Urgent need to make the hospitality sector a more hospitable place to work

03 July 2023

A new report from work and employment expert group ReWAGE calls for a radical overhaul of the hospitality sector to tackle crisis-level staff shortages. Recommendations include better pay, terms and conditions for employees (including the enforcement of tipping rights), legislation to reinforce employer duty-of-care responsibilities for workers travelling to and from work, and more flexibility to employ seasonal workers from within the EU and beyond.

The hospitality sector in the UK is big business – pre-Covid there were 3.2 million people employed in the industry, which produced £130 billion of economic activity and generated £39 billion in taxation for the UK Government.

It’s the third largest private sector employer in the UK, representing 10% of UK employment and it contributes significantly to making the UK an important destination for leisure and business. It is also one of the few industries that delivers jobs in every constituency in the UK.

However, it is a sector that is currently facing crisis-level staffing shortages – both in the UK and worldwide – and is widely recognised as offering precarious employment. That precariousness not only affects the livelihoods of the workforce – hospitality businesses, especially within the predominantly SME sub-sector (restaurants, cafes and similar), have high rates of start-up and closure, which contribute to levels of labour vulnerability and turnover that exceed many other UK industries.

A series of investigations at national and regional level over the past 25 years, led by government agencies and industry bodies have sought to address these issues and proposed remedies / pathways to resolution without discernible evidence of real progress or change.

ReWAGE’s report Work, wages and employment in the UK hospitality sector, considers the challenges currently being faced by the industry, such as the demographic and skills profile of its workforce, levels of pay, workplace conditions, job security, recruitment and retention and skills development, and recommends actions that would make hospitality a more attractive employment prospect and improve conditions for those already working in the sector.  

Report author, Professor Tom Baum (University of Strathclyde), said:

“Evidence points to a number of structural and institutional factors that have not shown significant change over the past 25 years. At the same time, the impact of Covid-19 and its aftermath has exacerbated a number of these issues (such as recruitment and retention) and created conditions where other factors are emerging in a way that the industry and its stakeholders needs to address – such as changing attitudes to work and demand for greater workplace flexibility.

“The challenge is to identify new ways to address these problems that can be adopted by all stakeholders and offer a sustainable basis for change. What policies and practical measures can a coalition of key stakeholders take to effect real change to employment in the hospitality sector to ensure a prosperous future for the industry and its workforce?

“Policy has a role to play in effecting change to work and working conditions in hospitality and enabling the private sector to meet its skills requirements. However, a significant responsibility also lies with the private sector, as employers and through competent industry bodies, to drive meaningful change in workplace practices and culture. Policy leadership across a wide range of direct and indirect areas combined with appropriate regulation can support and encourage the hospitality industry down a path of meaningful change.”

The report calls for:

  • Agencies at national and local levels to work alongside private sector interests to develop strategies and work with employers (particularly with small and micro-operations) to improve job quality – including pay, working time, training and career development opportunities, flexible working options and terms and conditions.
  • Financial incentives (direct grant, taxation-related etc.) to be made available to businesses to support a digital transition in capital and human resource terms.
  • UK immigration law to be amended as a short-term fix to enable hospitality employers to have greater flexibility in the recruitment of seasonal employees from within and beyond the EU.
  • A re-think on migration policy and workforce development to support the sustainable development of hospitality as a major employer in the UK economy.
  • The inclusion of employee voice as standard in all government-, agency- and industry-led forums tasked with addressing hospitality workforce / employment issues – especially as the hospitality has low levels of union density.
  • Local and regional enterprise development agencies to support, disseminate and promote best industry practice in hospitality employment.
  • Government agencies at local and national levels to address key infrastructure issues in a collaborative and cross-departmental way, particularly in the affordable local housing market[1] and in support for affordable public transport that facilitates employee travel, especially during unsocial hours.
  • Enforcement of tipping rights on behalf of employees that is resourced in a proactive way rather than being left to employees to take reactive measures.
  • Legislation to reinforce employer duty-of-care/health and safety responsibilities when workers are travelling to and from work and encouragement for employers to provide realistic transport options for their workforce.

The report was commissioned and funded by the abrdn Financial Fairness Trust. CEO of the Trust, Mubin Haq, said:

“Living standards for many people working in the hospitality sector are notoriously low; working conditions, poor pay and support for working unsociable hours all need to be addressed if the sector is to recruit and retain more people. With severe shortages in the labour market there is even greater urgency for government, employer bodies and employers to bring in much needed reforms.”

This ReWAGE publication was authored for ReWAGE by Professor Tom Baum (University of Strathclyde), Jeisson Cardenas Rubio (IER, University of Warwick) and Emma Congreve (Fraser of Allander Institute).

[1] As an example, see Edinburgh’s short-term lets control zone.

Read the report