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BHA round-up: Don't let job creation be at the expense of job remuneration

03 June 2016
BHA round-up: Don't let job creation be at the expense of job remuneration

The British Hospitality Association's new employment policy advisor, John Guthrie, explores the two pressing issues at the top of his to-do list: the National Living Wage and the Apprenticeship Levy

As a policy, the National Living Wage (NLW) is a leap in the dark. That's because the Low Pay Commission, when setting rates for the NLW, took the impact on jobs as its main concern. But no-one can be absolutely sure of the impact it will have on job creation.

But the NLW is being set to be 60% of median earnings by 2020 - a little over £9 per hour on current data.

Recent studies by the Resolution Foundation and the Social Market Foundation have shown the greatest impact of the NLW to be on the hospitality sector, and the BHA is concerned that the 'job creation power' of the industry will be hit.

My background is in HR, mainly in licensed retailing and international hotel groups. I've also worked a lot with Ufi Ibrahim, the BHA's chief executive, over the last six years, and the work that her organisation is doing on economic research with Oxford Economics has been of critical importance to the sector.

The BHA's latest research, which was published in September 2015, shows that not only is hospitality one of the biggest by number of employees in the UK at 14% of total employment, it also represents one tenth of gross value added to the country's GDP. It supports 4.6 million jobs, of which 2.9 million are directly employed by the hospitality sector.

Hospitality and tourism is of central importance for job creation in Britain and businesses' profitability, and the success of the industry is dependent on its employees.

The BHA is concerned about anything that might threaten the delicate balance between paying employees a decent wage and the effect this might have on recruitment.

Another area that will be the focus of my attention, and that of many BHA members, is the new Apprenticeship Levy, which is due to come into force next April for companies with wage bills above £3m a year.

The BHA - along with other leading employers' groups, including the CBI and the EEF - is concerned about how the levy will work. Details are being drip-fed, month by month, as government officials try to put some flesh on the bones of a policy that was, in our opinion, announced very hastily with too little thought.

The Big Hospitality Conversation, which the BHA launched in 2014, has successfully brought young jobseekers into contact with employers, and pledges of over 60,000 apprenticeships, work experience placements and jobs for young people have been made. This programme achieved its targets and shows the government the power of our industry as an employment and economic driver that stretches into every part of the country.

We are pleased to see that a new employer-led body will set apprenticeship standards and ensure quality, but it's important to remember the hospitality industry has already made a lot of progress in developing apprenticeship standards.

We look forward to seeing more details to help us understand better exactly how it will work and in the meantime, we'll plan how our industry can work together with government to protect and promote growth and jobs.

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