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UK staff shortages drive pub and restaurant wages up 14%

·Business Reporter, Yahoo Finance UK
·3-min read
EDINBURGH, SCOTLAND - APRIL 26: A waitress serves members of the public drinks at the Three Sisters Pub in the Cowgate as lockdown measures are eased on April 26, 2021 in Edinburgh, United Kingdom. Cafes, beer gardens, non-essential shops and museums are reopening in Scotland today as lockdown easing continues. (Photo by Jeff J Mitchell/Getty Images)
Weekend workers are seeing the biggest benefits, with those shifts typically paying 9% more than pre-pandemic levels. Photo: Jeff J Mitchell/Getty Images

A shortage in the hospitality sector has driven up the average wage of pub and restaurant workers by as much as 14%, new research has revealed.

According to data from Indeed Flex, an online marketplace for flexible workers, the hiring crisis is causing businesses in the industry to turn to temporary staff to keep up with demand.

Weekend workers are seeing the biggest benefits, with those shifts typically paying 9% more than pre-pandemic levels. Meanwhile weekday pay rates have risen by an average of 5% across the UK, far exceeding the 1.8% rise in the minimum wage between 2019 and 2021.

Pay increases vary around the country, with Greater Manchester and Cheshire experiencing the biggest pay hikes, Indeed Flex said. Hourly rates for temporary workers in those areas have risen by 11.15% for weekday hospitality staff, and by 13.87% for weekend workers compared to May 2019.

Pay growth has been weakest in Merseyside, where hourly rates increased by just 0.84% on average, and in London, where they notched up by only 3.73%.

Average pay increase by region: Chart: Indeed Flex
Average pay increase by region: Chart: Indeed Flex

According to official employment data from the Office for National Statistics (ONS), the food services and accommodation sector recorded the biggest spike in vacancies, up 265.5%, of any industry in March as lockdown restrictions first began to ease.

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

“The combination of booming demand from customers and the table service-only rule means thousands of pubs and restaurants need more staff - and fast,” Jack Beaman, CEO and co-founder of Indeed Flex, said. “But with bottlenecks holding up the supply of workers, forward-thinking businesses are increasingly turning to temporary staff to fill shifts, and raising wages to woo the best people.”

He added: “We’ve also seen an influx of people opting for temporary work as a post-lockdown lifestyle choice - as it gives them a variety and a work-life balance that a permanent job cannot.

“Temporary workers offer hospitality businesses vital flexibility in the current uncertain trading environment in which customer demand is strong but margins are squeezed.”

Read more: UK restaurants struggle to recruit after Brexit and COVID double whammy

UK pubs and restaurants have blamed both the coronavirus pandemic and Brexit for staff shortages across the industry. The industry has urged the government to relax immigration rules to allow low-skilled workers from abroad to work in bars and restaurants across the country.

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 comes after a decision to postpone the full reopening of the UK economy on 21 June which put extra pressure on the hospitality industry.

Boris Johnson announced last week that ‘Freedom Day’ in England would be pushed back to at least 19 July as the Delta variant, which was first detected in India, continues to spread across the country.

Venues across the country are still having to social distance and provide table service only, requiring extra staff, as well as limiting the number of customers they can serve.

The hospitality industry is also likely to come under further pressure when the business rates holiday ends on 30 June.

Watch: What is inflation and why is it important?

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