Vacancies drop but wage bills climb as hospitality tackles labour issues

Labour shortages at Britain’s top managed hospitality groups may be starting to ease, but rising wage bills are piling more pressure on some fragile businesses.

That is according to CGA by NIQ and Fourth’s 2023 Business Leaders’ Survey, which found that one in 11 roles (9%) were vacant, a drop of two percentage points since the last survey in October 2022. The rate of churn – the proportion of staff leaving a business in the last three months – dipped by three percentage points to 16%.

Despite improvements since the turmoil of Brexit and Covid-19, vacancy and churn levels continued to cause concern, with only a third of leaders (33%) saying they felt confident about their ability to recruit.

Attracting and keeping staff has also come at a significant cost, with hospitality businesses raising their pay by 12% and 11% for new and existing staff respectively in the last 12 months – just ahead of the rate of inflation.

Over half (57%) of business leaders said cultivating the right working culture had been effective in improving retention, while a high level of communication with staff (41%), a focus on staff wellbeing and mental health (33%) and creating learning and development opportunities (33%) had also been impactful. Industry collaboration – including via the Hospitality Rising campaign – has also helped to improve the reputation of pubs, bars and restaurants as places to build a career for younger workers.

Sebastien Sepierre, managing director – EMEA, Fourth, said: “While the pressures related to labour shortages might be starting to ease, it is apparent that workforce-related challenges are very much continuing to keep operators awake at night. The fact that only a third of business leaders feel confident about recruitment right now indicates the importance of retaining existing members of staff and keeping them motivated.

"Technology plays a pivotal supporting role here, helping businesses to forecast demand as accurately as possible, enabling them to optimise their workforce planning so they are best placed to combat the issues present during this challenging period. This, in turn, makes it easier for businesses to hire, onboard, engage and retain team members, helping them to operate as effectively and efficiently as possible.”

Karl Chessell, CGA’s director – hospitality operators and food, EMEA, said: “It is encouraging to see that hospitality’s hard work on recruitment and retention is starting to pay dividends. However, with thousands of jobs still vacant, wages rising sharply and the cost of living crisis hitting consumer spending, there is no room for complacency. Hospitality is one of the UK’s most dynamic industries for job creation and it can kickstart the economic recovery, but first it needs targeted government support on labour shortages and cost challenges.”

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