How to mitigate the impact of Brexit on the UK’s hospitality industry?

Changes to the UK immigration system mean that as of January 31st 2021, any low-skilled, non-UK worker earning less than £20,480 will not be allowed to be employed in the country.  

For an industry such as the hospitality sector, which relies on more than an estimated 700,000 of these ‘low-skilled migrants’ to perform necessary labour roles, this cessation of free-movement will be “disastrous for the hospitality sector and the British people”.

With the home office taking such a firm line towards fulfilling their referendum manifesto, what steps can hospitality businesses in the UK make to lessen this potentially crippling blow to staffing in the industry?

Here, Gameplan discusses the importance of non-UK workers to the UK’s hospitality industry, and how employee engagement, and the gig economy, can offer some reprieve for hospitality in the post-Brexit UK. 

What does the hospitality industry in the UK currently look like?

Over the past five years, hospitality in the UK has thrived, responsible for 5% of the GDP, 1% of total UK investment, and largely responsible for the regeneration and growth seen in high streets and town centres throughout the UK. 

Nationwide, there are currently over 45,000 hotels, 26,000 restaurants, 47,600 pubs and 24,000 coffee shops employing over three million people. The traditional pub trade has seen a significant downturn in numbers; however, all other types of hospitality establishment have enjoyed steady growth.  

Undoubtedly, this can largely be attributed to innovative home-grown business ideas and talent, but a crucial aspect of this growth and prosperity in the sector is due to the heavy reliance on non-UK workers. 

With the imminent change in free-movement policy, businesses in the sector desperately need to find ways to entice new UK talent into the hospitality industry, and then keep them working there. 

How vital are migrant workers to the UK hospitality industry? 

A recent KPMG study commissioned by the British Hospitality Association estimates that EU nationals comprise up to 35% of the hospitality workforce in Greater London, with the national average at 25% of the workforce – as such, the industry is heavily reliant on non-UK workers to fulfil low-level, but nonetheless essential roles to the functioning of the businesses. 

This means that depending on where you are in the country, as of January 2021, as many as one in three entry-level hospitality roles, such as kitchen porter, housekeeper, barista, waitress or bartender, will be unfilled.

The study also showed that 75% of waiters and waitresses, 25% of chefs, and 37% of housekeeping staff are from the EU. 

These roles all fall under the minimum salary threshold as laid out by the home office’s new immigration laws. In London, where wages are significantly higher than other regions of the UK, low-skilled roles such as these can expect to earn an average full-time salary of; 

As such, only UK nationals will be suitable to fulfil these roles. 

However, for many people of the UK, the hospitality industry is seen as a ‘stop-gap’ or ‘dead-end’ industry, where people take temporary roles while they are studying or between jobs. 

This prevents many UK nationals from wanting to take employment in the sector and presents the industry with a potential staff crisis if companies are unable to attract and retain new staff to fill the looming vacancies. 

What hospitality businesses must do, then, is make the industry more appealing to work in. 

How can hospitality companies attract and keep domestic staff?

With the hospitality industry facing a potential 700,000 staffing gap in under a years’ time, companies in the sector should be searching for any way possible to mitigate the impact this will have on their business. 

While the home office is recommending businesses embrace AI and automation to steel themselves against this staffing deficit, those working in the industry know that business takes time to adapt and that the traditional customer service experience of going to a bar, café or restaurant can not be replaced by an automation.  

And as there is little room for hospitality companies to increase their salaries to attract and retain new national talent, the sector needs to rapidly adopt new strategies to continue enjoying profitability in the post-Brexit UK.  

One of the best ways to do this, then, is to add social value to the roles and inspire employees to see the potential benefits of working in the hospitality industry. 

One option, of course, is to demonstrate the global demand and rewarding opportunities for highly experienced and trained chefs, sommeliers, cocktail bartenders and maître d’s, most of whom start in entry-level positions and grow. 

Not everyone will be able to advance like this in their hospitality career, however. And as such, companies also need to find a way to make entry-level roles for staff more fulfilling. 

Short of increasing pay, the most effective ways for hospitality companies in the post-Brexit UK to increase employee satisfaction, productivity and retention by focusing on employee engagement, and then minimize staffing shortages by capitalizing on the opportunities offered by the gig economy.   

Keep staff with employee engagement 

To compound the looming staffing shortage caused by the changing immigrant-worker policies, staff turnover in the UK hospitality industry is at an all-time high of 30%. 

This costs businesses substantial amounts in under-staffing, retraining and onboarding. As a way to reduce staff turnover, and attract new national workers to the industry, hospitality businesses need to boost employee engagement. 

Employee engagement essentially means workers feel appreciated and listened to in the workplace. Managers can achieve this by building a culture of trust, respect, allowing individual expression and friendly competition between staff to make them feel a valued part of a greater community. 

Communication is essential for this to happen, and an increasing number of UK hospitality businesses are noticing the employee engagement benefits of using integrated workforce management software to grow their culture and staff satisfaction. 

What this software also enables, is for businesses to source much-needed staff from a deep talent pool of entry-level workers to fulfil jobs that will be left vacant once ‘unskilled’ non-UK workers are no longer permitted to work in the UK. The pool consists of approved agencies who have the chance to become listed here.

The gig economy to reduce the staffing burden for hospitality companies post-Brexit 

The rise of the gig economy in the UK has been one of the most significant trends to impact the workforce over recent years. There are an estimated 4.7 million workers throughout the UK taking jobs over digital platforms on a temporary basis, with that number on the rise.

With this growth, the home office is necessarily adapting to make the gig-economy more appealing to work in. For example, Theresa May requested greater protection of gig-workers, including the right for workers to be able to request full-time contracts. 

As staff requirements in hospitality are highly seasonal, the gig-economy has already proved to be highly beneficial to businesses needing to fill vacancies on an as-needed basis.

What integrated workforce management software also offers is the potential for UK workers to pick-up relatively well-paid shifts without a commitment to the role, while fulfilling the needs of the hospitality business.

These new migrant-worker laws are going to happen, and businesses need to begin preparing themselves for the changes that are right around the corner. 

Business owners can request a demo of Gameplans’ integrated workforce management software to see how they can benefit from using the platform, and potentially reduce the impact that not having access to migrant workers will have on their business.

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Learn more about Gameplan and how we can help your business.