Reliance on temporary staff damaging recruitment of managers in hospitality

7th September 2011, 3:02pm

Over-reliance on temporary staff to fill critical frontline vacancies is undermining the recruitment of managers and limiting the productivity of hospitality and tourism companies, a new industry report from People 1st reveals today.

Whilst the economic downturn has made it easier to recruit staff, businesses are still struggling to find high calibre managers.

Temporary recruitment continues to fuel greater disengagement and rising turnover amongst skilled staff, according to State of the Nation 2011.

Martin-Christian Kent, director of research and policy and author of State of the Nation 2011 said: "The difficulty of finding managers with the relevant management and leadership skills is becoming more acute. 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."

Businesses are consequently resorting to bridging the skills gap through hiring temporary staff or recruiting staff without the full range of skills sought.

Over a third of employers surveyed (35%) said that they recruit transient labour primarily for frontline roles such as bar and waiting staff, receptionists, counter assistants, croupiers and customer service staff. Six out of 10 employers (58%) admitted that the sector relies heavily on temporary workers, whilst 69% of hotels and 61% of restaurants 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% compared to 33%).

Brian Wisdom, chief executive of People 1st, said: "Transient labour costs the sector an estimated £33.4 million through constant recruitment and initial training," says. "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.

"There are other alternatives that businesses can consider such as offering flexible roles or recruiting female returners and older workers which significantly reduce staff costs and staff turnover without the loss of valuable skills and experience.

"Worryingly, with less than a year to go before the Olympic and Paralympic Games, employers are likely to turn to transient workers to overcome recruitment problems created by increased demand in the run up to, and during, the Games. This gives cause for concern as this short-term approach could well undermine the longer term aspiration and legacy of the Games for the sector."

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% of employers with skills gaps report that their managers do not possess the required skills – a significant increase of nine percent since 2007. The economic downturn has led to employers realising that their managers do not have the breadth of skills required for the business to compete effectively. In addition, some larger businesses have cut senior layers of management, placing more pressure on existing and less experienced managers.

• The sector is attractive for business start-ups – 21,580 in 2009 of which:
- 10,915 were restaurants
- 5,940 were pubs, bars and nightclubs
- 1,450 were food and service management businesses
- 870 were hotels

However, few businesses are taking advantage of what is available. 56% of small businesses surveyed did not receive any support before setting up their company whilst 41% 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% to 4.9%, accounting for £42,248 million. Whilst the restaurant industry makes the largest economic contribution, it is not as profitable per person as other hospitality industries. The gambling industry is by far the most profitable generating £121.44 per hour worked. Pubs, bars and nightclubs generate £80.89, hotels account for £67.81, restaurants £47.53 and food and service management businesses £41.61.

• The size of the workforce has also increased over the past year to 2.1 million – one in 14 UK jobs and 7.2% 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.

Related Articles:

• 05 Jul 2011 - People 1st and GoSkills merge to provide ‘strong voice for the industry’
• 22 Jun 2011 - Women must accept long hours and make sacrifices to get to the top in hospitality
• 21 Jun 2011 - Career boost for female staff in hospitality as Women 1st secures new funding for training
• 20 Jun 2011 - Majority of Brits agree that our customer service needs improving ahead of London 2012
• 06 Jan 2011 - UK businesses need to prepare now to maximise share of Olympic revenue
• 14 Jul 2010 - Useful facts from People 1st
• 14 May 2009 - Hospitality sector must prepare for recovery with training

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