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An MCG Worth of Vacancies - The Hospitality Supply & Demand Issue

An MCG Worth of Vacancies - The Hospitality Supply & Demand Issue

by Luke Butler

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Luke Butler is Managing Director of Hastings People – the leading recruitment company in hospitality and aligned industries.

The Hastings team of 20 consultants are steeped in the workings of the hospitality industry. With offices in Sydney, Melbourne and Brisbane, we have an excellent oversight of what is happening in the national talent market.

On average, we engage with around 800 hospitality workers every week. Our focus is on understanding what motivates them.

A background in the industry

Before I started Hastings, I spent 20 years working in hospitality, starting as a glassie at the illustrious Berry Street Tavern in North Sydney for those who can remember that venue.

After that I progressed through to senior group roles with Keystone, Open Door Pub co and Urban Purveyor Group, before deciding to open this business.

The reason I share this background is to provide context to this article. I speak both as an operator and someone working in recruitment, so the information provided, is derived from the sum of my experience.

The Supply/Demand tug-of-war

Through my work, I take part in a lot of events at which the talent topic is front and centre. I often find the discussions to be the same yet rarely does the conversation focus on the root cause, let alone a solution to the issue.

Understanding the reality of the challenge in front of us is very important If you break it down, there is a clear solution to the issue.

We need more people entering the sector and we need those people to stay.

The common view is that it’s actually a simple supply and demand issue. There is a huge demand for workers in the industry i.e. lots of jobs available, however we lack talent supply – there are not enough people to fill the roles.

This exists across the industry We all hoped that lifting international borders would fix this, the reality is it won’t.

The talent issue is global. Nearly every major hospitality market in the world is experiencing the same issue, so waiting for an influx of foreign workers or some other form of supply is not an option.

An MCG worth of vacancies

There are now over 95,000 open roles (that we know about) in the national hospitality sector. That is enough people to fill the MCG! And we are still not out of the pandemic.

The Accommodation sector is still re-opening and conferencing hasn’t hit full swing, so you can imagine the demand that is building for chefs, managers and floor staff!

To find a way out, I believe we need to shift the paradigm. If it’s a supply and demand issue, let’s shift the focus to improving demand rather than waiting for supply.

The pandemic hasn’t impacted supply, but it has definitely reduced demand for work in the sector. I believe this shift in thinking will compel a more proactive response in that we can actively drive demand.

Just waiting for supply to improve is passive. So, we need to create a heightened motivation for people to explore hospitality as a career option. How?

Herein lies a more complex challenge and in lieu of unified approach, it is one individual businesses need to overcome.

What has reduced demand?

We really need to understand what’s causing demand to be so low. These answers are based on direct feedback from talent.

First, there is a perceived lack of professionalism in the sector.

Unfortunately, the industry has a reputational problem to overcome. It has long been considered a second-tier profession and this is exacerbated by the way some staff are treated.

We know the industry has many highly professional operators, but they are all dragged down by those individuals who choose not to treat their staff well.

Furthermore, the broad labour shortage means workers are presented with significantly more options in industries that are considered to be more acceptable.

All sectors are desperate for staff, so competition on all levels is fierce.

Weekend work and late nights are another problem. It’s hard to do anything about this but it is a significant inhibitor when it comes to driving demand.

Post lockdowns, there is a heightened focus on finding time to spend with friends and family and prioritising this above work. Late nights present another issue that can’t be changed but it does need to be acknowledged.

These factors are not just limiting supply, they are also pushing hospitality professionals away from the sector.

Wage theft is an ugly topic but unfortunately, there is a perception that this industry can be one that “rips you off.” True or not, there have been enough high-profile cases reported widely in the media over the last 5 years that it has had an impact.

For many, it remains a reality that working more hours than contracted is a regular occurrence and despite the best efforts of many operators, the stigma remains.

Even in instances when the hours are compliant, the work is viewed as hard graft.

Shifts range from 8-12 hours, most of which are spent on your feet and for many, there are easier ways to make money. Again, they look at different industries.

How much will I earn?

The hospitality sector is still viewed as a low pay environment –

it ranks as one of the lowest in most reports. But the facts are, this isn’t the case – particularly in this market – still the perception remains. This is particularly relevant right now as focus on the cost of living, inflation and housing affordability continue to dominate our lives.

So, what do we do?

If we are to help create an environment where there is more demand, we need to counteract these challenges. We need to drive positive change. This is a real opportunity for the industry to build back better.

That’s why I decided to share some rather than processes, with the intent of triggering business-specific actions that will help individual operators solve the problem.

The first idea is to Treat Staff Like Customers

In HR circles, there has been a long running debate over who is more important to a business, staff or customers.

In this market I believe it is the former and if you put that idea into practice, it would then make sense to invest more time in defining your offer for talent. We spend plenty of time and money coming up with concepts, offers and activities designed to attract and retain customers. Why don’t we do the same for our talent?

Why are loyalty programs more often than not just for customers? Why don’t we have promotions or incentives that are implemented to get more staff through the door?

Are you talking loud and proud about your Employee Value Proposition (EVP)? Have you clarified why an employee should choose you over a competitor in the same way you would encourage a customer to choose you?

The accommodation sector has been fast out of the gates with these activities and it is really working for them.

Are your existing staff members acting like ‘promoters’ for your business? Are you offering them incentives for bringing staff to your business?

Another idea is to behave like it’s lockdown 1.0 all the time.

Remember that shift back when everything closed and there was a hive of activity designed to help staff? There were free meals, food packs, team zoom sessions, cocktails classes and staff groups on WhatsApp to check in on people.

How can we continue this activity? It was designed to care for staff and while our reality is now different, we can still be a sector that looks to support and care for our people.

Another idea is to consider that the most important people in the industry are those doing inductions into our businesses.

If the sector is to create demand for jobs, we need to ensure that young talent have a great experience from day one. A focus on how we foster young talent is imperative to ensure that they stay committed to the industry long term.

The businesses that utilise a highly structured and formal approach to onboarding staff are having a far better time than those who don’t. It can’t be left up to ‘whoever is available on the day’. It must be a process that is consistent.

It is about creating value about being a part of the industry. If a trainer doesn’t appear to respect and honour the process of induction, why would a new staff member value their job? Creating demand is about creating value and this is a strong step towards that.

Another way to improve demand is to identify additional ways to remunerate staff, outside of just lifting salaries.

What benefits can you offer your staff that improve their lives on a broader level?

Benefits within corporate environments can be extensive including internal incentives like meals and drinks, extending to health insurance, gym memberships, wellness, education and training programs.

There are tech solutions like Perkbox as an example that can make the process far less manual and more effective.

Beyond that, the tried and tested procedures like reward and recognition programs have a real impact if applied consistently.

None of this is new, but the businesses that actively apply these processes reap the rewards. If we can increase the number of hospitality businesses implementing this activity, demand for jobs will increase.

Find a way to offer flexibility

Now this is arguably the most difficult idea to apply but the most important to tackle.

Work life balance is incredibly attractive for workers in this market and is a key inhibitor to creating demand amongst talent in the sector.

More often than not employees will take a lower salary in exchange for more flexibility so there is a cost saving to be made if you can identify a way to offer flexibility. Time is a highly valuable currency in this market.

Obviously working from home is impossible in customer facing roles, but there are other options if you are willing to find a way.

You can identify tasks that can be done at home and apply an allocation of time to them

  • Rosters

  • Ordering

  • Reporting

  • Invoicing

  • You might think this is unrealistic but there are many businesses already employing this approach.

4-day work weeks are becoming far more common and if structured well, the cost implications can be negligible, particularly when you calculate the reduction in staff turnover. It costs a lot to hire people, so factor that into your thinking.

Rotating night and weekend rosters so that manager and chefs have the ability to enjoy some respite. This is obvious stuff that I know many consider, but again, it is the actual practice of it that will have an impact.

Apply a genuine focus to capped hours and rigorously do the ‘BOOT’ or Better off overall Test. This simple act will give you a competitive advantage over a huge percentage of the market.

The final idea is really a simple one – Change.

If you’re still doing what you were doing even 3 months ago let alone a year or two years ago, then I would suggest that you have not appropriately adapted to the market Employees have very different expectations now, compared to December last year, so we need to adapt or the pain will continue.

Move fast because your employees are. They are making quick decisions about who they will work for.

Accor Hotels recently adopted a Same Day Hire policy for a large number of roles, in order to adapt to the pace at which applicants move. If a global hotel brand can do this, then surely we can.

In summary, there is a common message to all of this. If collectively, as an industry, we all keep our focus on the happiness of our people at the top of the agenda, the staffing challenge will dissipate over time.

There is no immediate fix and there is certainly no involuntary one. Those who adopt and take action now will emerge as leaders in the sector and attract quality talent, even in this market.