How to address the worsening labour shortage in the hospitality industry?

The high number of vacancies is leading to difficulties in retaining staff, with the shortage causing higher workloads for those still employed in hospitality and therefore many are pushing to leave.

Factors such as low pay, long hours and stressful environments, that are not required in other industries, are amongst those that are making the hospitality industry a less attractive career choice. Whilst labour shortages in the hospitality industry pre-date recent issues, Brexit and Covid-19 have seen the issue worsen in the last two years.

Hospitality organisations are having to re-think their hiring processes, with the government encouraging a move towards a high-wage, high-skilled workforce and away from immigration as a source of employees. They are also having to provide incentives for both prospective and current staff, most frequently through pay increases.

As labour shortage continues into 2022, what can procurement do to mitigate its impact?

The Lightspeed 2021 Global State of Hospitality Report suggests that technology will support or replace some staff functions, helping the sector to get back on their feet. In addition, 94 per cent of those involved in CGA and Fourth's Business Confidence survey found that technology had been useful since the re-opening.

A robust procurement function could save time on administrative tasks through actions such as reducing the number of orders placed in a week, whilst stronger processes and additional technology can also provide support in the event of employee shortages or churn, as these remain in place throughout these changes.

Growing talent from within has been identified as a way forward during the labour shortage in the industry, and career development has proven to be an important incentive for prospective employees. As a result, companies are being encouraged to invest in their employees' development to aid retention, which can be achieved through improved training plans or partnerships with training providers.

Research suggests that three in four businesses plan to pass on the price increases to their customers, calling for an opportunity to review pricing and margin to ensure competitiveness within the industry. At 4C Associates we help businesses to identify their needs and the most cost-effective options, which can help join up functions across the business and streamline routine tasks that keep staff from focusing on the most important parts of their roles.

In the face of increased business costs due to ongoing supply chain issues, it's critical to review supply chains to ensure there is a partnership with the right suppliers best placed to provide the service levels required, at the best pricing. Reviewing a company's operating costs or working on optimising their supply chain could also help mitigate the impact of labour shortages and higher costs across the business.

During ongoing staff shortages and supply chain issues, now is the time to ensure operational processes are robust enough and working for the business through the mapping and reviews of end-to-end supply chain processes and implementation of changes to support both, employees and customers.

By Gavin Bowen-Ashwin and Jonathan Williams