Hospitality business owners have responded positively to the staff shortages caused by the pandemic, by increasing wages and implementing improved staff retention strategies.
But the industry is still facing a ‘fundamental shift’ from April, according to a top hospitality group boss.
While the tills are jingling again at a crucial period in the run-up to Christmas and while customers have been flocking back to restaurants, bars and other hospitality venues, the sector, like the rest of the UK, has been hit by staff shortages.
Increasing pay levels
The chief executive of trade group UKHospitality, Kate Nicholls, said the sector has the potential to lead the UK recovery and has called on the Government to support the industry by relaxing immigration rules to fill the shortages and review tax rates for hospitality businesses.
In a recent survey, three-quarters of pub and restaurant bosses said they are increasing pay to attract staff as one in six jobs is vacant.
The CGA business confidence survey spoke to 200 senior executives from across the hospitality industry and also discovered that 96 per cent of business leaders were seeing staffing shortages for some roles.
Meanwhile, former HBOS boss Andy Hornby, who leads Wagamama-owner The Restaurant Group, said the industry will face higher wages bills, and VAT support and a rent moratorium ending next April.
Supply chain pressures
Those changes add to current pressures, from staff recruitment challenges to supply chain difficulties. He said: “I consider myself very lucky that I am running a scale business that has been through a refinancing.”
He told hospitality news site Propel: “I have genuine sympathy for some players who will be looking at Q2/Q3 next year, especially Q2, when three things will happen on one day.
“That is going to be a pretty fundamental shift for the whole sector, so you have to put your capex where you are most sure it is going to benefit from.”
Accountancy firms will be at the forefront of this challenge and their expertise will be crucial in helping clients through a difficult period.
The CGA survey, which was conducted by the research firm with technology specialists Fourth, showed that the shortage of staff was prompting bosses to step up efforts to attract and retain workers.
Around 76 per cent of respondents said they had offered better pay as part of their retention strategies, while 75 per cent had stepped up levels of communication with staff in an attempt to increase retention levels.
Drive further job creation
In response to the survey, Kate Nicholls said: “With the right support and conditions, the sector has the potential to be at the forefront of the economic recovery.
“In order to drive further job creation, we urge the Government to implement a long-overdue reform of business rates and a permanently lower rate of VAT for hospitality and tourism in order to help fragile businesses back on their feet.”
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