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UK restaurants struggle to recruit after Brexit and COVID double whammy

A server carries a tray of drinks from a pub in the Grassmarket in Edinburgh, as beer gardens, non-essential shops, restaurants and cafes, along with swimming pools, libraries and museums in Scotland reopen today after lockdown restrictions have eased. Picture date: Monday April 26, 2021. (Photo by Andrew Milligan/PA Images via Getty Images)
A server carries a tray of drinks from a pub in the Grassmarket in Edinburgh. Photo: Andrew Milligan/PA Images via Getty Images

Britain's hospitality sector is struggling with staff shortages as it reopens, forcing pubs and restaurants to offer cash sweeteners to lure workers.

Last month, job postings in some parts of the hospitality industry rose 20% above pre-pandemic levels. Jack Kennedy, a UK economist at job listings website Indeed, said: "In some areas the number of candidates isn’t keeping up.”

UK pubs and restaurants have blamed both the coronavirus pandemic and Brexit for staff shortages across the industry. The problem has become particularly acute since indoor dining resumed last week as part of the next stage of Britain’s roadmap out of lockdown.

If staffing shortages continue, the jobs crisis could derail the hospitality sector's recovery from the pandemic. The industry is now urging the government to relax immigration rules to allow low-skilled workers from abroad to work in bars and restaurants across the country.

Staff at Loxley's Restaurant & Wine Bar take part in a new menu tasting and training before reopening on Monday 17th, as coronavirus disease (COVID-19) restrictions continue to ease, in Stratford Upon Avon, Britain, May 14, 2021. REUTERS/Andrew Boyers
Due to the difficulties with finding workers, many companies have resorted to creating incentives to help plug the shortage. Photo: REUTERS/Andrew Boyers

Helen Stephenson, the owner of Kedleston Country Club in Derbyshire, told Yahoo Finance UK people were steering away from hospitality jobs post-lockdown.

“Recruiting new staff has been extremely difficult for us,” she said. "I think people are frightened by being dependent on the hospitality industry because of how uncertain its future is."

Stephenson said she has struggled to recruit staff with relevant experience. The vast majority of replies to her job ads have been from school age teenagers who "don't have the experience or the flexibility to work more than just weekends.”

Read more: Restaurant and pub sales soar as UK economy reopens

“For more attentive positions, such as working alongside our kitchen chef, we have been involved with Derby College who are helping us seek apprentices who wish to learn the trade," she said. “Sadly, after a week of advertising, we have not yet received any applications."

Large national chains are feeling the pinch as well. Mitchells and Butlers (MAB.L), which owns the All Bar One and Harvester chains, said it was finding it difficult to recruit workers. The company said overseas staff were returning home and lockdown restrictions meant many staff were giving up on the sector. Mitchells and Butlers has lost 9,000 of its 39,000 employees since the start of the crisis.

“Some of the people who have left the sector want to come back, but won’t until they’re certain there isn’t going to be another lockdown," Mitchell and Butler's boss Phil Urban said on an earnings call. His business lost £200m last year.

Read more: Pubs says reopening sales are strong after dire six months

Rival pub chain Marston’s (MARS.L) has reported similar struggles recruiting and Pizza Express is currently looking for 1,000 staff, having laid off thousands less than a year ago.

“Everybody is recruiting," Urban said. "I’m still optimistic we will be covered and grow our own talent where we’re short, but there are those macro factors at play at the moment.”

Watch: Bars, restaurants reopen indoors across London

The most obvious macro factor is Brexit. Before Britain left the EU, more than 30% of hospitality workers across the UK were European. In London, the proportion was more than half. Brexit and the pandemic have meant many of those workers have returned to their home countries.

“It has been pretty hard to find people since Brexit, and now COVID,” Armonas, a restaurant manager at Mediterranean chain Haz in London, told Yahoo Finance UK. “This includes mainly waiting staff, bar staff and some management positions.” (Armonas only gave his first name.)

Kate Nicholls, chief executive of industry body UKHospitality, told the Sunday Times it was time for the government to review its "shortage occupations" list.

"We've also suggested an Australian-style coronavirus recovery visa for lower-skilled workers who don't meet the point-based system [but] who are crucial to the recovery," she said.

Some companies have resorted to incentives to help tackle the shortage. Examples include bonuses or gift vouchers for staff who recommend friends for jobs.

Steak chain Hawksmoor has told its employees they could earn up to £2,000 ($2,830) if they recruit friends to work at the chain's eight restaurants. Coffee shop Caravan is offering a £100 voucher to customers who make successful recommendations.

James Reed, founder of recruitment firm Reed, said the jobs pendulum had swung back in favour of workers.

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