The Recruitment Crisis in the British Hospitality Industry: A Case for More Sustainable Practices

Introduction

The hospitality industry plays a significant role in economic and social development in the UK. The industry employs 3.2 million people, produces £130 billion of economic activity and generates £39 billion in taxation for the UK government (UK Hospitality, 2018). The hospitality industry comprise that part of the services sector represented by pubs, bars, cruise ships, restaurants, catering companies, guests houses, branded hotel chains, travel agencies, tour operators, airlines, event agencies and visitor attractions. In the next 10 years the industry is projected to produce around 72 million jobs (Ghani et al., 2022). However, globally, the hospitality industry continues to suffer from the challenge of attracting and retaining high quality talent resulting in poor organisational performance and the lack of sustainable growth. Research into turnover rates in the industry revealed that turnover in the hotel industry is double the national average compared to all other industries (Malek, Klein, and DiPietro, 2018). This chapter examines why it is still difficult to recruit and retain hospitality employees.

The issue of recruitment and retention of hospitality staff is nothing new and has been the topic of research and debate for decades (Ohlin & West, 1994; Iverson & Deery, 1997; Pratton, 2003; Lashley & Chapman,1999). Employee retention has been identified as one of the biggest challenges in the 21^st century, particularly in the hospitality industry (Ghani et al., 2022). So critical is the situation in the UK that some hospitality businesses are forced to close several days a week losing up to £21 billion in trade (McAlister, 2022). The decision to leave the EU has exacerbated the situation in the UK and has resulted in 200,000 circa hospitality workers leaving the country (Financial Times, 2022). The UK no longer allows free movement of labour from the EU. Employers must use the Points Based System (Tier 2) to recruit non-UK workers but this is costly. Tier 2 requires the employer to sponsor an employee at a cost of £1,476, and each employee is then required to pay for a Certificate of Sponsorship at a fee of £199. The application for a visa would cost the employee around £575 although this may be paid for by the employer. When all the costs are factored in, it is estimated that employing an overseas worker cost an employer as much as £3,250 excluding the standard administrative and legal costs and any relocation fees. The decision to leave the EU has lessened the pool of workers that would ordinarily be available to work in the hospitality industry. The problem with Tier 2 is that unless you are highly skilled and earning over £20,000 annually you are unlikely to gain sufficient points to qualify for the visa (www.gov.uk/skilled-worker-visa/if-you-work-in-healthcare-or-education). Applicants usually need to have degrees or higher-level qualifications, should have spent time living in the UK prior to applying and need to pass an English sufficiency test. Tier 2 would be more suitable for highly skilled imported labour as the cost of the visa would probably deter those seeking low skilled jobs. However, the recruitment crisis, though exacerbated by Brexit, does not have its roots there. Besides, even if there were pools of migrant labour available, being highly dependent on migrant labour can create conflicts and competition between migrants and locals for jobs and in the work place. A predominant migrant work force in one organisation could create cultural problems and have an effect on the marketing and brand management of the company. A hospitality business is a product of its destination environment and should reflect the culture and essence of the place. It is therefore important that this essence is represented by a balance in the employees that are hired.