The Scottish Hospitality Group (SHG) is warning that the ending of furlough in five weeks will not fully address the staffing crisis facing hospitality and many other sectors, and is urging Westminster to work with the three devolved nations and introduce a migrant visa scheme to provide employers with access to workers.
It says that hospitality businesses are facing a 20% increase in wage costs due to a shortage of staff. A mid-level chef might now expect to earn £30,000 a year, and a server around £25,000 (based on a 45-hour week). In all cases, the need to recruit new staff at higher rates has an inflationary effect across the board as existing staff are brought to the same level.
SHG spokesperson Stephen Montgomery said, “Operators can’t get staff, wage inflation is rampant and all the supply chain problems are combining to act as a brake on our economic recovery. We should expect to see more people looking for work once furlough ends but it will be too little, too late. The reality is that we need temporary 1- or 2-year visas for EU workers to make sure all businesses can recruit the right talent.
“Furlough has done its job and needs to end but we still need help as we head into winter. There’s a real lack of confidence because hospitality has been the first to close and last to reopen, and people quite rightly don’t want to be responsible for implementing government rules that don’t make any sense. So that’s had the effect of pointing people towards other sectors.”
SHG says the lack of recruits is preventing businesses from opening to capacity and beginning the long process of lockdown recovery, with venues having to shut early or restrict their numbers, crippling the sector’s ability to reclaim lost revenue over two summers and one Christmas.
Nic Wood (pictured), owner of The Signature Pub Group which operates 21 venues mostly in Edinburgh and Glasgow, added, “It is incredibly frustrating that after all we’ve been through that we can’t get enough staff to open up our venues to their full capacity or hours.
“The issues of furlough, lack of staff and supply chain complications are jeopardising hospitality’s ability to try and scrabble back to pre-Covid trade levels. We need a visa scheme to plug the employment void that has appeared since Brexit. It’s imperative that the four nations work together to encourage people into the country that want to do these jobs so that the economy has enough staff to get back to pre-Covid levels.”
After the turmoil of last 18 months licensees’ drinks deliveries are arriving late or getting cancelled because of supplier issues caused by a shortage of drivers, a scarcity of warehouse workers and no end in sight thanks to strike action planned by draymen this month and next.
The Unite Union has said they lost up to £10,000 in a year due to furlough and lack of overtime — with no pay increase for 2020, so strike action is planned for the 24th and 25th August and the 2nd and 3rd September.
Gavin Stevenson, owner of the Mor-Rioghain Group, which owns Gellions and Monty’s in Inverness and the Mains of Scotstown in Aberdeen told DRAM, “We had our delivery cancelled by Star Bars/Heineken on the first Friday of full trading after Level 0 ended, and we only had notice about it on the Thursday after 4pm.
“This was despite contacting our BDM several times during the week to check our delivery status and advising them that for such a big order we’d need plenty of advance notice if there were to be issues. As it was we were able to source beer from elsewhere, but this involved some frantic last minute sourcing of product, and then an all night work shift for a team of drivers moving stock from over 100 miles away. “
Gavin says this is unacceptable at a critical time when small businesses are attempting to get back on their feet and is putting their long-term survival at risk.
“It’s completely unacceptable that beleaguered pubs are facing these issues now in the first couple of weeks of viable trading after 18 months of Covid losses. The disruption and stress caused by the breweries lack of ability to contingency-plan is putting small Scottish businesses at risk, and given the vast resources of the big multi-national companies involved, such total failure to ensure adequate supply is inexcusable.”
Stephen Montgomery, spokesperson of the Scottish Hospitality Group, says the situation is throwing planning up in the air and adding to stress levels at what is already a stressful time.
“This is affecting everybody. Nobody can plan. That’s the issue here. I put in an order for delivery on Friday and it never showed. Luckily, my rep had bunkered some kegs so we got some on Friday night, but I had to go scrambling around for spirits and wine to get stock for the weekend. Then my wine order arrived on Saturday morning, so I ended up with double stock. “
Stephen says that this is the last thing that the trade needs after being closed for the last 18 months, with no end in sight because of the planned strike action by draymen.
He said, “It’s the panic of not knowing. It’s adding to our stress levels that have already and with four days of strike action ahead, we’re treading water and have this to contend with on top of interview no-shows in a massive staff shortage and staff resigning, staff self isolating, HMRC banging on the door looking for money, and the threat of closure, this is the last thing we need.”
And the problem is made even worse for pubs that are tied and Gavin Stevenson is calling for urgent action to resolve the issue.
“Worse still, where pubs are tied, no alternative arrangements are being agreed in advance of the delivery actually being cancelled at the last minute, leaving publicans scrambling to find supply with little or no notice and often being unable to do so.
“It is imperative that the pub companies and breweries now get their act together and resolve these delivery issues, and also communicate with customers much further in advance if deliveries are to be disrupted.”
The Scottish Hospitality Group has proposed a new process to guide businesses struggling to cope with the ‘pingdemic’ forcing thousands of workers into self-isolation. Companies are being left in limbo unsure what to do about staff who have not been ‘pinged’ themselves but may be close contacts of those who were.
The recommended approach could avoid businesses having to close unnecessarily. It has shared the process with Westminster and Holyrood governments and is urging them to consider using it as official guidance to help bosses manage the staffing crisis affecting multiple sectors and which is threatening the UK’s economic recovery from the pandemic.
In line with many other business organisations in recent days, the Scottish Hospitality Group has warned that a number of operators are being forced to close temporarily because of the delays and confusion generated by Scotland’s Test & Protect system. A straw poll among hospitality firms by SHG found that businesses are having to spend around 40% of their lost revenue to close and reopen – meaning that a £10,000 bill becomes £14,000.
The process is a practical flowchart that bosses can follow to assess the risk to staff while waiting for test results from colleagues with symptoms. It categorises staff as no risk, definite risk and potential risk based on a series of prompts, such as vaccination history, if they have had covid and how closely they work with others. It then provides recommend actions for each category.
SHG spokesperson Stephen Montgomery said, “Business owners want to do the right thing by their staff and the public, so the lack of clear, consistent guidance from both governments is really frustrating. The fact that we need to make decisions which affect our businesses, the health and safety of our staff and customers, means we can’t afford to sit back and wait for Test & Protect to get in touch.
“This is something that Holyrood and Westminster must take seriously ahead of restrictions easing further. Our proposed process may not be perfect but it’s better than the vacuum we have just now and it would allow everyone to make sensible decisions that balance jobs and health.”
“As an industry, of course we agree with the principle of testing and tracing to stop transmission, but ultimately it has to be underpinned by a robust system that actually works. This, coupled with the staffing crisis in hospitality, is just another push into business closure, especially now that businesses are being asked to contribute 10% towards furloughed employees’ unworked wages.”