Reliance on temporary staff costing hospitality sector £33.4 million a year

The State of the Nation report, released by People 1st, found that ‘transient labour’, often used to plug the gaps in the industry’s 23 per cent annual staff turnover, is also undermining recruitment of skilled managers to the hospitality sector.

“While the economic downturn has made it easier to recruit staff, businesses are still struggling to find high calibre managers,” People 1st said on releasing the report yesterday. “Temporary recruitment continues to fuel greater disengagement and rising turnover amongst skilled staff.”

Around 47 per cent of employers considered the industry’s reliance on temporary workers as ‘heavy’, while 58 per cent said they thought it was too high. Of these, 69 per cent of hotels and 61 per cent of restaurants said the reliance was too high.

Temporary staff were most likely to fill a front-line position, with 16 per cent of employers describing their front-line team as ‘mainly transient’.

The survey found that far more high-end establishments (44 per cent) than budget operations (33 per cent) relied more on transient front-line staff.

The report’s author, Martin-Christian Kent, said: “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.”

Researchers found that while the sector has a major skills gap in customer service - employers set to need 200,000 extra people ahead of the Olympic Games in 2012 – a worrying skills shortages exists at management level, with 69,000 additional skilled managers needed by 2017.

Crucially, 39 per cent of employers with skills gaps reported that their managers do not possess the required skills – a significant increase of nine per cent since 2007, the report said, adding that “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.”

Alternatives​

People 1st, which expressed concern that the situation could worsen as the Olympic Games approached, urged employers in the hospitality sector to consider other options, such as recruiting female returners and older workers, before employing temporary staff.

“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,” said Brian Wisdom, chief executive of People 1st.

“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.”

He added: “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.”

Despite recruitment concerns, however, the report also found that the size of the workforce in the hospitality, leisure and tourism sector has increased over the past year to 2.1 million - one in 14 UK jobs and 7.2 per cent of the total working population.

Applications for hospitality posts in the second quarter of 2011 averaged 18 per job posted, increasing from 16 in the second quarter 2009 and 15 in the second quarter of 2010.