The uK Hospitality Sector's Struggle to recruit Staff After Brexit & CovID-19

Sarah

During the Coronavirus lockdowns in 2020, the UK hospitality sector grounded to a halt as cafes, restaurants and hotels were forced to shut. This gave businesses no choice but to furlough workers or make them redundant. The estimated 600,000 redundant workers moved to other industries, left the UK, or retired. Training programmes were also paused, which cut the flow of new skilled individuals entering the labour market. As a result, when businesses reopened there was a severe struggle to recruit new staff, in particular cleaners, front of house and waitstaff.

Additionally, Brexit saw an end to the free movement rules of the EU, meaning EU citizens no longer have the right to live and work in the UK without permission. Instead, they must obtain a visa, which is only available for middle to high skilled workers applying for a job earning over £25,600. This has forced 197,000 international workers to leave the UK since 2019. The hospitality sector was worst hit losing 46% of its workers from the EU, which used to make up 40% of its workforce. An estimated 89% of businesses have been dissuaded from hiring overseas workers, due to the tougher immigration rules imposed. In April 2022 UK employment was 0.9% below pre-COVID levels and job vacancies were at a record high of 1.3 million, reflecting businesses struggle to recruit. In particular, the hospitality sector has 174,000 vacancies.

This has had a tough effect on businesses, with 43% having to cut trading hours or close for certain days due to staff shortages. The lost revenue is valued at an estimated £21 billion due to unmet demand, while £5 billion has been lost in tax revenues. Some businesses have risen wages by 22% in order to attract staff from the highly competitive labour market, while others have invested in staff welfare, embraced flexible working and introduced bonuses. This comes at a time where firms are also facing rising food and energy bills, exacerbating the economic hardship thousands of hospitality businesses are facing.