Recent government policy is a big driver here. The National Living Wage’s (NLW) introduction back in April, followed by the apprenticeship levy, which is still expected to come into force next spring, will substantially increase costs for employers across the pub and casual dining sector.
While the NLW increases are fairly modest at the moment, the government wants it to rise to £9.00 per hour by 2020. That’s an average hourly rise of £2.50 per person across the pub industry in the next four years. Add an apprenticeship levy of 0.5% for all businesses with a payroll of £3m or above, and the costs start to mount up.
As the purse-strings get pulled tighter, improving productivity will be critical.
Addressing productivity levels is a bit like opening a black box. There are no quick wins, and what might work for one business won’t necessarily work for another. Here are seven key areas to consider:
- Job design: in other words, how a job is being undertaken. Can additional responsibilities be added? Could greater multi-skilling reduce the number of roles?
- Technology: to what extent can technology change current tasks and job roles? Can it add value to the customer experience and, if so, how much extra can be charged to customers?
- Staff skills: are staff fully skilled and competent? This has an impact on training and retention. A People 1st report last year showed a high percentage of the hospitality and tourism workforce is not fully competent, owing to poor staff retention.
- Managers’ skills: are managers fully-skilled? Can they optimise business results?
- Staff utilisation: are staff being rostered effectively to meet changing customer patterns?
- Skills utilisation: linked to management skills – are staff skills being fully maximised in the business?
- Staff engagement: are staff fully engaged in the business? Are they staying with the business long enough to provide a return?
These factors all interlink with one another, so it’s important to look at them in the context of your overall business objectives and decide how they fit within your people strategy.
One solution that covers a number of these factors is apprenticeships. Not only can they be used to develop staff’s skills at all levels – chef apprenticeships, for example, go up to level 4 – but 80% of companies who invest in apprentices report an increase in staff retention. In addition, each hospitality apprentice can add £5,200 to your bottom line.
Seven brand new, employer-led apprenticeship standards for the hospitality industry are about to be launched (in fact, two are already live) and, with the levy approaching, the incentive to offer them has never been greater. Large employers can only reclaim their levy money by investing in apprenticeships, while non-levy paying companies will receive a government contribution to help them employ apprentices. It’s anticipated that the government contribution will be 90% of an apprenticeship and the employer will contribute the remaining 10%, but this is yet to be confirmed.
In tomorrow’s final article, I’ll be exploring these new apprenticeship standards, why they have the potential to help the pub industry close its skills gaps, and how we’re working with the industry to ensure they meet its business needs.
About People 1st
People 1st is the leading workforce development expert for the hospitality, passenger transport, travel, tourism and retail industries. Our specialist products and services help businesses develop their employees’ skills and expertise, so they can improve retention, productivity and profitability. For more information, visit www.people1st.co.uk