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Labour costs pushed ever upwards as hospitality battles to retain staff

Published:  19 April, 2022

Staffing issues continue to set back hospitality’s recovery from Covid-19, according to a new survey, which has found that nearly four out of five hospitality leaders have offered higher wages to try to retain staff.

CGA and Fourth’s newly released Business Leaders’ Survey dives into the recruitment and retention challenges which remain a major concern for hospitality leaders.

Amid intense competition for team members, the survey found that four out of five hospitality leaders have increased pay by an average of 11% over the past 12 months in order to tackle widespread job vacancies and upward pressure on labour costs.

Meanwhile, confidence has also suffered. Just over half (52%) of leaders feel confident about recruitment and retention over the next 12 months, while two-thirds of business leaders also say the National Minimum Wage and National Living Wage increase this month will be a key challenge in 2022.

“Our survey highlights the level of concern that the scramble for staff is causing across hospitality,” Phil Tate, CGA Group CEO, said. “While there are some signs of improvement in the first quarter of 2022, major shortages and severe upward pressure on pay are likely to continue throughout the year. On top of other rising costs, supply issues, the end of VAT relief and fragile consumer confidence, it is yet another challenge to the recovery of the sector, which needs and deserves sustained support from government.”

Although concerns continue to swirl around the ongoing labour shortage, CGA’s survey also highlights some of the innovative ways businesses have sharpened their HR strategies in order to improve staff retention.

For example, many are stepping up levels of communication with staff (85%), creating more learning opportunities (82%) and focusing on staff wellbeing and mental health (72%).

Technology and smart solutions will also continue to play a key role. Sebastien Sepierre, MD of EMEA at Fourth, added that it’s “more important than ever that sector businesses are continuing to plan ahead”, with technology forming a vital component in how businesses accurately manage demand and ensure they have the optimum number of staff across shifts.

Actual job vacancies also appear to have dropped slightly. Currently, nearly one in 10 roles (9%) remain vacant and open for applications – a drop from 14% in late 2021.

However, three in five hospitality leaders also say they will recruit at a greater rate than usual this year – a jump of 13 percentage points since the last confidence survey in December.