In response to the Treasury’s productivity plan released last week, People 1st has launched a new campaign to tackle the low productivity that threatens the sector. It specifically wants to hear from employers on what works best to aid retention and how the industry can collaborate to find solutions.
Per employee, the hospitality and tourism workforce contributes only £21,600 to the industry, 53% lower than an employee in retail at £46,000, 39% lower than someone working in construction at £35,000 and 58% lower than a manufacturing worker at £52,000.
The new People 1st report explores the productivity issues facing the sector. It calculates that 993,000 new staff are needed by 2022, with the vast majority, 870,000, needed to replace existing employees.
The report claims that the ‘revolving door’ of staff creates skills gaps, with over two-thirds of restaurants and hotels (68%) not having a full complement of staff. As a result, the sector’s annual contribution to UK productivity is significantly less than comparable sectors at £46.5 billion due to the skills gaps created by the high turnover.
The opportunity identified by the report lies in tackling this, as an improvement of just 1% in productivity would drive an additional £1.43 billion revenue to the industry.
Simon Tarr, managing director of People 1st, said: ““The causes of low productivity are complex and diverse. It is clear that parts of our industry are trapped in a revolving door of high turnover, increased skills gaps, and reliance on resorting to further transitional, non-permanent staff, to plug those gaps. We believe diversifying recruitment to include older workers and maternity returners as well as putting in place strategies to reduce turnover with a greater focus on career progression, will have a positive impact on productivity.”
“However, we want to tackle this challenge in collaboration with the industry, and are keen to share the best practice of those who know the industry best. That’s why we are launching a consultation today to gather the views of employers to reveal how to tackle this together, head on. The good news is that even incremental improvements can lead to substantial benefits to business and indeed the nation in terms of increased productivity.”
The ‘Skills and Productivity Problem’ report urges employees to improve their staff retention by offering more development opportunities for staff, employing apprentices and recruiting more maternity returners and older workers in the sector.
Louise Smalley, group HR director of Whitbread, owner of Costa and several restaurant chains, said: “Our sector has a great opportunity to rise to this productivity challenge. At Whitbread we’ve seen first-hand that making our team members aware of where skills and qualifications can take them makes a tangible difference to motivation, productivity and retention.”
To read the full 20 page report, see attached below
