The latest State of Financial Wellbeing: Hospitality Outlook 2023 was compiled by financial wellbeing experts Wagestream with input from leading bodies including the Money and Pensions Service, StepChange and the Work Foundation.
The study, which benchmarked the views and actions of 10,000 workers and 1,000 employers across the UK, was first unveiled in 2021 in a bid to improve the understanding blockers and drivers of workers’ financial wellbeing.
It highlighted 67% of hospitality workers have reduced their spending while almost a third (30%) have used savings to make ends meet.
Four in 10 (42%) have missed a bill because of the cost-of-living crisis, which was 56% more likely than the rest of the workforce.
One fifth (21%) reported to be struggling at work as a result – 31% higher than the rest of the workforce.
Almost a third (30%) worried about money every day but just 1% of employers realised this was the case.
Some 14% of employees said they had nothing in savings and just 1% of employers realised it.
However, workplaces are taking steps to close the gap with three quarters (76%) having introduced at least one new financial benefit to its teams last year. The most common of these were educational workshops, health cash plans and flexible pay.
Severely insecure work
Overall, almost six in 10 (57%) of hospitality employers focused more on the issues in response to the cost-of-living crisis but this was a 20% decrease on the average across other sectors.
The report findings have resulted in experts urging the Government and employers to act with further measures to reverse the trend.
These calls include short-term support packages to improving workers’ rights and support structure for the long term.
Specifically, it recommended hospitality workers should look to improve the security of work provided to team members.
Lancaster University director for The Work Foundation Ben Harrison said: “While millions more people may be in employment, the quality and security of jobs they are in often means they are unable to make ends meet.
“It will be acutely worse for the 6m people in the UK who are in severely insecure work and already face low pay and uncertain hours.”
The Money and Pensions Service propositions, insights and external engagement director Sarah Poretta said it was vital for more employers to respond positively to these findings.
She said: “By seeking ways to close the gap between their employees’ need for better financial wellbeing support in the workplace and employers’ perception of what these needs are.”
The report suggested a variety of ways in which employers can improve their wellbeing support and overtake other industries.
It emphasised a shift in thinking about pay with workers in the sector 13% less likely to have asked for a wage increase but about one in 10 (10%) more likely to say more hours or shifts would help them.
It recommended employers build their pay strategy around ‘new dynamics of pay. This included pay security where staff are working and earning enough to fulfil financial obligations short term.
The report also suggested pay autonomy meaning there is a choice about hours and pay cycle in order for them to live with dignity as well as pay potential – the total amount of compensation beyond their base salary.
Furthermore, the report recommended pay growth, where workers have opportunities to move up a pay grade and increase pay potential.
Wagesteam head of impact and inclusion Emily Trant outlined the main salary aspects team members are looking for.
She added: “Our latest State of Financial Wellbeing index highlights the two things hospitality workers want most – more predictable income and the ability to choose their own pay cycle.
“Every hospitality operator is in a war for talent and if they are serious about winning, these are the new dynamics of pay they should be building their people strategy around.
“By doing so, they will see a huge swing in recruitment, retention and shift uptake, which are key foundations for success in the current environment.