Why is their a staff shortage, what can you do and how much will it cost you?

Watch our video or read the article below to understand why there is currently a staff shortage in the Restaurant industry, what you can do and how much it will cost you.

Covid has changed life for many of us, our favourite restaurants have been through a difficult time forced to close and reopen and adopt a new business model basically changing the industry on the whole! Well it was great news for restaurants when they were able to open their doors in May and finally welcome customers back inside. Unfortunately, you may not have expected new challenge...Staff shortage!

Demand for staff in the UK is now back above pre-pandemic levels which you would usually think is GREAT NEWS right? however many Restaurants are struggling to find staff to keep up with the customer demand. Lets explore some of the reasons to why this may be...

Furlough Scheme

So lets talk about the first hurdle.. the Furlough Scheme..

The government incentivised employers to keep their staff through the furlough scheme, where employers could be reimbursed for their employees wages. The idea was to retain staff and keep unemployment levels steady as the country went through this major pandemic causing the national lockdown.

The furlough scheme was a great help to many businesses but the Restaurant industry also faced many other challenges which led to big and small names being shut down for good.

As these businesses were shut down, staff were laid of and many have looked for either alternative work or returned back home (more on this topic below)

With alternative work available with better pay, less pressure and better hours, the Restaurant industry is becoming less attractive to get back into. This is one of the key reasons to why there is a staff shortage in the Restaurant industry.


The second hurdle is Brexit...

The pandemic has understand left many EU Nationals in a vulnerable situation and many have joined their families back home especially during such uncertain times.

However with the UK having left the EU on the 31st Jan 2020, this has made it more difficult for EU workers to now return back to Britain to work in the Restaurant industry.

Here is an interesting statistics for you…

According to the findings of one of the big accounting firms, there are nearly 3 million people in the hospitality sector of which nearly 25% of them are EU nationals. Can you believe that? That is is 1 out 4 workers who are EU Nationals.

According to their report, the UK could see a shortage of nearly 1 million staff by 2029! Honestly, that’s crazy to even think about it!

Although there are groups lobbying on behalf of the industry to ease the rules for EU Nationals, the UK industry currently faces a huge shortage and especially with a low take of apprenticeships and high dropout rate of young people training in this industry.


The 3rd hurdle restaurants are facing is inflation...

During the pandemic, many people have been forced to stay home and so people are spending less money and saving more money. Now that restrictions are easing, people are ready to go out and start spending all them savings, which is great right? Well.. This kind of demand drives prices up, and the bank of England measures this increase through something called inflation.

Basically, if the demand of goods and services goes up, so will the prices. If prices go up, so will the cost of living. If the cost of living goes up, staff will also demand higher wages to keep up with the cost of living.

The Bank of England tried to control inflation because to little or too much inflation can be bad for the economy. The Office of National Statistics publishes their findings on the changes of inflation every month and they did report a small rise in inflation for April 202, but this is still within the Bank of England target rate of 2%. However If we look at America, the rate of inflation is rapidly rising in the hospitality industry meaning big companies like McDonalds are having to increase wages for staff just to keep up with inflation.

Low pay is already a problem within the industry, and as Restaurant owners you must be aware of the impacts of inflation on your cost of ingredients, menu pricing but also the cost of labour if you are to keep attracting the right talent.

So what can you do about it and what will it cost you?

Whilst many business owners are struggling with this new challenge, we are seeing many others investing in new ideas to either retain their current staff or attract new staff. An example of this is to provide better training to staff in order to make them more productive and efficient. As pointed out earlier on in the article, the UK is already seeing a low take up of apprenticeships and a high dropout rate of youth within the industry.

You can also provide better incentives such as lower hours or discounts to staff. As Restaurant Accounting specialists, we work closely with you to help identify your costs of implementing this new ideas and how this can impact on the net profit of your business.

You may look at hiring new staff by advertising better pay. Whilst offering better pay may be a good idea to attract new talent, we find many businesses are still not factoring in the cost of employers national insurance, which is a costly mistake.

You may look to tackle the issue of staff shortage by reducing your menu sizes or opening up for fewer hours, all strategies which will have a cost associated to them, one which we work out and discuss the best strategy for your business.

What are you doing to tackle this challenge? leave your comment below or feel free to get in touch and let us know your thoughts, we would be interested to know. If you found this article useful, please hit the like button and if you haven't already, subscribe to your YouTube channel so we can notify you every time we upload a video which has been designed to help the Restaurant community.

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