Staff shortages disrupting hospitality sector growth

By Michelle Perrett

- Last updated on GMT

Recruitment crisis: staff shortage continue to impact the sector (image: Getty/sturti)
Recruitment crisis: staff shortage continue to impact the sector (image: Getty/sturti)

Related tags: Economic growth, Finance, Recruitment, Food

The tourism and recreation sector, including the pub market, saw its growth rate ease, as the impact of staff shortages took hold.

According to the Lloyds Bank UK Recovery Tracker, businesses pointed to a levelling-off in forward bookings for UK holidays, and cited restricted capacity caused by staff shortages.  

The reported issues surrounding food supplies, including concerns about chicken​,  also saw producers who sell to the pub market including food and drink manufacturers wrestle with labour shortages. 

Restricting production capacity

It was revealed earlier this month that pre-existing recruitment challenges – particularly in the hospitality market – had been worsened by Brexit, new research from the Lumina Intelligence​ Top of Mind Business Leaders Survey has revealed.

It was also revealed at the beginning of August that six in 10 hospitality firms​ had staff off work after being ‘pinged’ resulting in 267,000 – the equivalent of 13% of the industry’s workforce having recently been or were currently self-isolating. 

The Lloyds Bank UK Recovery Tracker said that momentum in the UK food and drink sector stalled, as output declined at the fastest pace in eight months. Severe staff shortages, driven in part by large numbers of workers being asked to self-isolate, were cited as restricting production capacity.  

Disrupting business activity

Meanwhile, labour and supply chain issues sustained strong input price inflation, the tracker said. 

Scott Barton, managing director, corporate and institutional coverage, Lloyds Bank Commercial Banking, said: “While the UK recovery remains on solid ground, staff shortages and higher materials costs are clearly disrupting current business activity and future prospects, most notably in the hospitality sector.  

“Recent adjustments to the self-isolation rules should help alleviate staff shortages. However, the ongoing impact of the pandemic and Brexit may result in labour market pressures that persist for some time longer. Against this backdrop, management teams will be urgently considering how they can ensure their growth ambitions remain on track.” 

Related topics: Rebuilding the Pub Sector

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