Flapship talent – what Brexit means for recruitment

Flapship talent – what Brexit means for recruitment

When the Pub & Bar team were sat in our initial 2019 planning meeting, it seemed like a fine idea to run a focus on Brexit and recruitment in the first issue of the year. “Oh, we’ll know more by then,” we agreed. “Negotiations will be over, deals will have been made – it’ll be a timely update for our readership…” Yeah, great. That worked out well, didn’t it? How naïve we were.

As I sit here contemplating how to write an informative article on a topic that is drowning in ambiguity, I honestly wonder whether it’s worth filling the next four pages with sodding great big question marks – I’ll give my byline to The Riddler. For not only do we know as little as we did back when we scheduled this feature, but on the morning of this article being written, it was announced that our prime minister would face a vote of no confidence in her leadership (she survived that, FYI). This just days after she deferred the anticipated vote on her then-current Brexit deal. Funnily enough, we didn’t live out the week of Brexit clarity that the whole industry/country was hoping for. Even so, the discussion around recruitment in the hospitality industry in a post-Brexit Britain remains prevalent and vital. So let’s dive in, shall we?

Your people

Immediately after the referendum result, plenty of business leaders in the on-trade were quick to reassure their European workforce of their value in whatever way they could. There was understandably a great deal of confusion and concern among thousands of employees across the industry. Since then, employers have at least been able to comfort a large proportion of their teams after the government announced that EU citizens and family members who have been in the UK for five years by the end of 2020 will be able to apply for ‘settled status’, meaning they are free to go on living and working in the UK indefinitely. This was welcome news.

It’s with that current workforce that the message of ‘career for life’ becomes more important than ever. We regularly hear our peers preach how the mindset of on-trade workers needs to change, so that they see the potential in a lifelong career in this world. If the mindset needs to change in order to drive recruitment and retention, then so does the recruitment strategy. How can on-trade operators communicate the career paths available to employees through job adverts?

A recent survey of 21,000 global hospitality workers from caterer.com revealed that 65% plan on quitting their jobs in the near future. Worryingly, over half of those workers (59%) plan on moving in the next six months. The research explored the key attributes that tempt hospitality workers to explore new pastures. Career progression was the most important factor (16%) for those employees, showing they want long-term prospects within a company. Salary came in second (14%), followed closely by training and development (13%) – staff want to feel invested in by their employers. Promote the progression you can offer. If the pay is decent, shout about that too. You can train, you can develop – job adverts need to be more than a ‘bartender needed’ sign in the window.

The sector has seen a reduction in apprenticeships since the Apprenticeship Levy was introduced in 2017, with a low uptake from small businesses and, in turn, fewer opportunities have been available for young people to enter the industry. Last year’s Autumn Statement saw the chancellor announce that the government will halve the amount small businesses have to contribute from 10% to 5% when taking on apprentices – fingers crossed this increases industry apprenticeships and on the job training. This young blood could be essential in the months/years ahead.
Back to Brexit

At the end of last year, the UKHospitality Christie & Co Benchmarking Report revealed that recruitment has already become more difficult, with one in five employers reporting that EU nationals have already left the business as a direct result of Brexit.

“The effects of leaving the EU are already beginning to be felt by some employers,” said UKHospitality CEO Kate Nicholls at the time.

What’s more, November 2018 saw the news that the number of EU migrants was falling, which added greater concern to the industry. With lower levels of unemployment across the country, the feeling is that there will be less people applying for work in hospitality and the reliance on EU migrants filling those job vacancies will be greater. Should this worry the on-trade? Nicholls thinks so.

“A fall in the number of EU migrants is seriously worrying for hospitality employers,” she says. “This staffing shortfall will only become more acute if the government pushes ahead with a plan to exclude many potential hospitality workers as part of its future immigration policy. If businesses do not have access to the workforce, how are they expected to hire people, grow their businesses and invest? Should the tier 2 test on skills and salary be applied to all post-Brexit migrants, as currently proposed, we estimate that 80-90% of potential hospitality jobs would be excluded.”

My Twitter feed would suggest that the overall effect of Brexit will be negative and will hinder recruitment in an industry that’s already experiencing difficulty when sourcing and retaining talent. But that only reflects the accounts that I follow – who knows what Mr Farage thinks? More to the point, who bloody cares? I’m aware that the names that make up my social media contacts don’t allow for a balanced perspective on the matter at hand, but this magazine should do. Many believe that leaving the EU will damage this industry’s access to workers, but not everyone is of that opinion. Most of all Wetherspoon’s Tim Martin, who I spoke with when writing this piece.

“Things will change a bit in the future, but the extent of the change is wildly exaggerated,” he says. “Anxieties about staffing in the hospitality industry as a result of Brexit are misplaced. As a result of a good economic performance, unemployment is at a record low of 4%, and recruitment is always difficult in these circumstances. 
“Leaving the EU doesn’t mean an end to immigration. Many democratic countries have higher levels of immigration than the UK has had since we’ve been a member of the EU – New Zealand, Singapore, Australia and North America are examples. Immigration to the UK last year was about 280,000 people, two thirds of whom came from outside the EU. With a fairly low birth rate, the UK needs a sensible level of immigration, as is the case for successful economies everywhere, but Brexit means it will be controlled by our own government.”   
Sector resilience

According to the Office for National Statistics, the UK hospitality sector is displaying resilience in the face of this economic uncertainty, having achieved a total annual turnover of £102bn and 4% year-on-year growth. Adia, the hospitality recruitment platform, highlights that growth in the sector is down to 4% from the average growth rate of 6% achieved between 2013 and 2017.

Although some are predicting an employment crisis in the industry post-Brexit, Adia’s analysis shows that more than 2.35m people are now employed in the sector – an increase of nearly 500,000 in five years. Whether that increase continues from this April remains to be seen.

But site closures in this industry are no secret, and the administrations and CVAs seen across the high street last year have no doubt contributed to the number of businesses operating in the sector falling by around 8%, let alone the long list of cost hikes and taxes that operators face every day. But it’s the aforementioned numbers that need to be focused on: a turnover of over £100bn; employment of over 2.3m – if you’re going to continue to flourish and hire through Brexit and beyond, this industry needs greater protection. 

“Although there is much to be encouraged by in these figures, the declining number of businesses operating in the sector makes for uneasy reading,” says Terry Payne, Adia’s UK country manager. “An industry that contributes more than £100bn annually to the UK economy is significant and its role as a wealth and job creator needs to be protected.

“The significant growth in employment reflects both the demand from consumers and from those who want the working flexibility that the sector is able to offer. But, as an industry, we need to be even more agile in the way we employ and recruit staff, making greater use of technology and social media, for example, to recruit staff and help businesses manage costs more effectively and resource according to peaks in demand.”

I was hoping that by the time I had finished writing this article, a miraculous announcement about our country’s future would have been made, providing me with the tools to construct a credible and reassuring conclusion for our readers. No such luck. We’re none the wiser. What we do know is that this sector is the UK’s third biggest employer – there are millions who want to work within it. While the messages you’re receiving about your team’s future may be as cloudy as Somerset cider, you need to make sure that your communications are the complete opposite. For those currently in your ranks, reassurance and encouragement is key – provide as much clarity as possible. And if you’re on the recruitment drive, do all that you can to show off just how rewarding a career in hospitality can be. As we leave the EU, no matter what Brexit curveballs have been thrown between the time of writing and when you read this, that final, gratifying point will always truly remain.