Navigating Talent Acquisition Amidst Labour Shortages: Strategies in the Hospitality Sector

Katie Thomas, Partner leading the Travel, Leisure and Hospitality Practice and Jo Mortimer, Consultant in the People and Culture Practice at Odgers Berndtson were joined by Kate Nicholls, CEO of UKHospitality, the leading trade body representing the broad sector, to discuss the talent challenges of these industries, alongside key industry developments.

Finding talent in the face of labour shortages

There is an apparent discrepancy between what ministers are discussing on labour shortages and the reality in industry. While the shortages are improving, there is still a lot of progress to be made in attracting and retaining the right staff in hospitality settings.

As the industry struggles to recover to pre-pandemic buoyancy, there are signs of a recovery on the horizon. Though venue closure and turnover are still at high levels, this does not necessarily translate to redundancies. Vacancy rates have also started to fall from around 12% last year to 8.5% - but this figure is still higher than pre-pandemic levels of 4%.

Immigration will continue to play a significant part in the labour shortage as immigrants have historically represented a large proportion of the workforce within these sectors. Notably, the shortage of chefs is a global issue which will only be exacerbated by the incoming general salary threshold changes for both long-term work visas and British or settled people applying to bring their partners to the UK. The change will see the threshold increase from £26,200 to £38,700 and while this may only affect a small proportion of workers, butchers and chefs are a key demographic that will be impacted.

To combat these issues, campaigns such as Hospitality Rising aims to promote the image of the industry and provide upskilling. Leveraging social media platforms such as TikTok has proven successful, particularly amongst young people; since the campaign’s launch, there have been 150,000 job applications through the scheme. Other mobility schemes specifically targeted at immigrants are also in development, aimed at encouraging students and young people to pursue work in these sectors alongside studies and thereafter.

Retention, training and professional development

UKHospitality is developing processes to document accredited transferable skills and their Hospitality Skills Passport aims to standardise and accredit basic training. The organisation is also campaigning for apprenticeship levy reform to assist employers in accessing funds to invest back into their businesses.

Sandra Kelly, the newly appointed Skills Director has been brought into the organisation to champion the drive for an employer-led approach to skills in the hospitality sector, focusing on ensuring a strong talent pipeline from education into employment at every level. Considering the dysfunctionality of the apprenticeship levy across borders within the UK, the increased utilisation of the levy is a key opportunity for the industry.

The current government’s emphasis on STEM subjects has not aided building the sector’s profile. Addressing challenges in attracting talent to the sector will involve creating credible career opportunities within the industry, promoting transferable skills and establishing stronger links with the education sector.

Labour’s new deal for working people

Labour’s new deal is widely welcomed but there are challenges in its implementation, particularly on the proposed scrapping of zero-hour contracts relating to the proposed first 100 days employment Bill. Day one employment rights for workers and proposed minimum hours have been well received but more needs to be done and Labour will need to give employees choice of how they want to work.

The proposed ‘reference period’ of 12 weeks which will be used to determine the average number of hours an employee works and is then entitled to going forward, has caused uncertainty. Although providing minimum hours to workers is conceptually positive, in practice, it poses several challenges both to workers and employers in terms of flexibility and cost. For example, it was agreed that seasonal workers’ preferred ways of working would not be compatible with the proposed minimum hours model in low season; an ‘opt out’ clause could potentially solve this issue.

A new minimum living wage of £15 per hour poses potential issues for employers, but updated legislation on tips and service charges that would see this classified as earnings would be clearly beneficial for workers. UKHospitality is currently developing a hospitality employee wellbeing charter which will provide clarity and certainty on hours, investment, and career opportunities.

At Odgers Berndtson, our sector-specific expertise and global network in travel, leisure and hospitality means we’re poised to support businesses in identifying and developing world-class executives with the ability to lead competitively against adversity.

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