Transient labour costs the hospitality and tourism industry £33.4m a year, according to new figures published by Sector Skills Council People 1st.
The use of temporary workers cannot be relied upon to fill the growing management shortage either, said People 1st in its State of the Nation 2011 report.
The research revealed that while the hospitality, leisure, travel and tourism sector is one of the fastest-growing in the economy, accounting for one in 14 UK jobs, businesses are struggling to recruit high-calibre managers.
While the economic downturn has made it easier to recruit staff, there are significant opportunities for highly skilled workers with the creation of an additional 69,000 managerial posts by 2017.
Martin-Christian Kent, director of research and policy at People 1st, said: The difficulty of finding managers with the relevant management and leadership skills is becoming more acute.
"The current trading conditions have intensified the need for managers to have a broad range of skills and, in recent years, the traditional pathways to become managers have been eroded, making it more difficult to encourage people into the profession."
As a result, businesses - particularly in hospitality - are bridging the skills gap through temporary staff or recruiting personnel without the full range of necessary skills.
More than a third (35%) of employers surveyed said they recruited transient labour, 58% admitted the sector relied heavily on temporary workers and 47% agreed that the level of reliance was too high.
The research also revealed that high-end establishments (44%) were more likely to rely on transient frontline staff than budget operations (33%).
People 1st chief executive Brian Wisdom said: "Transient labour continues to cost the sector an estimated £33.4m through constant recruitment and initial training.
"While we recognise that transient labour gives businesses the flexibility to respond to fluctuating customer demand, this short-term approach contributes towards the poor image of the sector and limits productivity."
Kent added: "We urgently need to attract and retain skilled workers to the sector and increase the effectiveness of employers' investment in training. People 1st believes that a new collaborative approach to address the systematic challenges of the hospitality sector is essential.
"A hospitality guild that is currently being established by People 1st in England should provide a strengthened and simplified focal point for industry bodies and businesses to achieve these aims."
By Janie Stamford
E-mail your comments to Janie Stamford here.
If you have something to say on this story or anything else join the debate at Table Talk - Caterer's new networking forum. Go to www.caterersearch.com/tabletalk
Looking for a new job? Find your next job here with Caterersearch.com jobs