kitchen clerks, there is no shortage of jobs in the hospitality industry either. Training as a professional chef, hotel manager or sommelier can lead to great prospects, good pay, the ability to work around the world and, of course, the opportunity to start your own business and to thrive.
But the thing is, it’s on the mainland that you’re much more likely to find hotel schools or university courses in restaurant management, and that’s where being a waiter is seen as an interesting career. This has created a large pool of talent that in other times the UK sector could rely on.
Kate Nicholls, chief executive of industry lobbying group UKHospitality, told me: “Before Covid, 25% of our workforce were non-UK hospital pass nationals, split evenly between Europe and the rest of the world. We were one of the sectors of the economy that was not proactively recruiting overseas, we were recruiting locally, but it was non-British workers showing up.
This talent pool was already shrinking after Brexit, but during Covid many continentals went home and did not return. The British government has introduced a visa system to replace the pool of workers that free movement made available for free, but Nicholls knows it’s far too complicated and costly.
“It can cost between £5,000 and £10,000 per worker to be able to obtain a visa to enter the UK, and for many small businesses the cost is prohibitive,” she said. “There’s too much red tape, too much cost and it could be made to work much more efficiently.”
Not only that, but the visa system means that only well-paid workers can be hired. They must have an A level or even higher qualifications and pass a language test. This means that often where the shortage is most dramatic – for example for kitchen porters – there is no way the visa system can work for the industry. And even at executive chef or restaurant manager level, an extra £10,000 just to recruit someone is a real deterrent.
Matt Snell is the head of Gusto Italian, a restaurant chain with 13 locations across the country. He is just preparing his 14th, which is due to open in Oxford in December, but he is facing a crisis. After the huge knocks of Covid and now much higher food and energy bills, his business is also facing a labor shortage which is really hurting the business. “We are at the crisis point,” he told me. “This summer we were so short of support staff that we had to close restaurants completely or partially, or change the menu offer, and it cost us more than half a million pounds in sales, because we didn’t didn’t have enough leaders. in our profession. »
There is no prospect of improvement in the near future. Snell’s company is currently training 20 chefs it recruited from India, but the visa system means it pays what it calls a “stealth tax” to hire them.
For a restaurant chain wanting to grow, this is crippling, making everything more difficult and expensive. Its new Oxford site is due to open in a few weeks and yet so far it just can’t find the staff. “We are looking to recruit 20 chefs and 10 kitchen porters, people who wash the pots and empty the bins. Currently, we don’t have kitchen porters, we haven’t recruited any, we haven’t received any applications and we have only found six chefs,” he said. “We went to the Job Center in Oxford, they didn’t send us a single candidate for a job as a kitchen porter. This is a totally unskilled full-time role that would likely fetch upwards of £25,000. They couldn’t find anyone for us.
In a way, that’s not surprising. For the first time since records began, there are now more vacancies in the UK than people looking for work. This is creating problems for many industries, but the hospitality industry is one of the hardest hit as EU workers continue to flee the industry and the country.
Many of these EU nationals were also the most flexible and readily available workers. Remember that the hospitality industry is not limited to hotels, bars, cafes and restaurants. There’s a whole subsector that needs thousands of employees at a moment’s notice. Wedding venues, conferences, awards dinners, sporting events, company days, book launches and black tie events across the UK need chefs, waiters, hundreds of bar staff, cleaners and security guards, and they need them for a few hours once or twice a week. To achieve this, you need a large number of people who are experienced and, above all, willing to work an extra evening on a cold and wet Wednesday, normally in addition to their day job.
The UK workforce has also made large numbers of people redundant due to Covid, early retirement and long-term health issues, which means further reducing the pool of available talent by ending the free circulation was exactly the opposite of what the country needed. The cost is huge and affects all industries, but Nicholls knows the grim numbers in his industry. She said: ‘We just don’t have enough people in the workforce who can work to fill all the vacancies. Half of our businesses report having to restrict opening hours, capacity or occupancy, refusing bookings simply because they don’t have access to the staff they need. We are giving up around £22billion in revenue a year and the government is losing £7billion a year in tax.
All those closed cafes, empty pubs and unprofitable restaurants add up to serious long-term irreversible economic damage to the entire UK economy. For a government struggling to balance its books and close the black hole in its finances, you can imagine all of this would make it rethink its policy and the damage it is causing.
But apparently not. He doesn’t seem to care that his own policies, mismanagement and indifference to the consequences of his actions are costing him £7billion a year in lost tax just for the hospitality industry. That’s one hell of a hangover.