Sector labour shortages 48% higher than pre-pandemic

24-Apr-2023 - Last updated on 24-Apr-2023 at 10:12 GMT

Jobs must be filled: getting older people back into the sector is being looked at by the Government (credit: Getty/Hispanolistic)

Labour shortages in hospitality are 48% higher than before Covid and are snubbing out the sector’s potential, according to UKHospitality.

UKHospitality chief executive Kate Nicholls has welcomed comments from the BEIS select committee’s report on Post-Pandemic Economic Growth: UK Labour Markets, and said it is “absolutely right” to highlight labour market challenges are restricting economic growth in the UK.

“Nowhere is that more keenly felt than in hospitality, where we have a proven track record of generating growth but are currently being held back by damaging labour shortages,” Nicholls said.

“Enormous vacancies, 48% higher than pre-pandemic levels, are forcing venues to reduce opening hours or even days, curtailing our huge potential.”

Older people critical

She continued: “As the committee’s report notes, retaining older workers is absolutely crucial to a thriving workforce and hospitality’s flexible work patterns are well suited to accommodating those needs.

“That’s why we launched an over-50s guide for businesses and continue to advocate for Government to extend the apprentice NIC (national insurance contributions) benefit to the over-25s.

“We absolutely agree policy development on skills and labour markets is best done in partnership with businesses and we stand ready to assist the Government on tackling ongoing labour shortages and filling crucial vacancies.”

The Government report stated: “The UK’s labour market is currently unusually tight, with more than one million job vacancies across the country. The employment rate in early 2020 was 76.6% – the highest rate since records began in 1971 – and rates of unemployment (3.7%) are close to their lowest levels.”

UK-only issue

It continued: “But rates of economic inactivity have risen and the UK is the only country in the developed world where people have continued dropping out of the labour market in greater numbers beyond the acute phase of the Covid-19 pandemic.

“While the UK no longer benefits from the free movement of workers from the European Union, the Government expects net migration to return to pre-pandemic levels. The Office for Budget Responsibility’s latest fiscal outlook projects higher levels of net migration than previously anticipated, expecting it to stabilise at 245,000 a year from 2026–27 onwards.”

Among its conclusions, the report has called for the establishment of a Ministry for Labour and to “succeed in retaining or re-integrating people aged over 50 in the workforce, there needs to be a better understanding of what that age cohort wants from work”.

A response from the Government is due by 21 June 2023.