The proportion of EU workers in the UK hospitality industry has dropped to its lowest level since 2019, leaving restaurants, hotels and pubs struggling to afford pay increases to attract domestic staff.
EU employees now account for 28 per cent of the hospitality workforce, down from 42 per cent before the pandemic, while British workers make up 55 per cent compared with 46 per cent in 2019, according to data from Fourth, a hospitality industry software firm, which analysed labour at more than 700 businesses.
The overall number of people working in hospitality is down by 12 per cent since the start of Covid, Fourth said, indicating that in absolute terms the switch to UK workers was still far from replacing the number of EU staff who had left.
The Office for National Statistics said last month that almost 100,000 EU nationals had left accommodation and food services in the two years to June 2021 — the highest of any industry.
David Page, executive chair of Fulham Shore, which owns The Real Greek and Franco Manca restaurant chains, said that around half of the group’s 1,600 staff went back to their respective continental European countries in 2020 while receiving 80 per cent of their salaries through the government’s furlough scheme and initially declined to return.
“We paid them 120 per cent [of their salaries] to come back,” Page said, adding that the group ultimately lost 10 per cent of staff but had since raised wages by about 20 per cent thanks to strong delivery sales.
Kate Nicholls, chief executive of industry group UKHospitality, said that wages were up on average by 11 to 13 per cent compared with 2019 at the same time that hospitality businesses were battling sharply rising energy and food costs. They were also facing increasing pressure to clear pandemic-related debts as government support schemes and insolvency protections fell away this month, she added.
Pre-Brexit the hospitality industry was one of the sectors most reliant on European workers, along with farming, manufacturing and nursing. The combination of the UK’s exit from the EU and the pandemic, which prompted many foreign staff to return to their families, has caused acute staff shortages across these industries.
Analysis of government data undertaken last year estimated that as many as 1.3mn workers returned to the EU during the pandemic with more than half of those from London.
Daniel Kos, chief financial officer at hotel group PPHE, said hopes that staffing issues, which began to be noticed in April last year, would ease had not materialised and hotels were having to limit occupancy by shutting rooms or raising rates as they battled a lack of cleaning staff in particular. “If a room is not clean you cannot sell it,” he said.
Restaurant and hotel owners told the Financial Times that the scramble to replace EU workers meant that many had recruited far more young people, creating challenges for hard-pressed existing staff who needed to train the youngsters.
Several, including the food-to-go chain Pret A Manger, have also made efforts to recruit Ukrainian refugees.
PizzaExpress said that 34 per cent of its staff were under 20 now compared with 18 per cent before Covid. Zoe Bowley, managing director, said the company had introduced “digital learning and gamification” into its training as it adapted to Generation Z preferences.
Patrick Marrinan, managing director of the noodle chain Pho, which had seen a nine-fold increase in employees under 20 since 2019, said that young staff preferred part-time work, which meant double the amount of recruiting and training.
But, he added, Pho had actively moved to recruit younger staff with a much higher presence on newer social media platforms such as TikTok. “We have had several TikTok videos go viral for recruitment and they have brought levels of direct approaches that we haven’t seen in the past.”
Rising Covid cases are also causing challenges for short-staffed hospitality businesses but Kos described the issue as “manageable”. Several other hospitality bosses said they were no longer mandating tests for staff.