More high calibre managers are needed if hospitality businesses are to capitalise on the predicted future growth in the sector. Confronting perceptions of the industry offering low skilled employment, new research from People 1st reveals there are significant opportunities for high skilled workers with the creation of an additional 69,000 managerial posts by 2017.
The hospitality sector is one of the fastest growing in the economy, accounting for one in 14 UK jobs according to State of the Nation 2011 – the definitive snapshot of the labour market for hospitality, leisure, travel and tourism.1
Whilst the economic downturn has made it easier to recruit staff, businesses are still struggling to find high calibre managers.
“The difficulty of finding managers with the relevant management and leadership skills is becoming more acute,” states Martin-Christian Kent, director of research and policy and author of State of the Nation 2011. “The current trading conditions have intensified the need for managers to have a broad range of skills and, in recent years, the traditional pathways to become managers have been eroded making it more difficult to encourage people into the profession.”
Hospitality businesses in particular are consequently resorting to bridging the skills gap through hiring temporary staff or recruiting staff without the full range of skills required. Over a third of employers surveyed (35 percent) said that they recruit transient labour. Six out of ten employers (58 percent) admitted that the sector relies heavily on temporary workers, whilst 47 percent agreed that the level of reliance is far too high. Surprisingly, the survey found that far more high-end establishments than budget operations relied more on transient front-line staff (44 percent compared to 33 percent).
“Transient labour continues to costs the sector an estimated £33.4 million through constant recruitment and initial training,” says Brian Wisdom, chief executive of People 1st. “Whilst we recognise that transient labour gives businesses the flexibility to respond to fluctuating customer demand, this short-term approach contributes towards the poor image of the sector and limits productivity. The challenge is to learn from the State of the Nation research, and from examples of best practice amongst our employers. Together research and practical experience, will continue to inform and underpin the training programmes developed by People 1st to address the skills needs of the sector. Our vision is for a sector prepared and equipped to take advantage of the opportunities for economic growth.”
The report also found that:
· The sector has a major skills gap in customer service – People 1st aims to train 200,000 people ahead of the 2012 London Olympic and Paralympic Games.
· There is an acute shortage of managers – 69,000 additional managers will be needed by 2017.
· 39 percent of employers with skills gaps report that their managers do not possess the required skills – a significant increase of nine percent since 2007.
· The sector is attractive for business start-ups – 21,580 in 2009. However, few businesses are taking advantage of what is available. 56 percent of small businesses did not receive any support before setting up their company whilst 41 percent felt that their business would have benefited from some advice, mainly around finance.
· Despite economic difficulties, the sector’s proportional contribution to the UK’s economy has increased from 4.5 percent to 4.9 percent, accounting for £42,248 million. The gambling industry is by far the most profitable generating £121.44 per hour worked. Travel services generate £102.74 per hour, followed by pubs, bars and nightclubs at £80.89.
· The size of the workforce has also increased over the past year to 2.1 million – one in 14 UK jobs and 7.2 percent of the total working population.
· Applications for hospitality posts averaged 18 per job posted, increasing from 16 in quarter two of 2009 and 15 to quarter two of 2010.
Martin-Christian Kent believes that the issues raised in the report will persist unless the sector collectively adheres to its long-term commitments. “We urgently need to attract and retain skilled workers to the sector and increase the effectiveness of employers’ investment in training. People 1st believes that a new collaborative approach to address the systematic challenges of the hospitality sector is essential. A Hospitality Guild that is currently being established by People 1st in England should provide a strengthened and simplified focal point for industry bodies and businesses to achieve these aims.”