Brexit means foodservice will struggle to find the workers to fuel its expansion plans
Brexit and proposed plans to restrict immigration in the UK continue to cause headaches for the hospitality industry, as industry experts warned that difficulties in hiring staff will limit the expansion plans of companies in the sector.
GlobalData forecasts that over 7,500 new foodservice outlets will open in the UK between 2016 and 2020. However, foodservice chains are heavily reliant on migrant workers. As part of its general election campaign, the ruling Conservative party re-affirmed its commitment to lower net migration to the “tens of thousands”. Difficulties in finding workers at an affordable wage will put this outlet expansion at risk.
As a result of decreased migration, the foodservice industry will likely need to up its game in order to appeal more to British job seekers. Hospitality jobs are often seen as low paid and low skilled. The recent increases to minimum wage may help alleviate the pay issue. But firms will also need to do more to provide skills training and career progression programs in order to show British workers that the hospitality industry offers a viable career.
Both the wage increases and increased spending on training will eat into the already squeezed margins of operators. And expanding and improving training programs is not a simple task. However, forthcoming limits to migration mean that operators may not face much of a choice.
Existing programs to reach out to the long-term unemployed, while successful, are unlikely to
yield sufficient workers to match demand. The British Hospitality Association claimed that a scheme launched in association with the Department for Work and Pensions had created 67,000 new careers for long-term unemployed Brits in the hospitality industry over the past three years. However the BHA also claimed that EU migrants alone account for 700,000 of the 4.5 million workers in the hospitality industry.
This makes the outcome of the Brexit negotiations of vital importance to the foodservice industry. Should the Brexit deal substantially curtail the freedom of movement of workers, a proposed “barista visa”, allowing young workers into the UK for a 2 year, non-extendable term, may alleviate the pressure. However this is unlikely to fully plug the gap, especially if migrants see the UK as an unwelcoming host, and chose to move elsewhere.