79% of operators increase pay to improve recruitment crisis

By Rebecca Weller

- Last updated on GMT

Improving staff recruitment and retention: 79% of operators increase pay rates and 91% expect to hire more staff in 2022 (Credit: Getty/SolStock)
Improving staff recruitment and retention: 79% of operators increase pay rates and 91% expect to hire more staff in 2022 (Credit: Getty/SolStock)

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Almost four out of five (79%) of operators have increased pay rates for staff to improve recruitment and retention, with 91% expecting to hire more staff in 2022, the latest UKHospitality (UKH) and CGA Future Shock Report has revealed.

Furthermore, about two in five, or 42%, of leading operators have planned to open new sites in the next 12 months, according to the report.

Two thirds (66%) also felt confident about their business prospects for the next 12 months, according to the CGA ​and Fourth Business Confidence Survey November 2021.

CGA director hospitality operators and Food, EMEA, Karl Chessell said: “Just over two years on from the start of the pandemic, we can finally look to the future with positivity. The latest report reinforces the feeling of cautious optimism.

“Trading for managed groups is edging back towards pre-Covid levels. Consumers and business leaders are recovering their confidence and site openings are heading in the right direction.”

Variety of new challenges

Hospitality, which represents 10% of UK employment, is the third largest private sector employer in the UK, double the size of financial services and bigger than automotive, pharmaceuticals and aerospace combined.

However, operators are facing a long road to recovery as 91% are experiencing higher costs​ within the supply chain, according to the CGA and Fourth Business Confidence Survey November 2021, on top of rising costs ​across the board and increases in National Insurance and VAT ​due in this April.

Additionally, in the 2021 survey, 82% of operators stated they have had to pass on some of these financial pressures​ to consumers through food prices.

Chessell added: “Hospitality businesses now face a variety of new challenges and threats which come at the worst possible time for businesses, and they need sustained help from [the] Government.”

This comes as today (Wednesday 16 March) marks two years since Prime Minister Boris Johnson advised the British public to avoid unnecessary gatherings and to avoid pubs and nightclubs.

Sector still fragile 

In a tweet posted today, UKH chief executive Kate Nicholls stated two years of restrictions have caused £160bn lost revenue within the sector.

As reported last week by The Morning Advertiser​, UKH stated the hospitality sector, which generates £130bn in economic activity and £39bn of tax for the Exchequer, was the only industry to deliver post-pandemic jobs, growth, and investment at speed​.

Regarding the latest Future Shock Report​, Nicholls said: “Our analysis shows the sector will likely be contributing 1.7 percentage points to the national rate of CPI and the biggest contributing factor will be the planned increase in VAT from 12.5% to 20% this April.

“This will compound all the other cost increases, and further squeeze businesses.

“With positive action from Government, however, such as keeping VAT at 12.5%​, the sector can be part of the solution to the cost-of-living crisis.”

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