Chris Mumford, founder, Cervus Leadership Consulting, is part of the Inner Circle, a group of industry leaders and innovators we have brought together to help us contribute to debate in the sector.
The UK Government last week published plans for a new points-based immigration system to come into effect in January 2021. Under the plan, future EU migrants will need to qualify against a number of set criteria each of which nets them a certain number of points. The aim is to score 70 or more points. To misquote Bruce Forsyth, “What do points make?” In this instance Brucie, points make a damn great headache for the UK hospitality sector.
Points will be awarded for education level, English language ability, and for holding an offer of employment at a relevant level job. In addition, the job will need to be one of those designated as a ‘shortage occupation’. Currently the only jobs in hospitality deemed to be a ‘shortage occupation’ are Executive Chef, Head Chef, Sous Chef, Specialty Chef. Furthermore, to get a maximum 20 points in the salary qualifier, base pay must be at least £25,600 per annum; however a sliding scale exists going down to £20,480 for those in ‘shortage occupations’.
In other words, for a migrant worker to qualify for a visa s/he must at minimum possess a job offer, preferably as a highly qualified chef, must speak English, must make £25,600 or more and should be educated to at least A’Level. To put this into context, the median salary currently for front line and kitchen staff at hotels in London is approximately £23,000. Additional bad news for the sector came in the government’s decision to now include waiters and waitresses on its list of low-skilled workers.
The two pieces of good news – one being a removal on the cap of skilled migrants, and the other being the lowering of the salary threshold from £30,000 to £25,600 – were most likely overlooked by most hospitality businesses already too busy trying to deal with an acute labour shortage and rising costs. The Government’s proposal effectively puts an end to the hospitality sector’s reliance on low-skilled European workers and will encourage businesses, so the Government believes, to plough more investment into staff retention and productivity as well as to make advances in automated technologies.
The upshot is that operating expenditure is only going in one direction, upwards. Hospitality businesses will find it harder and harder, and thereby more and more expensive, to attract and hold onto good staff. Some technologies have already led to improvements in productivity but these tend to apply to back office functions and we are some way off robots pouring wine and taking the souffle to table 4. The Government can point to the economically inactive as a potential labour pool but the reality is that less than a quarter of those 8.5million are relevant and truly able to work. While the stated intent to ‘skill up’ the workforce is laudable, the hard truth is that all of this takes time and money both of which are in short supply. With less than a year to go before these changes come into play and with cost pressures mounting due to increases in business rates, goods and labour, hospitality businesses need to rapidly prepare for doing more with less.
Chris is part of the Inner Circle, a group of industry leaders and innovators we have brought together to help us contribute to debate in the sector.