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13th March 2023

Survey shows rising wage bills causing pressure on hospitality businesses

Written by: Edward Waddell
Labour shortages at Britain’s hospitality groups may be starting to ease but the 2023 Business Leaders’ Survey from CGA by NIQ and Fourth shows rising wage bills are piling more pressure on some fragile businesses.

The survey shows one in 11 roles (9%) are currently vacant and open for application, marking a drop of two percentage points since the last survey of leaders in October 2022. The rate of churn (the proportion of staff leaving a business in the last three months) has meanwhile dropped by three percentage points to 16%.

Sebastien Sepierre, managing director – EMEA, Fourth, said: “While the pressures related to labour shortages might be starting to ease, it is apparent that workforce related challenges are very much continuing to keep operators awake at night. The fact that only a third of business leaders feel confident about recruitment right now, indicates the importance of retaining existing members of staff and keeping them motivated.

“Technology plays a pivotal supporting role here, helping businesses to forecast demand as accurately as possible, enabling them to optimise their workforce planning so they are best placed to combat the issues present during this challenging period. This, in turn, makes it easier for businesses to hire, onboard, engage and retain team members, helping them to operate as effectively and efficiently as possible.”

Attracting and keeping staff has also come at a ‘significant cost’, with hospitality businesses raising their pay by 12% and 11% for new and existing staff respectively in the last 12 months.

Karl Chessell, CGA’s director - hospitality operators and food, EMEA, added: “It is encouraging to see that hospitality’s hard work on recruitment and retention is starting to pay dividends. However, with thousands of jobs still vacant, wages rising sharply and the cost of living crisis hitting consumer spending, there is no room for complacency. Hospitality is one of the UK’s most dynamic industries for job creation and it can kickstart the economic recovery, but first it needs targeted government support on labour shortages and cost challenges.”