State of the NatioN RePoRt 2013

yeuk2012

State of the NatioN RePoRt 2013

State of the NatioN

RePoRt 2013

An analysis of labour market trends, skills,

education and training within the UK hospitality

and tourism industries


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Contents

Foreword by Chief Executive .........................................................................4

Foreword by Chairman ..................................................................................5

Executive Summary ......................................................................................6

Chapter 1: Economic Contribution and Performance ................................10

Chapter 2: Workforce Size and Characteristics ..........................................22

Chapter 3: Recruitment and Retention .......................................................42

Chapter 4: Workforce Skills and Development ...........................................56

Chapter 5: Future Trends ............................................................................72

Special Report

The London 2012 Olympic and Paralympic Games ..................................86

All definitions and data sources are available online:

www.people1st.co.uk/sotnannex


4

Foreword

training and retention are the future

In previous State of the

Nation reports, we have

highlighted the hospitality and

tourism sector’s continued

growth in the face of difficult

economic conditions and the

opportunities to improve skills

within these industries. With

the sector growing at a faster

rate than other parts of the

economy, its relative importance increases both in terms

of stimulating enterprise and getting people into work.

We have also looked at where the industry needs to

focus its attention if it is to maximise the benefits and

opportunities such a positive landscape can deliver.

The constant need to adapt to changing conditions

and customer preferences both through services and

training has never been greater. We have achieved major

successes when it comes to implementing robust and

clear progression routes to address craft and technical

skills gaps, but there is clearly still more work to be done.

The issues of staff retention and providing management

and leadership training have been ongoing for many

years, and ensuring staff are nurtured and offered the

right kind of training remains a key objective for the

industry. Staff retention also remains an important area

of focus within hospitality and tourism. Providing strong

career pathways and ensuring that these are promoted

both within the industry and beyond will ensure that our

industry is recognised for the high level of skills it offers

and improve its reputation. Adequate training, higher

retention rates and clearer career pathways will also

help address skills gaps and contribute to increased

productivity – a situation that all businesses will no doubt

seek to achieve.

Improvements in customer service have been an ongoing

theme in the State of the Nation report for some years

and 2012 continues to be a focus. With the success of

the London Olympic and Paralympic Games still fresh

in our minds, it is clear that we are more than capable

of delivering excellence in customer service. Knowing

that customer expectations will only continue to rise, and

that customer tastes and preferences are changing, the

industry must continue to address staff skills shortages in

this area if it is to continue to grow.

Tight profit margins and the desire for greater and more

tailored services are also going to impact the industry

significantly – with customer service once again a major

focus for businesses. These areas could ultimately end

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up being a key differentiator for businesses and focusing

on providing training to develop excellent customer

service skills could be the key to success in

the future.

The growth of social media, last minute booking, more

fluid customer loyalty, access to online deals and the

emergence of new markets is going to play an important

role in the future of the hospitality and tourism industry.

When combined with a more discerning audience that is

seeking a greater perceived value, employers will need

to take steps to engage with these new audiences on

less traditional platforms to increase their market share.

Mastering technology and identifying customer trends,

especially when combined with improvements in service

and a better customer experience, are shaping up to be

the areas businesses need to consider in the future.

Ensuring the right mix of staff can help in all of these

areas, but this can only be achieved if the industry

addresses public perceptions, identifies new labour

pools, and looks at broader trends across the economy.

Business planning and training are key to any successful

business – but making sure that this is tailored and

aimed at addressing individual needs is going to play

a fundamental role. Without looking at these areas,

businesses could see their competitors surge ahead in an

increasingly fickle market.

While the London 2012 Olympic and Paralympic Games

should certainly boost the sector for years to come, the

research provides some cautionary advice for employers

involved in other forthcoming events. Employers in close

proximity to an event may not necessarily experience

benefits, however businesses can profit through careful

planning and identifying opportunities to attract new

audiences.

Businesses that can successfully identify the opportunities

that changes within customer profiles, perceptions and

expectations present will continue to grow, and will

ultimately help increase the importance of our sector

within the overall UK economy.

Brian Wisdom

Chief Executive, People 1st


opportunities that come with change

It gives me great pleasure to

present People 1st’s State of

the Nation report 2013, which

demonstrates our industries’

progress through what

continues to be a challenging

economic period.

While many businesses

throughout the economy

have faced tough times, the

hospitality and tourism industry once again represents a

beacon of hope. Our contribution to the overall economy

continues to grow and our ability to provide skilled and

sustainable jobs for the future is apparent.

We have reaped the benefits the London 2012 Olympic

and Paralympic Games delivered throughout Great Britain,

and have seen a tremendous increase in our global brand

standing. Clearly both hospitality and tourism businesses

were at the forefront of this achievement, and it is an

endeavour of which we should be rightly proud.

However, our continued ability to grow is closely linked to

our ability to attract and retain the skilled staff that make

our industry great. With fantastic opportunities available

at both entry level and senior positions, we continue to

promote our industry as an excellent place to work.

There are significant opportunities in management and

leadership positions but, as this report highlights, this

is one of the key areas where we must dedicate our

resources to develop talented and passionate staff.

We have the opportunity to offer eager individuals rapid

advancement to more senior positions, but we need

to focus on providing them with the right training and

support to ensure that they can meet their own goals and

provide businesses with the benefits they need.

With changing demographics vastly influencing the

industry and affecting both customer preferences and the

range of clientele our industries need to reach, embracing

new ideas and concepts is key. The ongoing importance

of customer service, consumers’ increasing knowledge

and awareness of what they want and require from our

industries, and the ability to access vast amounts of

information from virtually anywhere are impacting our

industry. We now face the challenge of how to adapt to

these new practices and of finding ways to turn such

changes to our benefits.

Identifying and accessing new pools of talent will also

be of significance to those that can achieve this; such

individuals could offer the workforce flexibility and loyalty

that almost represents the ideal for many employers.

As an industry we have much to offer the UK, although

we continue to face challenges. Employers are now

working more closely with colleges and learning providers,

and the number of apprenticeships continues to grow,

all of which will go a long way to meeting the industry’s

ongoing needs for skilled staff. Yet while we have

successfully addressed some skills gaps across the

sector, we must remain vigilant if we are to continue to

succeed in this area. Highlighting and promoting nontraditional

career paths – and ensuring that clear career

paths are indeed available across the sector – will help

many employers plug the gaps that continue to plague

some areas of business.

We continue to spend more money than the UK average

on training our staff, but the high staff turnover rates and

clear skills gaps mean that much of this training remains

directed at recruiting new people. The industry continues

to attempt to address this problem, but more work clearly

needs to be done to deal with such a fundamental issue.

Our sector prides itself on giving people excellent career

opportunities and the chance to work in a dynamic and

exciting industry. We must continue to adapt and change,

and meet our customers’ expectations so that we can

continue to thrive.

David Fairhurst

Chairman, People 1st

www.people1st.co.uk 5


6

Executive Summary

State of the Nation 2013 is the fourth report from

People 1st that examines the changing skills and labour market

across the hospitality and tourism sector. It looks at employers’

responses to the continuing economic downturn and how this is

affecting recruitment and training decisions.

This edition has a particular focus on the future trends

employers and commentators believe will have an impact

on the sector and the skills workforces will need. It also

includes a special follow-up report on the impact and

legacy the London 2012 Olympic and Paralympic Games

had on the hospitality and tourism industries.

economic performance

• The hospitality and tourism sector employs seven

percent of the working population, or one in every 14

jobs. In terms of gross value added (GVA), 1 the sector

contributed £40.6bn to the UK economy in 2011, or

4.2 percent of the country’s total GVA.

• The latest figures show there were 181,500 individual

business sites operating across the hospitality and

tourism sector. Restaurants, hotels, and pubs, bars

and nightclubs comprise the greatest number of

businesses and represent the greater share (70

percent) of the sector’s GVA.

• The sector is predominately made up of small

businesses; almost half (46 percent) employ less

than five people while only one percent of businesses

employ more than 100 people. The types of challenges

smaller businesses face will therefore impact the

sector significantly.

• A more strategic approach to business planning is

needed to raise profitability and improve business

survival rates. Only 1 in 5 employers sought business

advice in the last 12 months, while less than half had

a business plan. The implications for skills and training

were clear; those that had a business plan were

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significantly more likely to have trained staff in the last

12 months (57 percent) compared to those that did not

(27 percent). There was also a link between business

planning, training activity, and reports of increased

sales and turnover.

• Overall, the results for the sector suggested a slight

increase in sales or turnover in the last 12 months,

with 39 percent of businesses reporting an increase

compared to 26 percent reporting a decrease.

• Perhaps sensing that the economy had turned a

corner, the outlook in the coming year was optimistic

as 59 percent of employers expected an increase in

sales or turnover in the next 12 months compared to

just 9 percent who forecast a decrease.

• The hospitality and tourism sector continues to offer

attractive enterprise opportunities to entrepreneurs,

with low barriers to entry. Although both start-up and

closure rates were higher than across the rest of the

economy, 2011 represented the first time in recent

years that start-ups exceeded closures, with a net

growth of one percent.

• The hospitality and tourism sector played an

important role in the success of events such as the

London 2012 Olympic Games and Paralympics,

and in strengthening the UK’s position as a top-ten

global brand. 2

• This has highlighted the UK’s need for a skilled,

professional workforce in the future to meet

increasingly high visitor expectations. This can be

achieved through implementing appropriate training

programmes and clear development pathways for

the workforce.

1 Gross Value Added (GVA) measures the contribution to the economy of each individual producer, industry or sector in the United Kingdom. It is used in the estimation of Gross

Domestic Product (GDP), which is a key indicator of the state of the whole economy.

2 FutureBrand, 2012, Country Brand Index 2012-13


Workforce size and characteristics

• The sector’s workforce currently accounts for

2,076,000 jobs, increasing by 0.7 percent between

2010 and 2011, which is higher than the average for

the economy as a whole (0.5 percent). As the sector’s

workforce continues to grow so does its relative

importance to the UK economy. However, this growth

is not uniform across the UK; in Northern Ireland the

workforce has grown by more than seven percent

following huge investment in tourism.

• Restaurants continue to employ the largest workforce,

which increased by 7.4 percent between 2010 and

2011. Elsewhere, numbers in events and self-catering

accommodation, holiday parks and hostels declined,

which is surprising given the increase in domestic

tourism. The decline over recent years in the pubs,

bars and nightclubs workforce now appears to be

stabilising as many pubs and bars continue to diversify

their offering.

• More than a third of sector businesses (35 percent)

expect their workforce to increase in the coming year

and the number of people working in the sector as a

second job has increased.

• Longer-term employment projections suggest that by

2020 the sector’s workforce will have grown by six

percent, which is higher than the projected increase

for the economy as a whole. Including replacement

demand, an additional 660,200 people will need to be

recruited to 2020. Importantly, recruitment will continue

to be needed in management roles that demand a

broad range of high level skills critical to business

success and profitability.

• Workforce characteristics differ across occupations

and industries. The sector has always employed a

high proportion of part time workers – nearly half of the

hospitality and tourism workforce is employed on a

part time basis (48 percent), which is higher than the

economy average (28 percent). People traditionally

filling these roles are largely transient and employers

are likely to experience significant labour turnover and

skills gaps.

• The sector’s workforce has traditionally been much

younger than other sectors, with two in five employees

aged under 30. Managers are also comparatively

young, underlining both the opportunities for career

progression and the need to support and train new

managers.

• There are more women than men working in the sector

(57 percent female), but women continue to be underrepresented

in senior management positions and overrepresented

in lower-skilled occupations. Our research

shows that only 32 percent of sector employers have

female senior managers.

• The sector continues to rely on a high percentage of

migrant workers; 22 percent compared to a 14 percent

Including replacement

demand, an additional

660,200 people

will need to be recruited to 2020

average across the economy as a whole. We found

that 13 percent of sector businesses employ staff from

outside the European Union (EU), with businesses in

London being the most likely to employ these workers

(27 percent). Employers believe that it will become

increasingly important to be able to recruit talent

internationally, for example chefs, but this will largely

depend on immigration policy.

• The average earnings in the hospitality and tourism

sector are £20,183 per year, considerably lower

than the economy average of £32,708. Hotel and

accommodation managers and proprietors earn the

highest salaries (£34,915 per year), while bar staff,

waiting staff, and kitchen and catering assistants

earn the least (around £13,000 on average). Salaries

in many occupations have fallen over the past year,

reflecting the more challenging market conditions.

Recruitment and retention

• Continued growth and the need to replace existing staff

means the sector continues to advertise vacancies in

large numbers. In 2011, 16 percent of hospitality and

tourism employers had a vacancy, which is higher than

the UK economy as a whole (12 percent). Vacancies

were most commonly reported in hotels, restaurants,

and pubs, bars and nightclubs.

• According to the quarterly Hospitality Employment

Index, the number of job advertisements in 2012 fell

by eight percent compared to 2011, showing that

the market may be levelling. The expected rise in

recruitment before the London 2012 Olympic and

Paralympic Games did not happen, suggesting that

any recruitment was localised and that employers

managed extra demand using existing staff.

• There were significant variations in job postings

by occupation, with the highest numbers of roles

available for restaurant managers and a variety of chef

occupations. This demand may reflect the growth in

the restaurant sector.

• Six percent of hospitality and tourism establishments

said they have a vacancy they considered hard-to-fill

at the time of the UKCES Employer Survey in 2011,

www.people1st.co.uk 7


8

slightly higher than the UK average of four percent.

Using a slightly different measure, People 1st research

recently showed that one in ten hospitality and tourism

employers (11 percent) had experienced vacancies

that were hard-to-fill in the previous twelve month

period. By industry, hotels (16 percent) and restaurants

(13 percent) were most likely to have experienced

difficulties. By occupation the highest proportion of

hard-to-fill vacancies were chefs (39 percent).

• The main reasons behind hard-to-fill vacancies relate

to the quality of applicants, in particular a low number

of applicants with the required skills (32 percent),

attitude, motivation or personality (21 percent). Despite

high levels of unemployment, 18 percent of employers

with hard-to-fill vacancies believe there are insufficient

numbers of people interested in doing the types of

work available.

• Around two thirds (65 percent) of hard-to-fill vacancies

in the sector are due to skill shortages, although only

a relatively small percentage of establishments (four

percent) are affected. The majority of skill shortage

vacancies are for elementary staff (43 percent) and

skilled trade occupations (41 percent).

• The types of skills that are difficult to recruit can be

grouped into three areas: job-specific skills, which

include culinary skills for chefs; inter-personal skills

or softer skills such as communication, customer

service and team working; and management and

leadership skills.

• Chefs remain difficult to recruit as there has been an

increase in demand for these skills as the pub industry

has started to focus on food and the restaurant

industry has continued to grow.

• The biggest impact of hard-to-fill vacancies and skill

shortages appears to be on the rest of the workforce,

which has to compensate for vacancies not being

filled. Nearly half of businesses reporting significant

recruitment difficulties also suggest this has an impact

on being able to meet customer service expectations.

• The labour turnover rate across the hospitality and

tourism sector continues to fall with the latest data

showing a turnover rate of 20 percent, a significant fall

from 31 percent in 2009. Staff reluctance to change

employers during the current economic climate may

explain this, however anecdotally more employers

appear to be focusing on how they engage and retain

their staff, recognising that there can be significant

costs to recruiting and training new employees.

Workforce skills and development

• Employers in the sector spend a substantial amount

of money on training due to the sheer volume of

staff that need to be trained in an on-going cycle of

replacement. Many staff do not stay in their role long

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enough to become proficient, contributing not only to

skills gaps, but also to reduced staff productivity rates.

• Skills gaps exist within a business where employers

identify that one or more of their staff are not fully

proficient in their roles. In hospitality and tourism, 21

percent of employers report skills gaps, compared to

only 13 percent in the overall economy. Nine percent

of the hospitality and tourism workforce was reported

to have skills gaps compared to only five percent in

the economy overall. However, both sets of figures

represent an improvement since 2009.

• By industry, 30 percent of employers in hotels and 25

percent of restaurants reported a skills gap, higher than

the sector average.

• Elementary occupations were most likely to exhibit

skills gaps (22 percent). As many staff enter the sector

at this level, these figures may point to issues with

work-readiness among new entrants. That most skills

gaps were reported to be because staff were new

to the role (62 percent) further heightens this belief.

Employers also reported high levels of skills gaps

among management occupations.

• Overall, sector employers reported that customer

handling skills (61 percent) most commonly needed

improvement, which was also the number one skills

concern for the future.

• Almost two thirds (63 percent) of businesses with

skills gaps recognise that they have an impact on their

business; 50 percent reported that they lead to an

increased workload for other staff, 32 percent believe

it makes it difficult for them to meet quality standards,

and 31 percent state that they increase operating

costs. In a sector where quality and costs are

important to profitability and productivity, this represents

a significant issue.

• In total, 41 percent of employers said that they had

arranged or funded staff training or development in the

last 12 months. Business size was a factor in this; the

larger the business the more likely it was to train. In

terms of future investment, the outlook was positive as

employers indicated they expected a slight increase in

their investment in training in the coming 12 months.


• Most employers favoured funding or subsidies as an

incentive to train (64 percent), followed by an increase

in sales or financial turnover (61 percent) and a tax

incentive for businesses (58 percent). However, more

than half (57 percent) of businesses simply said that

a greater awareness of what was available would

increase their investment in training.

• Only around a third of employers (36 percent) provided

training based on personal development needs, which

suggests that much of the training in the sector is

uniform and most likely at a basic or introductory level.

• The most likely group to receive training were those in

elementary occupations (63 percent), with training for

managers, directors and senior officials also high at

58 percent. Only 15 percent of skilled trades such as

chefs receive training.

• Across hospitality and tourism as a whole, just five

percent of businesses currently employ anyone on a

Government approved apprenticeship programme.

There were differences by industry, with hotels

employing the highest proportion in the sector (12

percent). However, more than a quarter of sector

employers (28 percent) said they were likely to employ

an apprentice in the future, highlighting the potential for

the current employment rate to increase.

future trends

• We identified a number of potential drivers, presenting

either opportunities or barriers to business growth over

the next 3-5 years. Overall, it was clear that customer

trends were employers’ most important concern for the

future.

• 41 percent of employers believed that changes

in customer spending patterns would be an

integral driver for their business in the future, while

44 percent thought they represented a barrier to

growth. Equally, changing customer tastes and

preferences could present both opportunities

(32 percent) and barriers (28 percent) to growth,

requiring businesses to reassess their target markets

for products and services.

• Rising customer expectations was seen as a positive

trend among 28 percent of employers. To meet these

expectations, it follows that the investment required

to improve quality and standards in a service driven

sector such as hospitality and tourism should focus on

increasing the skills of those working in the sector.

• Underlying the future changes in customer trends was

a belief that the current economic crisis was changing

values and behaviours among consumers, who have

become more cautious and changing their spending

patterns, which is reflected in domestic tourism trends.

• There was the view that technology and social media

were helping customers to become increasingly

knowledgeable and well informed. As a result

customers have high expectations about the products

and services they receive and businesses need to not

only meet these, but exceed them.

• With rising expectations, increased competition and

knowledgeable customers looking for both value for

money and good quality, there was a strong message

that the service provided – and the people providing

that service – would be the crucial differentiator.

• In addition to changing customer behaviours, wider

product and market trends are emerging. Some

have implications for the sector as a whole, such as

rising costs, while others are drivers within particular

industries. Customers looking for added value and

technology are driving a trend for discounting and

vouchers in some industries as customers can now

easily search for deals online, but there is a concern

that this activity undermines rather than creates

brand loyalty.

• Social media is key for many businesses as they

look to take advantage of new ways to engage with

customers; almost 1 in 3 (29 percent) expected this to

be a growth driver, compared to just 11 percent who

saw it as a barrier.

• Having a strong online presence and positive approach

to embracing social media is becoming increasingly

important to interact and communicate with customers,

and this is set to continue. Social media is a growing

communication channel that enables businesses to

tailor marketing messages to the individual. Individuals

using social media can also influence decision-making

and purchasing habits, acting as brand advocates.

• Hospitality businesses have tended to be slow

adopters of social media and online technology, mainly

due to a lack of understanding, time or money, or a

fear of negative reviews. However, many businesses

have successfully embraced social media, investing

time and resources, and where there have been

negative reviews, addressed them proactively as part

of a managed process.

• We asked employers to identify which skills they

thought would be important to their business in the

next 3-5 years to assess the future skills implications

of these trends and their impact on the workforce.

Employers overwhelmingly identified customer service

skills as the most important (88 percent).

• Management and leadership was the next most

important future skills need (69 percent) according to

employers. It is generally accepted in the sector that

managers often lack the experience to excel in their

role and employers clearly think this trend will continue.

Tackling this need among management occupations

could have a profound impact on many aspects of the

business and its workforce.

www.people1st.co.uk 9


1

Economic Contribution

and Performance


Introduction

The hospitality and tourism sector continues to employ a

significant number of people and provides a substantial

financial contribution to the economy every year. The

sector has fared well in spite of the prevailing economic

conditions and plays an important role in offering an initial

step into work for people seeking employment.

In 2012 the sector played its part in the success of events

such as the London 2012 Olympic and Paralympic

Games and the Queen’s Diamond Jubilee celebrations.

Key to this was the warm welcome visitors received from

thousands of volunteers who were trained to enhance the

visitor experience. It can be no coincidence that these

successes contributed to improved perceptions of the

UK in a recent study and the strengthening of the UK’s

position as a global brand. 3

As we have reported in previous editions of this report,

the sector continues to face challenges in terms of

its workforce productivity, but as recruitment begins

to slow and businesses become leaner as a result of

the recession, there is a sense of opportunity. There is

a chance to invest in the staff currently employed, to

better retain their skills, and to develop meaningful career

pathways for them.

What constitutes the hospitality and

tourism sector?

Hospitality and tourism is one of the UK’s most diverse

sectors, comprising a range of different industries, but all

with their roots in the service sector. Regardless of the

size of an organisation, these similarities mean that they

face similar challenges. The ten sub-industries that make

up the sector are:

• Events

• Food and service management

• Gambling

• Hospitality services

• Hotels

• Pubs, bars and nightclubs

• Restaurants

• Self-catering accommodation, holiday parks and

hostels

• Tourist services

• Visitor attractions

Economic Contribution and Performance | Chapter 1

The size and number of businesses

In 2012 there were 181,500 individual business sites

operating across the hospitality and tourism sector

(table 1). Most of these were private companies (59

percent) and 1 in 5 were sole traders (20 percent).

The remainder were mostly partnerships (15 percent).

Restaurants, hotels, and pubs, bars and nightclubs

comprise the greatest number of businesses and

represent the greater share (70 percent) of the sector’s

gross value added (GVA). 4 There have been small

changes in the number of establishments by industry,

notably restaurants, which have increased by 3,800

businesses compared to 2011. Conversely, pubs,

bars and nightclubs have decreased in numbers amid

changes in consumer behaviour and diversification within

the industry. Food and service management business

numbers recovered by 1,400 after a significant decrease

in 2011.

As measured by the number of employees, the hospitality

and tourism sector is predominately made up of small

businesses; almost half (46 percent) employ less than

five people (figure 1). In contrast, only one percent of

businesses employ 100 people or more. Any attempt to

engage with or intervene in the sector needs to recognise

the importance of small to medium sized businesses.

In addition, the types of challenges smaller businesses

face will significantly impact the sector, for example,

banks reducing lending to small businesses during

the economic downturn and the inhibiting effect this

has on growth.

Figure 1: Hospitality and tourism businesses by

size, 2012

1%

2%

100 employees or more (1%)

50-99 employees (2%)

10-49 employees (24%)

5-9 employees (27%)

1-4 employees (46%)

Source: Inter-departmental Business Register, 2012, Office for National

Statistics

3 FutureBrand, 2012, Country Brand Index 2012-13

4 Gross Value Added (GVA) measures the contribution to the economy of each individual producer, industry or sector in the United Kingdom. It is used in the estimation of Gross

Domestic Product (GDP), which is a key indicator of the state of the whole economy.

24%

27%

46%

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12

Chapter 1 | Economic Contribution and Performance

Table 1: Number of businesses, 2008-2012

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2008 2009 2010 2011 2012

2011-

2012

2008-

2012

Proportion

of sector

establishments

Restaurants 72,800 73,400 72,600 71,800 75,600 5% 4% 42%

Pubs, bars and

nightclubs

Food and service

management

60,800 57,500 54,700 52,800 52,000 -2% -14% 29%

21,600 25,600 24,400 19,200 20,600 8% -4% 11%

Hotels 12,600 12,300 12,000 12,300 12,400 1% -1% 7%

Gambling 11,700 11,800 11,800 11,700 11,600 -1% -1% 6%

Self-catering

accommodation,

holidays parks and

hostels

4,500 4,000 3,900 3,700 3,800 2% -15% 2%

Events N/A 3,200 3,200 3,300 3,500 5% N/A 2%

Tourist services N/A 1,400 1,400 1,400 1,400 1% N/A 1%

Visitor attractions 500 500 500 400 500 2% -13% < 1%

Total (discounting

events and tourist

services)

Total (including

events and tourist

services)

184,500 185,100 179,900 172,000 176,600 3% -4% 100%

N/A 189,700 184,500 176,800 181,500 3% N/A

Source: Inter-departmental business register, 2008-2012, Office for National Statistics

NB: The official coding strategy used in datasets differs from 2009 onwards, which is why ‘N/A’ appears alongside events and tourist services in 2008.

Bank lending trends may affect certain industries more

than others, especially where the majority of businesses

are small. Table 2 shows the size of business by industry,

illustrating that most businesses within events, and selfcatering

accommodation, holiday parks and hostels have

less than five staff (78 and 71 percent respectively).

It is well known that while most businesses in the

sector are small, larger businesses employ the greatest

proportion of staff. Figure 2 compares the proportion

of businesses and share of employment by business

size. For example, 42 percent of people work for an

organisation with 250 or more employees, however these

larger organisations represent less than one percent

of sector businesses. In terms of impact upon the

workforce, greater reach can be achieved by engaging

with larger employers.


Table 2: Industry businesses by size, 2012

Industry

1-4

employees

5-9

employees

Economic Contribution and Performance | Chapter 1

10-49

employees

50-99

employees

100 or more

employees

Events 78% 11% 9% 1% 1%

Food and service management 53% 24% 20% 1% 1%

Gambling 35% 55% 9% 1% 1%

Hotels 27% 18% 41% 9% 5%

Pubs, bars and nightclubs 43% 27% 29% 1%


14

Chapter 1 | Economic Contribution and Performance

New businesses and closure rates

In addition to changes in numbers of businesses it is

also important to understand variations in start-ups

and closures; the net change and how the economy is

impacting business creation, an indicator of growth. The

hospitality and tourism sector offers attractive enterprise

opportunities to entrepreneurs and investors, providing

relatively low barriers to entry.

In the most recent available data (2011), 20,925 new

businesses started in hospitality and tourism, while

19,285 ceased trading (table 3). This equates to a

start-up rate of 12.3 percent and closure rate of 11.4

Table 3: Business start-ups and closures, 2011

www.people1st.co.uk

Number of

start-ups

Start-up rate

Table 4: Business start-ups and closures, 2008-2011

percent. Both these rates are higher than the average

for the economy as a whole (11.2 and 9.8 percent

respectively, table 4). The figures might suggest that

business performance across hospitality and tourism is

slightly more volatile and unstable; while entrepreneurs

appear more likely to set up businesses in these

industries as they have associations with attractive

‘lifestyle’ enterprises, many may underestimate the degree

of planning, investment and skill required to make a

business successful in the sector.

Although both start-up and closure rates are higher than

across the rest of the economy, 2011 represented the

Number of

closures

2008 2009 2010 2011

Start-up rate Hospitality and tourism 13.0% 12.2% 11.2% 12.3%

Whole economy 11.5% 10.1% 10.0% 11.2%

Closure rate Hospitality and tourism 13.0% 14.1% 12.4% 11.4%

Whole economy 9.6% 11.8% 10.6% 9.8%

Net rate Hospitality and tourism 0.0% -2.0% -1.2% 1.0%

Whole economy 1.9% -1.8% -0.6% 1.3%

Source: Business Demography, 2011, Office for National Statistics

http://www.ons.gov.uk/ons/rel/bus-register/business-demography/2011/index.html (accessed 9 February 2013)

Closure rate

Net business

performance

Hotels 735 6.8% 910 8.4% -1.6%

Self-catering accommodation,

holiday parks and hostels

270 6.8% 345 8.6% -1.9%

Restaurants 11,000 13.6% 9,260 11.5% 2.2%

Food and service management 1,650 15.9% 1,300 12.6% 3.4%

Pubs, bars and nightclubs 5,505 10.8% 6,115 12.0% -1.2%

Tourist services 200 17.2% 140 12.0% 5.2%

Events 550 14.7% 370 9.9% 4.8%

Gambling 80 4.9% 160 9.8% -4.9%

Visitor attractions 935 15.3% 685 11.2% 4.1%

Hospitality and tourism 20,925 12.3% 19,285 11.4% 1.0%

UK economy 261,370 11.2% 229,845 9.8% 1.3%

Source: Business Demography, 2011, Office for National Statistics

http://www.ons.gov.uk/ons/rel/bus-register/business-demography/2011/index.html


first time in recent years that start-ups have exceeded

closures, with a net growth of one percent. While slight,

this is more positive than in previous years when there

was zero growth in 2008, negative growth of two percent

in 2009, and growth of -1.2 percent in 2010.

As the largest industry within hospitality and tourism

and one that has seen an increase in overall business

numbers, restaurants reflect this overall trend. They

had the largest number of start-ups and closures, but

importantly experienced a net growth of 2.2 percent.

Some of the smaller industries also experienced higher

net growth, albeit based on smaller business numbers.

While there are some signs of growth in the sector, the

longer-term prognosis for business start-ups remains

less positive and it will take time to see any major positive

change. Only 56 percent of new businesses in the

sector reach their three year anniversary (table 5), which

suggests that business planning, information, training and

support are critical to business survival.

Table 5: Business survival rates, 2008-2011

New

businesses

1 year

survival

1 year

(percent)

Economic Contribution and Performance | Chapter 1

2 year

survival

2 year

(percent)

3 year

survival

3 year

(percent)

Hotels 970 865 89% 700 72% 565 58%

Self-catering

accommodation,

holiday parks and

hostels

390 370 95% 295 76% 250 64%

Restaurants 11,515 10,810 94% 8,530 74% 6,670 58%

Food and service

management

Pubs, bars and

nightclubs

1,385 1,305 94% 990 71% 755 55%

6,915 6,425 93% 4,880 71% 3,640 53%

Tourist services 140 135 96% 100 71% 75 54%

Events 645 640 99% 520 81% 400 62%

Gambling 135 105 78% 80 59% 65 48%

Visitor attractions 640 570 89% 470 73% 370 58%

Hospitality and

tourism

22,735 21,225 93% 16,565 73% 12,790 56%

UK economy 267,445 246,065 92% 197,855 74% 155,205 58%

Source: Business Demography, 2011, Office for National Statistics

Importance of the sector to

the economy

The hospitality and tourism sector is a large employer,

containing around seven percent of the working

population or one in every 14 jobs. In terms of gross value

added (GVA), a key measure of value and productivity, the

sector contributed £40.6bn in GVA to the UK economy

in 2011 (table 6). This represents 4.2 percent of the

country’s total GVA.

In recent years, the sector has performed considerably

better than the economy as a whole in spite of the

recession, increasing its contribution by 13 percent

between 2010 and 2011, compared to the overall

economy (four percent).

There is some debate about how well GVA captures

the true value of goods and services and, therefore,

the economic contribution of the overall service sector.

In 2010, the finances associated with the wider visitor

economy were examined and it was estimated that the

direct contribution to the economy was much higher

(£52bn), but that it could be as high as £115bn when

indirect contributions are taken into account. 5

www.people1st.co.uk 15


16

Chapter 1 | Economic Contribution and Performance

Economic contribution by industry

and region

As reported earlier, the larger industries account for 70

percent of the sector’s GVA. Restaurants contributed the

highest proportion (over £12bn or 30 percent), followed

by pubs, bars and nightclubs (£8.4bn or 21 percent) and

hotels (£7.6bn or 19 percent).

To enable comparisons by region the available data for

accommodation and food services can be used as a

proxy; 6 this subset of the hospitality and tourism sector

contributes £39.6bn in GVA (3.1 percent) to the UK’s

economy (table 7). Regionally, London and the South

East contribute the greatest amount (£8.6bn and

£5.4bn respectively). For example, the events that

took place in 2012 buoyed the London hotel market,

which experienced growth despite poorer performance

in the regions.

Relative to the overall GVA for each region, the

South West was the largest contributor proportionally

(3.5 percent of local GVA) because of its popularity as

a tourist location. In terms of the nations, Wales and

Scotland were the biggest contributors (3.5 and 3.4

percent respectively).

Table 6: Gross value added (GVA £m) by sector industry, 2008-2011

www.people1st.co.uk

2008 2009 2010 2011

Net %

2008-2011

Net %

2010-2011

Restaurants 10,018 9,910 10,413 12,061 20% 16%

Pubs, bars and nightclubs 8,204 7,448 7,809 8,436 3% 8%

Hotels 7,732 7,439 7,225 7,599 -2% 5%

Gambling 4,608 4,676 4,016 4,900 6% 22%

Food and service

management

3,824 2,786 3,724 4,655 22% 25%

Events 800 730 997 1,312 64% 32%

Self-catering accommodation,

holiday parks and hostels

633 661 846 798 26% -6%

Visitor attractions 332 432 328 471 42% 44%

Tourist services 216 400 450 383 77% -15%

Hospitality and tourism 36,367 34,482 35,808 40,615 12% 13%

Whole economy 963,921 904,625 938,382 974,082 1% 4%

Source: Annual Business Survey, 2011, Office for National Statistics

http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-276587

Economic contribution per person

Productivity levels across the hospitality and tourism

sector vary widely and the larger industries, for example

accommodation and food and beverage services,

have relatively low productivity (£24,000 and £14,000

respectively) compared to the average GVA contributed

per person in the overall economy (£34,000) (table 8).

These lower values can be attributed in part to the fact

that the sector is a low value-added business activity

relative to other areas of employment, a general feature

of the value of goods and services in the service sector.

Retail, which also operates in the service sector and is

often compared to the hospitality industry (in terms of its

profit margins for example), also has a lower than average

contribution at £23,810. These service sector industries

can be contrasted with the highest ranking sector,

banking, which contributes £527,430 per person.

Clearly the scope and margin for profit is much lower in

the hospitality and tourism sector, but other factors are at

play in making productivity lower, including work patterns,

poor investment in skills and training, pay rates, low staff

retention, engagement and motivation, and associated

leadership and management issues.

5 Deloitte, 2010, The economic contribution of the visitor economy, http://www.visitbritain.org/Images/Economic%20case%20for%20the%20Visitor%20Economy%20-%20

Phase%202%20-%2026%20July%202010%20-%20FINAL_tcm29-14561.pdf (accessed 9 February 2013)

6 Accommodation and food services account for around 75 percent of the wider hospitality and tourism sector.


Table 7: Gross value added (GVA) by nation and region, 2010

Accommodation

and food services

(GVA £m)

Total economy

Economic Contribution and Performance | Chapter 1

Proportion of

overall GVA from

accommodation

and food services

Change from

2009-2010

England 33,485 1,099,713 3.00% 0.1%

Northern Ireland 860 29,155 2.90% 0.2%

Scotland 3,583 106,080 3.40% 0.1%

Wales 1,630 46,320 3.50% 0.1%

United Kingdom 39,558 1,281,268 3.10% 0.1%

South West 3,500 99,136 3.50% 0.1%

North West 3,934 121,595 3.20% 0.2%

London 8,650 277,181 3.10% 0.2%

East of England 3,369 110,954 3.00% 0.1%

North East 1,246 40,984 3.00% 0.1%

South East 5,442 186,636 2.90% 0.1%

West Midlands 2,690 93,925 2.90% 0.0%

Yorkshire and

The Humber

2,561 89,388 2.90% 0.1%

East Midlands 2,093 79,914 2.60% 0.1%

Source: Annual Business Survey, 2011, Office for National Statistics http://www.ons.gov.uk/ons/publications/re-reference-tables (accessed 9 February 2013).

Looking at the skills gaps within businesses by industry

as an example, table 8 shows that for accommodation,

retail trade, and food and beverage services there is a

relationship between lower GVA and higher rates of

skill gaps.

High staff turnover – the number of people coming and

going in the sector – also impacts GVA per person.

Where this is in evidence employers can struggle to

maintain a high performing workforce, although this may

ultimately be a reflection of business practice. This is a

reappearing theme with hospitality and tourism and we will

return to this topic both in this and later chapters.

Table 8: GVA contributed per person, 2010

Industry

GVA (£000)

per person

employed

Businesses

with skills

gaps

Food and beverage services 14.23 22.3%

Retail trade 23.81 16.7%

Accommodation 24.08 16.3%

Gambling and betting 57.99 20.3%

Economy overall 34.09 13.1%

Source: Office for National Statistics, 2010; People 1st analysis of

Employer Skills Survey, 2011, Office for National Statistics

www.people1st.co.uk 17


18

Chapter 1 | Economic Contribution and Performance

Sales and turnover

So how has the sector fared in the current economic

climate and what is the short-term outlook? In our recent

employer survey, we asked questions about sales and

staff turnover in both the past 12 months and projections

for the coming year.

The overall results for the hospitality and tourism sector

suggested a slight increase in turnover in the last 12

months, with 39 percent of businesses reporting an

increase, compared to 26 percent reporting a decrease

(figure 3). Just under a third thought there was no change.

The outlook was surprisingly optimistic as many

businesses felt, or perhaps hoped, that 2012 represented

a turning point. In total 59 percent expected an increase

in business in the next 12 months, compared to just nine

percent who forecast a decrease.

In terms of business performance in the last year, there

were differences by industry (figure 4). This was especially

notable among food and service management employers

(49 percent) and hotels (44 percent), a significantly higher

proportion of which reported an increase in turnover

compared to the average for the sector (39 percent).

Events had also seen a recent increase, however the

results for events are indicative only and are based on a

smaller number of employers.

There was also clear evidence of a relationship

between increased turnover and the size of a business.

Approximately 28 percent of businesses with less than

five staff said their turnover had increased compared to

62 percent of employers with 50-249 employees.

Figure 3: Sales and turnover in the last and next 12 months

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

13% 12%

Increase

significantly

Source: 2012 People 1st Employer Survey. Base: Hospitality and tourism businesses.

www.people1st.co.uk

26%

41%

Increase

slightly

30% 32%

Stay about the

same

Last 12 months Next 12 months

16%

It is interesting to note that those employers that had

a business plan (48 percent reporting an increase in

turnover), had trained any staff in the last 12 months (49

percent), or that had employed an apprentice (67 percent)

were significantly more likely to have experienced an

increase in turnover compared to businesses that had

not (figure 5). However, business size is a key factor in

whether businesses engaged in these activities. For

example, smaller businesses were less likely to have a

business plan, to have trained any staff in the last 12

months, or to have employed an apprentice.

Business strategy and planning

Given the prominence of small businesses in the sector

reported earlier in this chapter and the trends in turnover

already seen, it is clear that a more strategic approach

and better business planning and support is needed for a

significant proportion of the sector’s employers.

Our research has shown that just under half of employers

across the hospitality and tourism sector (48 percent)

engage in some kind of business planning activity or

have a business plan, while only 22 percent received or

accessed any form of business support in the last 12

months. Among those businesses that did seek support,

most accessed marketing (57 percent), business planning

(55 percent) and financial advice (55 percent) (figure 6).

Importantly, we found that those businesses that had a

business plan were significantly more likely to have trained

staff in the last 12 months (57 percent) compared to

those that did not (27 percent). This is unsurprising since

a company’s training plan will be a key component of its

business planning activity. We discuss training in more

detail in the Workforce Skills and Development chapter.

7%

Decrease

slightly

10%

2%

Decrease

significantly


Figure 4: Sales and turnover in the last 12 months by industry

Hospitality and tourism (total)

Food and service management

Source: 2012 People 1st Employer Survey *Industries with low base size

Figure 5: Businesses reporting an increase in turnover in the last 12 months

Source: 2012 People 1st Employer Survey

Events*

Hotels

Pubs, bars and clubs

Restaurants

Holiday parks, self catering, hostels*

80%

70%

60%

50%

40%

30%

20%

10%

0%

39%

Hospitality

and tourism

(total)

Gambling

Tourist services

Visitor attractions*

48%

30%

15%

15%

21%

24%

23%

Economic Contribution and Performance | Chapter 1

26%

26%

28%

30%

29%

26%

25%

30%

28%

33%

34%

32%

29%

30%

32%

27%

33%

0% 10% 20% 30% 40% 50% 60%

67%

36%

34%

37%

39%

40%

44%

46%

49%

Increase Stay about the same Decrease

37%

49%

32%

Yes No Yes No Yes No

Have a business plan Employ an apprentice Trained staff in the

last 12 months

www.people1st.co.uk 19


20

Chapter 1 | Economic Contribution and Performance

Visitor numbers and UK perceptions

In a year that has seen a number of key events in the UK,

how has this been reflected in terms of visitor numbers

and perceptions of the UK’s image?

At the time of writing the available data for 2012 showed

that the total number of inbound international visitors

(for January to November) stood at 28,738 million

(figure 7). This represents a negligible change in numbers

from 28,665 million visitors in 2011. However, the

summer months of June, July and August saw drops in

the numbers of international visitors from the previous

two years.

Given the high expectations of record visitor numbers

for the London 2012 Olympic and Paralympic Games

and the Queen’s Diamond Jubilee these figures may be

surprising, but should be viewed in the context of the

prevailing economic climate.

Habitual visitors to the UK and London may have been

discouraged from visiting over the summer months

because of concerns about the much-publicised

inflated accommodation prices, overcrowding, and

transport issues. These factors also had a bearing on

the profitability of hospitality and tourism businesses,

particularly in parts of central London, which saw a

decrease in business as many stayed away. We discuss

the impact of the London 2012 Olympic and Paralympic

Games on sector employers in more detail in a dedicated

section at the end of this report.

Figure 6: Types of business support received

Source: 2012 People 1st Employer Survey. Base: Businesses receiving support in the last 12 months

www.people1st.co.uk

Marketing advice

Business planning

Financial advice

Legislation advice

Staff management

IT

Recruitment

Pricing

General start-up advice

Mentoring or advice from another business

Grant, funding

Advice on overseas trade

Other

9%

13%

While the impact of these events may not have been felt

in terms of visitor numbers, indicators of global visitor

perceptions show that these events, and in particular the

welcome extended by the thousands of volunteers and

Games-makers trained to welcome visitors, may have

contributed to improve the UK’s image.

The issue now is for the UK’s hospitality and tourism

sector to capitalise on this legacy and maintain these

positive perceptions at other events, destinations and in

customer facing roles. Some factors in being able to do

this will depend on joined-up Government policies and a

coherent tourism strategy, including better incentives to

visit the UK (addressing complex and ‘uncompetitive’ visa

processes for tourists, for example). Others will rest on the

shoulders of employers to provide a skilled, professional

workforce that meets increasingly high visitor expectations.

Summary

• The hospitality and tourism sector continues to grow

despite difficult economic conditions. Recent events such

as the London 2012 Olympic and Paralympic Games

have presented certain opportunities to businesses in

the sector and have raised the UK’s profile as a global

destination.

• With the sector growing at a faster rate than other

parts of the economy, its relative importance increases

in terms of stimulating enterprise, creating jobs

and getting people into work. The number of new

20%

29%

29%

33%

0% 10% 20% 30% 40% 50% 60%

38%

37%

47%

50%

55%

55%

57%


Figure 7: Inbound visitors to the UK, 2010-2012

January

February

March

April

May

June

July

August

September

October

November

December

0 500 1000 1500 2000 2500 3000 3500

Source: Overseas travel and tourism, 2010-2012, Office for National Statistics

businesses entering the sector is now exceeding the

number of closures.

• The sector continues to face challenges in terms of its

productivity, the added value of its goods and services,

and the productivity of its workforce. The margins and

scope for profitability can be much lower in the hospitality

and tourism sector and this can have an influence.

• Certain business practices can also contribute to lower

rates of productivity and undermine growth, including

poor investment in skills and training, low rates of

pay, a lack of career progression pathways and

management issues.

• Less than half of sector businesses are engaged in

business planning or have a business plan in place,

and only one in five have sought any form of business

support. Those businesses that do undertake business

planning activities are significantly more likely to train

staff, which is of considerable benefit in addressing

both skills gaps and skills shortages.

• In engaging employers in the sector it is important

to recognise the continued domination of small to

medium sized businesses, which are less likely to

plan or to train and in greater need of support. Given

this dominance, the challenges small businesses

face are likely to reflect issues the wider sector faces,

and more needs to be done to address some of the

barriers to small businesses.

Economic Contribution and Performance | Chapter 1

Year 2010

Year 2011

Year 2012

• Given the potential to increase business profitability

through planning, more effective ways to support

small businesses need to be found. Sector bodies

and Government need to address why more small

businesses are not seeking help and put in place

strong incentives to encourage them to do so.

Implications for employers

• Employers can take advantage of current events and

use these as opportunities for growth. Recent events

such as the London 2012 Olympic and Paralympic

Games have shown the need for planning and

preparation in order to realise benefits.

• Employers can gain much from taking advantage of the

available business support and advice. The Hospitality

Guild could help to address this need and link support

to appropriate training solutions.

• The sector as a whole needs to embrace the image

of growing and engaging, as demonstrated through

its strong economic performance compared to

other industries. It must also present itself as a viable

career option with clear pathways for progression

and development.

• Employers stand to save money and improve

profitability and performance by looking at measures

to invest in staff, retain their skills, identify appropriate

training to make staff more proficient, and reduce

skills gaps.

www.people1st.co.uk 21


2

Workforce Size

and Characteristics


Introduction

The hospitality and tourism sector continues to be a major

UK employer and is playing a critical role in helping people

into jobs. Its workforce composition is changing against a

backdrop of challenging economic figures for the UK and

an increasing social debate about the nature of new jobs

being created to reduce unemployment.

In this chapter we look at the size and characteristics of

the workforce against this backdrop and, in particular,

explore the impact workforce characteristics may have on

the sector’s ongoing skills requirements.

Workforce size

The hospitality and tourism sector accounts for more than

2 million jobs, which equates to one in 14 workers across

the UK and the latest figures from 2011 show that the

workforce currently stands at 2,076,000; an increase of

0.7 percent on the previous year. This increase is higher

than the average across the economy as a whole (0.5

percent) and demonstrates the resilience of the sector in

the face of the economic downturn.

As the hospitality and tourism sector continues to grow

and other sectors contract, its relative importance to

the UK economy is increasing. The low barriers to entry

mean that people can start working in the sector with

little experience and develop into higher skilled and

management positions. This provides the Government

with an opportunity to work with sector employers to

help get more people into work and to support its social

mobility agenda.

The negative aspect to this relatively easy entry and the

ability to learn ‘on the job’ is that some still perceive the

sector as only offering low-skilled, transient jobs. While

transient staff are filling many part-time roles, the reality

is that the sector needs skilled staff. More needs to be

done to promote these opportunities and the availability

of strong development pathways to overcome this

perception.

“ There’s a good opportunity with youth

unemployment to show how good we are at

creating careers, not just jobs.


Peter Martin, Managing Director, Peach Factory

Workforce Size and Characteristics | Chapter 2

The hospitality and tourism

sector accounts for more than

2 million jobs

The sector’s workforce growth is not uniform across the

UK (table 9). Scotland’s hospitality and tourism workforce

has reduced by five percent over the last twelve months,

yet in Northern Ireland the workforce has grown by

more than seven percent following huge investment in

tourism. In England, there has been growth in the two

northern regions and a reduction in the South East and

South West; however, London experienced a six percent

increase in its workforce between 2010 and 2011.

www.people1st.co.uk 23


24

Chapter 2 | Workforce Size and Characteristics

Table 9: Workforce numbers across the UK

Country/region

This lack of uniformity is also reflected across the

different industries making up the sector (see table 10).

The restaurant industry continues to employ the largest

workforce and the overall growth in the sector is largely

attributable to this area, which increased its workforce to

709,700 employees (up 7.4 percent between 2010-11).

While the hotel and gambling industries also increased in

size, all other industries witnessed a decline, most notably

in events and self-catering accommodation, holiday

parks and hostels. It is likely that in the next annual set of

figures the events industry will increase in size following

the Queen’s Diamond Jubilee and London 2012 Olympic

and Paralympic Games, but the figures from 2011

continue to suggest that conferences, meetings and

exhibitions are being cut back as a result of the economic

downturn. The decreased number of staff in self-catering

accommodation, holiday parks and hostels is surprising

as the industry has had a buoyant few years due to an

increase in domestic tourism.

www.people1st.co.uk

Workforce

number

Proportion

of sector

workforce 2011

Proportion of

local workforce

2011

Difference

between

2010 and 2011

% change

between

2010 and 2011

England 1,724,000 83% 6.8% 22,900 1.3%

Northern Ireland 52,400 3% 6.4% 3,800 7.7%

Scotland 202,700 10% 7.9% - 10,600 -5.0%

Wales 96,900 5% 7.0% - 700 -0.7%

United Kingdom 2,076,000 100% 6.9% 15,300 0.7%

North East 95,300 5% 8.2% 8,100 9.3%

North West 249,700 12% 7.8% 17,900 7.7%

Yorkshire and Humberside 171,100 8% 6.9% - 2,600 -1.5%

East Midlands 143,000 7% 6.5% - 1,100 -0.8%

West Midlands 154,600 7% 6.3% - 7,700 -4.8%

Eastern 170,800 8% 5.8% 3,700 2.2%

London 283,700 14% 7.2% 15,600 5.8%

South East 259,200 12% 6.0% - 3,100 -1.2%

South West 196,600 9% 7.5% - 7,900 -3.9%

Source: People 1st analysis of Labour Force Survey 2011, Office for National Statistics

The figures also suggest that the significant decline seen

in recent years in the pubs, bars and nightclubs workforce

is now stabilising. While there has been a minor decrease

in its workforce, this can be considered small compared

to the number of units closing. This supports the view

that in workforce terms the increase in large-scale pubs

offering food is compensating for the large number of

pubs closing.


Table 10: Workforce numbers by industry

Industry 2010 2011

Employment projections

Looking to the future, the 2012 People 1st Employer

Survey asked businesses how they expected their

workforce size to change over the next 3-5 years. Overall,

more than a third of sector businesses (35 percent)

expect their workforce to increase, while 54 percent

believe it will stay the same and five percent expect it to

decrease.

Workforce Size and Characteristics | Chapter 2

Difference between

2010 and 2011

% change between

2010 and 2011

Restaurants 660,700 709,700 48,900 7.4%

Hospitality services 401,100 386,000 -15,000 -3.7%

Pubs, bars and nightclubs 343,400 342,200 -1,200 -0.4%

Hotels 249,000 262,000 13,100 5.3%

Food and service

management

188,800 172,100 -16,700 -8.9%

Gambling 83,800 87,300 3,500 4.1%

Self-catering accommodation,

holiday parks and hostels

67,100 60,000 -7,100 -10.6%

Tourist services 28,400 24,400 -4,000 -14.1%

Events 25,400 19,500 -5,900 -23.2%

Visitor attractions 13,000 12,800 -300 -1.9%

Total 2,060,700 2,076,000 15,300 0.7%

Source: People 1st analysis of Labour Force Survey, 2010-2011, Office for National Statistics

Note: Figures are rounded and may therefore not sum to totals

Events

Food and service management

Restaurants

Visitor attractions

Pubs, bars and nightclubs

Hotels

Tourist services

0% 20% 40% 60% 80% 100%

Figure 8 shows how this varies by industry. What is most

striking is that respondents in the events and food and

service management industries were much more likely

to expect an increase, which contrasts with the latest

figures from 2010-11. This may suggest more long-term

optimism despite recent trends.

Figure 8: How employers expect permanent workforce to change in next 3-5 years

Self-catering accommodation,

holiday parks and hostels

Gambling

Increase

Stay the same

Decrease

Don’t know

www.people1st.co.uk 25


26

Chapter 2 | Workforce Size and Characteristics

The figures also provide some indication about how likely

employers are to change their recruitment model and

employ a greater proportion of core, permanent staff.

They suggest that larger businesses and those with 50+

employees are more likely to think that their permanent

workforce will increase (figure 9), although this is against a

backdrop where those working in the sector as a second

job has actually increased. The figures also support

evidence from interviews that current workforce growth is

mostly likely to be seen in larger businesses rather than

small independents.

Data from Working Futures provides some longer-term

employment projections. According to these figures the

accommodation and food services sector is expected

to reach 2,048,800 by 2020, an increase of six percent

from 2013. This is two percent higher than the projected

increase for the economy as a whole and, if this growth

is realised, would further increase the sector’s importance

for employment across the economy as a whole.

With staff leaving the hospitality and tourism sector, 28

percent of existing staff will need to be replaced. In real

terms this means that the sector’s workforce will increase

by more than a third (34 percent) and an additional

660,200 people will need to be recruited during the next

seven years (2013-2020).

www.people1st.co.uk

These figures once again highlight the impact labour

turnover has on the sector and the staggering amount

of recruitment that will need to be undertaken. They also

illustrate the wasted investment in training and some of

the skills gaps issues that arise; staff are not staying long

enough to become proficient in their jobs owing to the

high percentage of people leaving the sector. The figures

suggest that this turnover is not simply restricted to more

traditional transient occupations; table 11 shows that a

greater proportion of management roles will need to be

replaced than elementary roles. This is very concerning

given that it destabilises the workforce and undermines a

stable business strategy.

Workforce characteristics

Table 11: Employment projections, accommodation and food services, 2013-2020

Expansion demand

(proportional increase)

The workforce characteristics of specific occupations and

industries helps explain why certain parts of the sector

experience higher skill shortages and labour turnover.

This section is split into two parts. The first part will

examine the makeup of different characteristics across

key occupations to better understand how they affect

the recruitment and retention issues that will be explored

in the next chapter. The second part will look at each

characteristic in turn and the extent to which these differ

across occupations and industries.

Replacement demand

(proportional increase)

Total demand

(proportional increase)

1. Managers and senior officials 10% 31% 41%

2. Professional occupations 16% 26% 42%

3. Associate professional and technical

occupations

4. Administrative, clerical and secretarial

occupations

19% 24% 43%

4% 33% 36%

5. Skilled trades occupations -14% 28% 14%

6. Personal service occupations 13% 28% 41%

7. Sales and customer service occupations 5% 25% 30%

8. Transport and machine operatives 0% 30% 30%

9. Elementary occupations 9% 28% 37%

Total 6% 28% 34%

Source: Working Futures 2010-2020 (2008), UKCES/IER/CE, electronic resource


Occupational characteristics

Changes to the size of the different industries are better

understood when looking at changes at an occupational

level. The sector has a wide and diverse range of both

skilled and unskilled jobs, including:

• Managers – senior managers and directors, small

business owners, line managers, supervisors

• Technical staff – includes chefs, travel agents,

croupiers

• Front-of-house staff – includes waiting staff,

bar staff, receptionists

• Back of-house staff – includes housekeepers,

kitchen and catering assistants

• Non-core staff – includes roles found in other sectors

such as marketing, sales and finance

At a headline level, the largest occupational grouping

within the sector is in so-called elementary roles (49

percent), which are largely front-facing, operational roles,

followed by managers, directors and senior officials (16

percent) and skilled trades (14 percent) such as chefs

(table 12).

Table 12: Hospitality and tourism, broad occupational breakdown, 2011

Workforce Size and Characteristics | Chapter 2

Workforce number Percentage

Managers, directors and senior officials 264,300 16%

Professional occupations 14,200 1%

Associate professional and technical occupations 59,800 4%

Administrative and secretarial occupations 98,000 6%

Skilled trades occupations 243,600 14%

Caring, leisure and other service occupations 55,100 3%

Sales and customer service occupations 92,800 6%

Process, plant and machine operatives 29,500 2%

Elementary occupations 827,500 49%

Total 1,684,700 100%

Source: People 1st analysis of the Labour Force Survey 2011, Office for National Statistics

NB: does not include hospitality services

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28

Chapter 2 | Workforce Size and Characteristics

Table 13 shows the number of people working in core

occupations i.e. those that are largely specific to the

sector, such as chefs and waiting staff, between 2007

and 2011. We can see significant differences across

these core occupations. Leisure and theme park

occupations show the greatest increase in numbers (30

percent) over the last five years, reflecting growth in this

area of the sector. Kitchen and catering assistants are

the largest single occupational group, with employee

numbers increasing by seven percent over the last five

years. Chefs and cooks are the second largest group,

followed by waiting staff; these roles have increased by

five percent and 21 percent respectively in the last five

years. This reflects the growth in restaurants and dining

out, and the trend of pubs becoming increasingly foodled.

Given these trends, the number of restaurant and

catering managers has decreased significantly, largely as

a result of a fall in the food and service management and

hospitality services workforces.

From an accommodation perspective, both housekeepers

and accommodation proprietors have fallen significantly.

This reflects the changes to hotels and accommodation

that have seen the closure of smaller, independent hotels

and the continued growth of budget hotels that require

fewer staff. However, fewer housekeeping roles has not

reduced the demand for housekeepers or the need for

more people to consider this profession as a career.

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Profile of occupational

characteristics

This section looks at the workforce characteristics across

a number of core occupations and examines how they

interact and affect recruitment and retention trends.

Kitchen and catering assistants

There are 427,300 kitchen and catering assistants

working in the sector, an increase of seven percent since

2007, making it the core occupation with the largest

workforce. Kitchen and catering assistants is a broad

classification that includes kitchen porters, but also those

that undertake routine, lower-skilled roles in kitchens.

It is characterised by a high percentage of female (66

percent) and part-time workers (67 percent), and there

are a large percentage of students (19 percent) and

workers born outside the UK or the Republic of Ireland

(23 percent). The part-time nature of the role makes it

more attractive for women who are caring for children,

but the low-skill and relatively low paid nature of the role

means it is not attractive for many job seekers. This could

explain why such a large percentage of international

workers are filling this role.

Table 13: Number of people employed in core hospitality and tourism roles across the UK

2007 2008 2009 2010 2011

Five year

change

Kitchen and catering assistants 400,400 382,000 399,300 415,100 427,300 7%

Chefs, cooks 254,500 251,200 258,900 270,800 267,500 5%

Waiting staff 209,500 233,000 224,300 237,700 254,200 21%

Bar staff 203,100 201,300 197,400 202,200 200,300 -1%

Restaurant and catering establishment managers

and proprietors

151,000 155,800 150,600 161,100 ≠ ≠

Publicans and managers of licensed premises 49,200 43,500 45,300 46,700 45,100 -8%

Housekeepers and related occupations 60,400 61,900 57,400 64,200 43,200 -29%

Hotel and accommodation managers and

proprietors

55,400 58,900 58,500 54,300 43,100 -22%

Leisure and theme park attendants 19,500 16,900 22,000 21,900 25,400 30%

Source: People 1st analysis of Labour Force Survey 2011, Office for National Statistics

≠ Owing to a change in the definition of SOC code 1223 (restaurant and catering managers), historical comparisons cannot be made.


Chefs and cooks

Chefs and cooks continue to be the most high profile job

role in the sector, thanks to celebrity chefs and media

coverage. There are currently 267,500 chefs and cooks

working in the sector, which is a five percent increase

since 2007. The vast majority of chefs and cooks work

full-time (71 percent) and it is a largely male occupation,

as only 36 percent of chefs and cooks are women. Chef

roles have traditionally been perceived as intense and

macho, but this is beginning to change with more high

profile female chefs.

32 percent of chefs were born outside of the UK, which

reflects the mix of different cuisines and the fact that

businesses have traditionally recruited chefs from outside

of the UK to cook these specific cuisines.

Waiting staff

With 254,200 people working as waiting staff, this

area has seen an increase of 21 percent since 2007,

and reflects the growth in restaurants and food-led

establishments. Waiting staff are characterised by a high

proportion of:

• Part time workers (70 percent)

• Female workers (70 percent)

• Students (41 percent)

• Workers born outside the UK or the Republic of Ireland

(26 percent)

• Young people (77 percent aged under the age of 30).

The average age is 26.

Many waiting staff are young, full-time students who

work part time to earn additional income. These roles are

largely low skilled, when considering job-specific skills,

but at the same time require good customer service

abilities. They are attractive because of their flexibility and

require limited experience. Working as a waiter is generally

considered a job rather than a career and, as a result,

these roles have low labour retention rates with only basic

training and very little ongoing development.

This picture contrasts sharply with the comparative profile

in London. Waiting staff are employed on a full-time basis

(44 percent), there are fewer students (19 percent), more

male waiters (57 percent) and the majority were born

outside the UK or Republic of Ireland (81 percent). These

figures reflect a broader trend that can be found in larger

towns and cities where there are more restaurants that

require higher skilled staff, often in so-called fine-dining

environments. These staff are often much harder to

recruit, leading employers to hire from throughout the EU

where, along with the United States, waiting service is

considered a career.

Bar staff

Workforce Size and Characteristics | Chapter 2

There are considerably fewer bar staff (200,300) than

waiting staff and workforce numbers have remained

relatively steady (with an overall drop of one percent)

over the last five years. This may be surprising given the

number of pubs that have closed but, as noted earlier,

opportunities have been created in larger pubs opening in

towns and cities.

The need to respond to peak periods (traditionally

evenings and the weekends) means that 71 percent

of employees are part-time. As a result, transient staff

largely fill these roles and some 27 percent of bar staff are

students. This may change as pubs increase their focus

on food and there continues to be a blurring between bar

and waiting staff. Currently, the vast majority of staff (91

percent) were born in the UK and Republic of Ireland.

Housekeepers and related occupations

One occupation that has seen a large drop in numbers

is housekeeping, which has reduced by 29 percent over

five years to 43,200. This largely reflects a reduction in

the number of hotels and more roles being outsourced.

A staggering 95 percent of housekeepers are female and

more than half work part-time. Housekeeping roles have

traditionally been filled by international workers and 21

percent of people currently working in this role were born

outside of the UK.

The professionalism of a housekeeper is being diminished

because of the lack of progression and turnover of

staff at lower levels. Working as a room attendant is

usually the first step on the career ladder, but this role is

characterised by lower pay and high labour turnover. As a

result, fewer people are progressing to become head or

executive housekeepers, which is causing a shortage at

these higher levels.

Hotel and accommodation managers

and proprietors

There are currently 43,100 hotel and accommodation

managers, a drop of 22 percent over the past five years,

which follows a similar trend to housekeeping. There is

an even gender-split among hotel and accommodation

managers, with 48 percent of people undertaking this role

being female. Surprisingly, given the nature of this role, 19

percent work part-time.

While there are relevant professional qualifications

and higher education courses, there is a lack of

structured development pathways to become a hotel

and accommodation manager and, despite the falling

numbers in this profession, it has suffered from skill

shortages for some time. As a way to alleviate these

shortages, employers are recruiting internationally;

www.people1st.co.uk 29


30

Chapter 2 | Workforce Size and Characteristics

16 percent of hotel managers were born outside the UK.

The new UK immigration policy will mean that recruitment

from outside the EU will become increasingly difficult.

Leisure and theme park attendants

There are currently 25,400 leisure and theme park

attendants. It is a very seasonal role and 67 percent work

part-time; 31 percent of whom are students and there is a

very even gender split. In large part this role is not seen as

a career, but is popular for young people as it is perceived

as more fun and exciting than other roles in the sector.

Types of workforce

characteristics

In this section, we examine individual workforce

characteristics separately to compare the way they differ

across occupations and industries. We will take in turn

part-time employment, temporary workers, age, gender,

and ethnic and migrant profiles.

Part-time employment

The sector has always employed a high proportion of

part-time workers, enabling businesses to respond

to fluctuations in customer demand. Nearly half of the

hospitality and tourism workforce is employed on a

part-time basis (48 percent) (table 14), a much higher

proportion than the economy as a whole (28 percent).

This varies by industry, with a higher proportion of part

time workers in hospitality services (57 percent) and

pubs, bars and nightclubs (55 percent). In hospitality

services, many part-time workers are permanent staff who

work around a meal time (for example, school meals),

whereas in the pubs, bars and nightclubs industry they

are recruited to work peak times, such as weekends.

With the increased dominance of the restaurant industry

the trend for part-time work is likely to continue, given it

employs a higher proportion of part-time workers than

across the sector as a whole.

Conversely, the events, gambling and hotel industries

employ a higher proportion of full-time workers (table 14).

Offering part-time work is not a bad thing, but the problem

facing the sector is that people traditionally filling these

roles are largely transient and, therefore, rather than

having a flexible, skilled, part-time workforce, employers

are likely to have significant labour turnover and skills

gaps. The sector needs to consider recruiting more

part-time staff from other labour pools who may also be

seeking the flexibility the sector requires and can offer,

such as working mothers and older people working past

retirement age, rather than students.

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Table 14: Workforce numbers across the UK

Industry Full-time Part-time

Hospitality services 43% 57%

Pubs, bars and nightclubs 45% 55%

Tourist services 50% 50%

Restaurants 50% 49%

Visitor attractions 53% 47%

Food and service management 57% 43%

Self-catering accommodation,

holiday parks and hostels

“ There

57% 43%

Hotels 65% 35%

Gambling 68% 32%

Events 79% 21%

Total 52% 48%

Source: People 1st analysis of Labour Force Survey, 2010-2011,

Office for National Statistics

Note: Figures have been rounded to the nearest whole percentage

is part-time working, but actually that

is an inherent problem for the industry. On one hand

it makes sense because with part-time working you

can be more flexible, however the sting in the tail

for the industry is where is the job security? Where

is the career path? If you want people to have a

long-term career in hospitality, you can’t rely just on

this being a part-time industry.


Peter Martin, Managing Director, Peach Factory

Part-time working also has an effect on recruitment as

many part-time jobs are not as attractive for job seekers

who are looking for higher paid, stable, full-time work.

There is a lot of mainstream media comment from social

and political commentators that the UK’s employment

rate has been largely held up due to the creation of parttime

jobs. Some believe that this is not sustainable in the

medium to long-term as people cannot afford to support

themselves working in these types of jobs.

Between 2010 and 2011 there was an 11 percent

increase in people working in the sector as a second

job (table 15). This shows that despite larger employers

indicating that they are likely to recruit a more stable,

permanent workforce in the future, there is an increasing

reliance on transient staff to fill vacancies.


The Dorchester Collection’s hotels in the UK are

increasing flexibility in their workforce and embracing

the opportunities this presents in developing their core

team, accessing new labour pools and increasing

loyalty and retention in the business.

The need for a flexible workforce

Dorchester Collection owns three hotels in the UK

and employs over 1,100 staff. The three hotels have

different business patterns and occupancy rates can

vary significantly.

In line with trends across the industry, people are

booking much later, often within 48 hours. This

means that the hotels can see a significant change in

occupancy levels within a short space of time.

Sean Wheeler, Area Director of Human Resources,

explains how the company wants to move towards

a more flexible workforce so that it can be more

responsive to changing business patterns and bookings.

“We need to be increasingly agile in our planning to

adapt to business changes and short lead times on

reservations which can impact business levels on a

very short time scale.”

The company is looking to develop a more flexible

workforce in two key ways; by developing a more

flexible core team through development programmes

and succession planning and by exploring flexible

working options and developing a casual workforce

that can supplement the core team when required.

Claire Taylor, Talent Manager at the company,

explained how their trainee and graduate programme

helps to develop existing staff.

“We’re trying to develop a flexible workforce through

our trainee and graduate programmes and while

these are fairly recent, we are already seeing positive

impacts, said Claire.

“For example, where we have had staff shortages

because of a sudden increase in bookings or people

off sick, those trainees have been able to step into any

department and quickly pick up the reins because they

have already been trained and have prior experience.”

Workforce Size and Characteristics | Chapter 2

Case study – increasing flexibility in

the workforce

Changing business patterns and a trend towards shorter lead times for

bookings mean that many hospitality and tourism businesses need an

increasingly flexible workforce to respond to fluctuating levels of demand.

Succession planning is a key part of the Collection’s

strategy and 20 percent of the workforce has been

promoted or moved to new roles in the business in the

last twelve months. Not only does this help to provide

a more flexible workforce, it also offers structured

development pathways, which helps with retention,

especially with generation X and Y who are always

looking for the next opportunity to progress. The

company has seen labour turnover reduce as a result.

“There is a significant cost per employee to recruit

and train them, pay for uniform, payroll, management

time, trainer time and productivity. That’s a big cost so

the more we can retain that talent the more we get a

return on our investment and the more retention we

have in the business, the better service we can offer

the guest,” said Sean.

The company is exploring flexible working options

and has a casual workforce to supplement its core

team. The Collection is exploring how some jobs that

have historically been full-time positions, for example

management, supervisory and chef positions, can be

made more flexible.

Having flexibility in other roles that are particularly

suited to flexible or casual work, such as

housekeeping, food and beverage operations and

front desk, helps the company to match staff levels to

business levels.

Being flexible also develops those who want to

progress in the business to become more mobile and

enabled the business to recruit from new labour pools.

Sean explains that increasing flexibility is important to

meet the future changing patterns of the business, but

ultimately improves loyalty.

“Our business is all about relationships – relationships with

guests and relationships with team members. It is about

balancing the needs of the business with staff needs and

continuing to build those relationships,” said Sean.

“Having a more flexible workforce means we will have

a more loyal workforce. It will also increase staff

engagement and we have identified a direct correlation

between high staff engagement and high guest

engagement – happy staff equals happy guests.”

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32

Chapter 2 | Workforce Size and Characteristics

Table 15: People with second jobs

“ Quite a few more people come into the

industry that have Monday to Friday, nine to five

jobs who are looking to top up their income, so

they are available to work in key periods, like

Friday and Saturday nights.


John Kelly, Head of Group Training,

Restaurant Group

Interviews with employers suggest that part-time work

is likely to grow in the future for some organisations, as

businesses increasingly need flexibility.

“ On a positive note I think there will be a lot

more requirements for flexibility in the workforce.

Currently about ninety-five percent of our

employees are full time permanent employees, but

the business is changing quite significantly… so

we do need a lot more flexibility in our workforce.

That can be a positive thing because then we can

go out to markets we are not necessarily focusing

on at the moment, such as part-time workers,

women returners, casuals, students.


Sean Wheeler, Area Director of Human Resources,

Dorchester Collection

Temporary workers

www.people1st.co.uk

2010 2011

Main job 1,957,700 1,961,600

Percentage

change

0.2%

Second job 102,900 114,300 11.1%

Total 2,060,600 2,076,000 0.7%

Source: People 1st analysis of Labour Force Survey, 2010-2011,

Office for National Statistics

The sector has traditionally employed a high number

of temporary workers, with nine percent of current

staff being temporary, compared to six percent across

the economy as a whole. Temporary workers are most

likely to be employed in seasonal, tourism-related

businesses and are much more common in visitor

attractions (39 percent) and self-catering accommodation,

holiday parks and hostels (18 percent). Interviews with

employers suggest that the use of temporary workers

has declined over recent years, mainly due to changes in

employment law.

Age profile

The sector’s workforce has traditionally been much

younger than across the economy as a whole, with more

than 40 percent of employees currently under 30, while

the whole economy is currently around 25 percent.

Of the 44 percent under 30, 31 percent are aged 16-24

and many of these will be in front-of-house occupations

such as waiting staff, bar staff, and leisure and theme

park attendants (table 16). Given the nature of these

roles, the majority of these are working part-time (71

percent) compared to working full-time (29 percent).

People 1st has highlighted in previous editions of State

of the Nation that the long-term demographic trends

for an older population will make recruiting younger

workers more difficult, but in the short-term the economic

downturn has meant that there is a high percentage of

youth unemployment, which means that younger workers

are filling vacancies.

The sector’s managers are also comparatively young

(see table 16), underlining the opportunities for career

progression in the sector. Given the ongoing skill gaps

for managers (see chapter 4, Workforce Skills and

Development), it would appear that there is a gap

between current skills levels and the breadth of skills and

experience required to work in these roles. Promoting

Table 16: Average age of those working in core

sector occupations

Occupation 2011

Waiting staff 26

Bar staff 28

Leisure and theme park attendants 29

Kitchen and catering assistants 35

Chefs 36

Conference and exhibition managers 37

Publicans and managers of licensed premises 38

Restaurant and catering establishment managers

and proprietors

Catering and bar managers 44

Cooks 45

Housekeepers and related occupations 47

Hotel and accommodation managers

and proprietors

Source: People 1st analysis of Labour Force Survey 2011,

Office for National Statistics

39

49


JD Wetherspoon

JD Wetherspoon has more than 750 outlets throughout

the UK. The company’s customer base is very broad,

which it wanted to reflect in its workforce. Wetherspoons

removed its retirement age in 2006, which has ensured

it can retain valuable skills and experience, and give staff

the choice of working for longer.

Says Mandy Ferries, Head of Personnel and Training:

“Some people’s perception of our industry is that it’s

a youth-oriented one, so while we were very good at

employing students, we’d always struggled to attract

applications from the older age bracket.

“Although we had a retirement age, in practice we

never used it, so early in 2006 we made the decision

to scrap it and have never looked back. We now

receive job applications each month, from people of

all different ages and often recruit trainee managers in

their 50s or 60s.”

Pub managers oversee most frontline recruitment

and they have been trained to ensure they do not

discriminate on age. This includes the revision of all

job specifications so that they are in line with good

practice on age diversity and re-writing the company’s

interviewing skills course.

“Part of the success of the company is due to being

innovative and progressive and this is reflected in our

recruitment process,” said Mandy.

“Employing a diverse workforce of men and women

of all ages benefits individual pubs and the company

as a whole. We actively encourage our pub managers

to recruit staff primarily on personality and attitude, not

making age an issue.”

Wetherspoon offers flexible hours to attract diverse

age ranges. This gives employees a balance between

work and other commitments, and the business

can cover its core hours. Older staff are welcomed

at all levels of the business, from part-time bar work

to managerial posts. Feedback from pubs that

employ older workers suggests they are particularly

stable, with low absence, a strong work ethic and a

commitment to the business. Training is also available

at all levels and Wetherspoon have a number of older

employees who have progressed to manager level.

Workforce Size and Characteristics | Chapter 2

Case study – employing older workers

The following case study highlights the business benefits of recruiting

older workers.

Wetherspoon’s age diverse approach

means it can:

• reflect its broad customer base

• keep pace with demographic change

offer flexible hours to attract staff to cover busy

periods

• increase staff retention levels to above industry

norms

• give frontline managers stability and hardworking

older workers

Source: ‘Employer case studies: Employing older workers for an effective

multi-generational workforce’ Department for Work and Pensions, Feb 2013

This case study was produced by Capita Consulting

as part of the Age Positive initiative in 2011. Further

good practice case studies and the latest practical

advice on managing a multi-generational workforce

can be downloaded free of charge from: www.dwp.

gov.uk/agepositive

www.people1st.co.uk 33


34

Chapter 2 | Workforce Size and Characteristics

Table 17: Employment projections,

accommodation and food services, 2010-2020

young people into management positions is not the only

reason for this; rather it is the lack of consistent support to

train new managers.

Looking to the future, the UK’s population will have a

higher proportion of older people with those aged over

65 increasing from 17 percent in 2010 to 23 percent

in 2035. By 2035, it is projected that the median age

will have risen to 42.2 years, an increase of 2.5 years

in the quarter century after 2010. 7 Despite the current

labour market and high rates of youth unemployment, the

ageing population will mean that successfully targeting

younger workers will become increasingly difficult in the

future and the sector needs to consider other recruitment

pools, such as older workers and working mothers. The

demand from older workers is likely to continue with

people working for longer because of the later payment of

pensions or insufficient money for retirement.

Figure 9: Composition of males and females in core occupations, UK, 2011

Source: People 1st analysis of Labour Force Survey 2011, Office for National Statistics

www.people1st.co.uk

2010 2020

Male 48% 50%

Female 52% 50%

Full-time 42% 45%

Part-time 49% 47%

Self-employed 9% 8%

Source: Working Futures 2010-2020 (2008), UKCES/IER/CE,

electronic resource

Chefs

Publicans and managers of licensed premises

Restaurant and catering establishment managers and proprietors

Leisure and theme park attendants

Hotel and accommodation managers and proprietors

Catering and bar managers

Bar staff

Kitchen and catering assistants

Conference and exhibition managers and organisers

Waiting staff

Cooks

Housekeeping and relate occupations

Male and female employment

The sector employs more women than men (57 percent

of the current workforce is female), although longer-term

projections suggest that this will change and a more

balanced gender profile will appear by 2020 (table 17).

The projections predict there will be an increase in the

proportion of those working full-time, with a reduction in

self-employed and part-time workers.

Analysis by occupation reveals that housekeepers are

almost exclusively female (95 percent) and that there

is a much higher representation of female cooks (72

percent), waiting staff (70 percent), conference and

exhibition managers/proprietors (67 percent), and kitchen

and catering assistants (67 percent) (figure 9). With the

exception of conference and exhibition managers, these

roles are mainly lower skilled or part-time.

Conversely, the vast majority of chefs (seen as higher

skilled than cooks) are male (80 percent) and men make

up three in five (60 percent) publicans. This has larger

implications for chefs, as employers are struggling to

recruit more skilled chefs and attracting more women into

the profession would help alleviate the problem.

The number of women working in the sector exceeds

men, yet when analysed by occupational group women

continue to be under-represented in senior management

positions; men hold 57 percent of these roles (figure 10).

Women are over-represented in lower skilled occupations,

such as administrative and secretarial (72 percent)

and elementary (63 percent) roles. If more women in

operational roles were able to progress into management,

this would help address the problem of recruiting more

supervisors and managers.

80% 20%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

7 Office for National Statistics, 2012, ‘Population Ageing in the United Kingdom, its Constituent Countries and the European Union’

5%

33%

33%

30%

28%

42%

41%

52%

52%

60%

59%

95%

67%

67%

70%

72%

58%

59%

48%

48%

40%

41%

Male

Female


Workforce Size and Characteristics | Chapter 2

Figure 10: Male and female representation across broad occupational groups, UK, 2011

Managers, directors and officials

Professional occupations

Associate professional and technical occupations

Administrative and secretarial occupations

Skilled trades occupations

Caring, leisure and other service occupations

Sales and customer service occupations

Process, plant and machine operatives

Elementary occupations

Source: People 1st analysis of the Labour Force Survey 2011, Office for National Statistics. Does not include hospitality services.

The 2012 People 1st Employer Survey explored the

proportion of women senior managers by size of

business and industry. This showed that, on average,

only 32 percent of sector establishments have female

senior managers.

There are large disparities in the proportion of female

senior managers across each industry compared

to the overall workforce and, as table 18 shows, no

industry is able to boast an equal gender split at a senior

management level. Tourist services has the highest

percentage of female managers overall (43 percent).

28%

33%

40%

37%

47%

57%

65%

71%

86%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

72%

67%

60%

63%

53%

43%

35%

29%

Male

Female

Table 18 also shows the disparity between the proportion

of each industry workforce that is female and the

composition of managers that are female. In this case the

events industry has the least disparity and self-catering

accommodation, holiday parks and hostels the greatest.

The reason for this may be down to the relatively high

number of larger businesses and public sector presence

in the events industry driving equal opportunities, whereas

the majority of self-catering accommodation is made up

of small owner-operators.

14%

www.people1st.co.uk 35


36

Chapter 2 | Workforce Size and Characteristics

Table 18: Proportion of workforce and senior management that is female

Industry

Data is unavailable on the number of women on boards

across the sector. However across all sectors the latest

Female FTSE Report 2012 shows that there has been a

2.5 percent increase in the number of women on FTSE

100 companies to 15 percent. The number of these

companies with no women on their boards has dropped

to 11 while those with more than one woman on their

board has risen to 50. 8

The extent to which sector employers are committed to

having a better gender balance can be gauged by the

latest 2012 People 1st Employer Survey. 55 percent of

hospitality and tourism businesses have an equality and

diversity policy. However this does vary by industry, with

tourist services most likely to have a policy (88 percent),

followed by visitor attractions (71 percent) and hotels (66

percent). Businesses employing over 50 staff are also

more likely to have one (88 percent). It is not surprising

that larger employers have these policies in place, but

anecdotal evidence suggests that both large and small

employers need support to better understand what

practical steps they can take to support more women in

their career progression.

The most common initiatives employers provide to help

women progress include flexible working, which nearly

two thirds of businesses (64 percent) provide (table 19).

Almost one in five businesses offer women’s leadership

training (19 percent), while 15 percent provide gender

awareness training and 14 percent offer networking and

www.people1st.co.uk

Female proportion

of workforce

Average proportion of

female senior managers

Disparity

Tourist services 71% 43% 28%

Food and service management 66% 38% 28%

Hotels 56% 38% 18%

Events 38% 34% 4%

Restaurants 49% 32% 17%

Pubs, bars and nightclubs 54% 30% 24%

Self-catering accommodation,

holiday parks and hostels

60% 30% 30%

Visitor attractions 43% 25% 18%

Gambling 52% 23% 29%

Hospitality and tourism 57% 32% 25%

Source: 2012 People 1st Employer Survey, People 1st analysis of the Labour Force Survey 2011, Office for National Statistics

Table 19: Initiatives to help women progress

% businesses

Flexible working 64%

Women's leadership training 19%

Gender awareness training 15%

Networking aimed at women 14%

Mentoring programmes for women 14%

None 31%

Source: 2012 People 1st Employer Survey

8 The Female FTSE 100 Report, Dr R. Sealy, Prof.S. Vinnicombe, Cranfield International Centre for Women Leaders, 2012

9 The case for Change: Women working in hospitality, leisure, travel and tourism, People 1st, November 2010

mentoring programmes aimed specifically at women.

People 1st research showed that the most effective way

to support women into senior roles is a combination of

these approaches and that more needs to be done to

help employers put these into practice. 9

As part of the Women 1st campaign aimed at promoting

female progression in the sector, a new book ‘The

Little Book of Diversity: A practical guide to supporting

women in the workplace’ is being published. This book

provides businesses with practical advice on how to

overcome barriers to female progression, including how

to successfully implement initiatives that help women

progress in the workplace.


‘The Little Book of Diversity:

A practical guide to supporting

women in the workplace’

Over the past two years, Women 1st has been

working on a practical guide to support women in

the workplace. It provides advice and guidance

to businesses in the service sector who are

looking to increase the number of women in senior

positions and to

support talented

female employees

to achieve their

career ambitions.

The Little Book

of Diversity is

packed with tips,

LBD

practical ideas

and case studies

A practical guide to supporting women in the workplace

from companies

including McDonald’s, PepsiCo, Shell, and IBM

– organisations that actively champion gender

diversity within their management teams and reap

the commercial benefits as a result.

The book builds the business case for having

women in senior roles, getting the commitment of

executive teams to do this, and putting together a

plan to support women throughout an organisation.

For more information go to:

www.women1st.co.uk

The ongoing debate in the media about getting more

female representation at senior levels shows that

hospitality and tourism is not alone in grappling with the

problem. Given the high proportion of women working in

the sector at an operational level, getting more of them

to progress to senior levels is a practical way to alleviate

vacancies within management teams.

“ From a leadership perspective we need

to have more female leaders and address the

barriers preventing females progressing to the top

in the sector. I’m not necessarily talking

board level here, but there is a distinct drop off

from a management level to a leadership level,

not just in our business but across business in

general. I think that’s going to be a changing

dynamic that will be given much more focus

moving forward.


Sarah Lister, Group Talent and Development

Director, Merlin Entertainments Group

Workforce Size and Characteristics | Chapter 2

Ethnic profile

Overall, 85 percent of the hospitality and tourism

workforce describes their ethnicity as white and 15

percent as black and minority ethnic (BME) (compared to

10 percent across the economy as a whole). There are

large variations across industries; 26 percent of those

employed in restaurants are of BME origin, compared

to 17 percent in events and 12 percent in hotels. The

reason for such a large proportion of workers that are

BME origin in the restaurant industry is because of the

large number of Asian and Oriental restaurants and

takeaways. Traditionally, these restaurants have recruited

workers from the same country as their cuisine, but this

ethnic profile may change in future years as a result of any

changes to UK immigration policy (see next section on

migrant profile).

Migrant profile

The sector continues to rely on a high percentage of

migrant workers; 22 percent compared to 14 percent

average across the economy as a whole. The proportion

of migrant workers found in each industry largely reflects

the industry’s ethnic profile, with a higher proportion

working in the restaurant, events and hotel industries

(figure 11).

www.people1st.co.uk 37


38

Chapter 2 | Workforce Size and Characteristics

Figure 11: Proportion of migrant workers across sector industries

Source: People 1st analysis of the Labour Force Survey 2010-2011, Office for National Statistics

Between 2000 and 2010, a number of of EU accession

state workers moved to the UK to work in the sector.

While the number of Eastern European workers has

dropped, there remains a high proportion working in frontof-house

roles and while this has helped fill vacancies, it

poses challenges for customer service and consistency

of written and spoken English. From 2014, Bulgarian

and Romanian nationals will have free movement to work

anywhere in the EU. This is likely to have an impact on the

sector and while no official figures have been produced,

campaign groups such as Migration Watch suggest the

figures could be in the hundreds of thousands. 10 If that is

the case it will help address skills shortages for front line

roles in the short-term, but will not help address the need

for a stable workforce.

According to the 2012 People 1st Employer Survey, 13

percent of sector businesses employ staff from outside

the EU. As may be expected this varies by location

and industry; businesses in London are most likely to

employ workers from outside the EU (27 percent). When

analysed by industry, just over a quarter of hotels (27

percent) and 18 percent of restaurants employ workers

from outside this area. Many of these workers will be

employed as chefs or kitchen staff, working in Asian

and Oriental restaurants and takeaways. However,

changes to Government immigration policy mean that

this percentage will come down and the sector needs to

have a steady pipeline of skilled chefs to replace those

that were previously recruited from outside the EU. If not,

we are likely to see some Asian and Oriental restaurants

and takeaways close or de-skill their operations to make it

easier to recruit chefs.

10 www.migrationwatchuk.org (accessed 6 February 2013).

11 Average of the salaries for the occupations listed in table 20.

www.people1st.co.uk

Restaurant

Events

Hotels

Food and service management

Hospitality services

Gambling

Tourist services

Pubs, bars and nightclubs

Self-catering accommodation, holiday parks and hostels

Visitor attractions

5%

7%

5%

7%

5%

6%

12%

9%

12%

12%

8%

15%

15%

18%

18%

26%

25%

28%

37%

37%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Despite tighter immigration polices some employers

believe that it will become increasingly important that

the sector can recruit talent internationally. By doing so,

hospitality and tourism will be able to compete to meet

the needs of international customers, but also capitalise

on ideas developed elsewhere.

“ We’ve also got to think about recruiting

from the global talent pool, particularly with our

business. Once you get to be a manager or leader

the career opportunities are global, they’re not

local.


Sarah Lister, Group Talent and Development

Director, Merlin Entertainments Group

Average earnings

2011

2010

Recent data shows that the average full-time earnings in

the hospitality and tourism sector were £20,183 per year

(table 20), 11 which is considerably lower than the average

of £32,708 across the economy as a whole. However, it

is important to note that there are considerable variations

across the sector; for example hotel and accommodation

managers and proprietors earn the highest salaries

(£34,915 per year), while bar staff, waiting staff, and

kitchen and catering assistants earn the least (much lower

than the UK average at around £13,000).


Table 20: Average gross pay (full-time workers)

Looking at the figures in table 20, it is notable that a

number of salaries have fallen over the past year, which

probably reflects the more challenging market conditions

that are seeing costs increase and margins decrease.

What is surprising given the ongoing skill shortages for

these occupations is that salary levels for chefs and

managers have actually fallen. As a result this might

make it even more challenging to find skilled chefs and

underlines the problem of recruiting to management

positions.

Workforce Size and Characteristics | Chapter 2

2011 2012 Proportional change

UK economy average 32,691 32,708 0%

Hotel and accommodation managers and proprietors 37,025 34,915 -6%

Conference and exhibition managers and organisers 30,923 29,866 -3%

Leisure and travel service occupations n.e.c. 23,623 26,098 10%

Restaurant and catering establishment managers

and proprietors

24,210 25,091 4%

Publicans and managers of licensed premises 25,017 24,644 -1%

Catering and bar managers 21,517 21,494 0%

Chefs 19,813 19,606 -1%

Housekeepers and related occupations 16,446 16,961 3%

Cooks 16,585 16,536 0%

Other elementary services occupations n.e.c. 15,181 14,387 -5%

Leisure and theme park attendants 14,555 13,946 -4%

Kitchen and catering assistants 12,777 13,188 3%

Bar staff 12,722 13,062 3%

Waiters and waitresses 12,664 12,763 1%

Hospitality and tourism average* 20,218 20,183 0%

Source: Annual Survey of Hours and Earnings 2011-2012, Office for National Statistics

*Average of listed occupations

Recruiting staff to the sector at competitive rates of pay

is therefore an ongoing issue. For certain occupations,

employing fewer, less transient staff at better rates of

pay could benefit both workers and businesses alike.

Recent research has shown that three quarters of staff

working in accommodation and food services, hotels

and restaurants earn below the ‘living wage’. 12 However,

although there is a suggestion that increasing wages

to this threshold would result in an initial fall in labour

demand, particularly the demand for young people, these

employees would be replaced by more experienced,

older workers, albeit in smaller numbers. This could result

in a more stable workforce.

12 Modelling demand for low skilled/low paid labour: exploring the employment trade-offs of a living wage. Rebecca Riley. National Institute of Economic and Social Research

www.people1st.co.uk 39


40

Chapter 2 | Workforce Size and Characteristics

Looking to the future – possible

workforce characteristics

A number of areas were highlighted during research that

highlight workforce characteristics and how these might

change in the future.

A greater emphasis on a core,

professional workforce

The sector will place more emphasis on recruiting and

retaining a core, professional workforce. These people

will need higher skill sets and will have been recruited

onto well-defined development pathways that offer them

a career in the sector. They will largely be full-time workers

and of an older age.

Recruiting from a more diverse

labour pool

There will still be a need for a part-time flexible workforce,

but it will be more stable as fewer transient staff will be

www.people1st.co.uk

employed as recruitment will take place from a broader

labour pool that includes:

• Those aged over 65 who will be working to increase

their income after formally retiring

• Women with primary childcare responsibilities, who are

working to supplement incomes

• People with multiple part-time jobs.

As a result retention will be higher and skills gaps will fall

as flexible staff retain the skills.

Greater gender balance at

management level

A more stable workforce and a greater focus on

supporting women in their careers will mean that there

is a more even gender balance in those working in

management roles. This will help address skill gaps at this

level, but it is likely to help professionalise managers as

a whole as employers place more emphasis on clearer

development pathways as they focus on recruiting and

retaining a more stable workforce.


Summary

• The sector’s workforce accounts for more than two

million jobs and continues to grow at a higher rate than

the overall economy. Projections suggest this trend will

continue and that by 2020 the sector’s workforce will

have grown by as much as six percent.

• The restaurant industry is growing in importance and

employs the largest workforce, while the pubs, bars

and nightclubs workforce now appears to be stabilising

as many pubs and bars continue to diversify their

offering and become increasingly food-led.

• The outlook among employers was optimistic with

more than a third of sector businesses predicting an

increase in workforce size in the coming year. However

the nature of employment and the characteristics of the

workforce could potentially undermine stability in those

industries experiencing employment growth.

• Recent trends have shown increasing numbers

of people working in the sector as a second job

and continuing high levels of part-time or casual

employment. Despite high rates of unemployment

businesses report that they struggle to fill these

positions because they are not financially viable for the

unemployed.

• Driven in part by these trends, average earnings in

the hospitality and tourism sector remain lower than

the economy average, with pay rates falling in some

occupations as the market remains challenging. This

exacerbates the problem of recruiting skilled staff,

particularly to chef and management positions.

• The sector has always employed a high proportion of

part-time workers, higher than the economy average.

People traditionally filling these roles are transient,

meaning that employers often experience significant

labour turnover and skill gaps as a result. Accessing

different labour pools may engage workers who need

flexibility, but who also want stability.

• The transient nature of the sector’s workforce is

highlighted by the fact its age profile is much younger

than other sectors, with two in five employees aged

under 30. Often due to rapid progression and high

rates of labour turnover, managers are comparatively

young and may lack the higher level skills and

experience to excel in these positions.

• Despite the higher proportion of female workers and

the need to recruit more managers in the sector overall,

women continue to be under-represented in senior

management positions, where only one in three sector

employers have female senior managers. This trend

highlights the need for better progression routes into

management positions.

Workforce Size and Characteristics | Chapter 2

• The sector continues to rely on a high percentage of

migrant workers; on average one in five are migrants,

higher than the economy average. Employers believe

that it will become increasingly important to be able to

recruit talent internationally, for example chefs, but the

ability to do so will depend on immigration policy.

• However, as a way of tackling the need for skilled

management roles in the short-term employers are

increasingly opting to recruit from overseas instead of

grasping the issue of progression and development

from within the business.

Implications for employers

• Historical trends in employment have led to a largely

transient workforce, which is relatively young. As a

result there are higher turnover rates and an ongoing

need for recruitment and introductory training. This

represents a significant cost to the business and has a

bearing on profitability.

• There should be a greater emphasis in future on

recruiting and retaining a core, professional workforce

that requires higher skills and development pathways,

especially in management roles and to extend these

opportunities to women who represent a majority in the

workforce.

• A part-time flexible workforce will still be needed, but

this should take advantage of more diverse yet flexible

labour pools, including those over 65, people working

in the industry as a second job, and women returning

to work, and the experience and stability they can

potentially bring to the business.

• This represents an opportunity to look beyond

traditional types of recruits and to consider new

roles, perhaps those with more generic business

skills and those with different sector or professional

backgrounds.

www.people1st.co.uk 41


3

Recruitment

and Retention


Introduction

With the current high rates of unemployment, we would

expect it to be easier for employers to recruit staff

and for existing employees to be less likey to change

jobs because of the fragile market. So how are sector

employers currently recruiting and retaining their staff? In

this chapter we will look at vacancy levels, the difficulties

faced when filling specific posts, and the reasons behind

the sector’s recruitment difficulties. We also explore labour

turnover and the extent to which the current economic

climate has impacted staff retention.

Vacancy levels

As a result of continued growth and the need to replace

existing staff, the sector continues to advertise vacancies

in large numbers. At the time of the UK Employer Skills

Survey between March-July 2011, 16 percent of

hospitality and tourism employers had a vacancy (table

21). This is higher than across the UK economy as a

whole, which currently stands at 12 percent and has

fallen slightly from 17 percent in 2009, 13 probably

owing to the fall in labour turnover and fewer skilled

staff moving jobs.

Table 21: Recruitment profile, UK

Table 22: Hospitality and tourism employers with vacancies

Employers with vacancies

Recruitment and Retention | Chapter 3

Overall, 25,500 hospitality and tourism establishments

across the UK reported vacancies. Table 22 shows this

was highest in Scotland (18 percent of establishments)

and lowest in Northern Ireland (11 percent), which

may be surprising given the declining workforce in

Scotland and the growth Northern Ireland is experiencing

(see chapter 2).

Vacancies were most commonly reported in the

following industries:

• Hotels – 3,100 employers (24 percent)

• Pubs, bars and nightclubs – 7,700 employers

(15 percent)

• Restaurants – 12,300 employers (17 percent)

These vacancies are most commonly for elementary

staff (65 percent), skilled trades (27 percent), and sales

and customer service staff (six percent). Given the

picture emerging in chapter 2, a large proportion of these

elementary roles are part-time and low skilled, making

them unattractive to jobseekers.

% of employers

with vacancies

% of employers with

vacancies (whole economy)

England 21,200 16% 12%

Scotland 2,400 18% 11%

Wales 1,400 16% 11%

Northern Ireland 500 11% 9%

Total 25,500 16% 12%

Source: People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011

Hospitality and tourism Whole economy

Employers with vacancies 16% 12%

Employers with hard-to-fill vacancies 6% 4%

Employers with skill shortage vacancies 4% 3%

Hard-to-fill vacancies as a proportion of vacancies 26% 23%

Proportion of vacancies that are skill shortage vacancies 17% 16%

Source: People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011

13 Cited from the UK Commission for Employment and Skills’ 2009 National Employer Skills Survey which, although not directly comparable, provides a strong indication of trends.

www.people1st.co.uk 43


44

Chapter 3 | Recruitment and Retention

Job posts and applications

In collaboration with Caterer.com, People 1st produces a

quarterly Hospitality Employment Index that provides more

recent recruitment figures. The index is based on data

gathered through the Caterer.com website.

The number of job advertisements has increased since

2009; however they fell by eight percent in 2012 when

compared to 2011. While recruitment levels have remained

high, with a total of 159,700 jobs advertised during 2012,

it does appear that the market is beginning to level out

following low consumer spending and unfavourable

economic forecasts (see figure 12). We might have also

been expecting to see a rise in recruitment prior to the

London 2012 Olympic and Paralympic Games but this

did not happen, which suggests that recruitment was very

localised and that employers managed any extra demand

using existing staff.

This decrease in jobs posted has also had an effect

on the number of applications for vacancies. Figure 13

shows that applications for vacancies peaked in quarter

1 of 2012, and that there has been a natural fall in

applications since in response to the reduced number

of advertisements. In total, 3,267,200 applications were

received during 2012.

However, demand for work in the sector is at its highest

level since 2009, with an average of 20 applications per

job advertisement, compared to 15 in 2009, 17 in 2010,

and 19 in 2011. This suggests that while recruitment

activity is slowing down, competition for jobs in the sector

is higher than it has been historically owing to the current

economic conditions.

Figure 12: Jobs posted on Caterer.com 2009-2012

60,000

50,000

40,000

30,000

20,000

10,000

0

Source: Hospitality Employment Index, Caterer.com and People 1st, 2009-2012

14 A hard-to-fill vacancy for the purposes of this survey means any vacancy that an employer considers hard-to-fill

www.people1st.co.uk

Occupational trends

As table 23 shows, there are significant variations in job

postings by occupation, with the highest numbers of

roles available for restaurant managers and a variety of

chef occupations. The demand for restaurant managers

may reflect the growth in the restaurant sector and a large

number of chef vacancies remain unfilled.

By comparing applications against advertisements, it is

easier to see why some vacancies are harder to fill. The

occupations with fewer applicants are consistent with

those vacancies that are identified as hard-to-fill from

other survey results later in this chapter. Waiting staff

attract the most applications (71 per advertisement),

followed by reception/concierge (67 per advertisement)

and housekeeping (64 per advertisement) (table 24).

At the other end of the scale, more specialised skilled

roles such as pastry chefs and kitchen managers

attracted the fewest applications (six per advertisement).

Hard-to-fill vacancies

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Six percent of hospitality and tourism establishments

reported having a vacancy they considered hard-to-fill at

the time of the survey, slightly higher than the UK average

of four percent. 14 Overall there were 15,200 hard-to-fill

positions, representing just over a quarter of all vacancies

(26 percent).


Figure 13: Applications made, 2009-2012

1,000,000

900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Source: Hospitality Employment Index, Caterer.com and People 1st, 2009-2012

Table 23: Top ten job postings 2012

Q3 2010

Q4 2010

Q1 2011

Q2 2011

The 2012 People 1st Employer Survey further

investigated hard-to-fill vacancies and asked employers

whether they had had problems filling specific roles over

the previous 12 months (as opposed to at the time of the

survey) and which occupations they found most difficult

to recruit. Just over one in ten hospitality and tourism

employers (11 percent) had experienced vacancies

that were hard-to-fill in the previous twelve months. In

Scotland and Wales this figure dropped to seven percent

and in Northern Ireland nine percent. The larger the

business, the more likely they were to have experienced

vacancies that were hard-to-fill, which is unsurprising

given they are recruiting for more staff.

Recruitment and Retention | Chapter 3

Ranking Job role Advertisements Proportional change in number of advertisements (2011-2012)

1 Restaurant management 27,686 -7%

2 Chef de partie 19,119 1%

3 Sous chef 14,119 -1%

4 Head chef 10,312 -6%

5 Reception/concierge 8,358 -13%

6 Sales and marketing 7,494 -17%

7 Chefs 6,928 -10%

8 Pub management 5,432 7%

9 Hotel management 5,158 -14%

10 Waiting staff 4,887 -8%

Source: Hospitality Employment Index, Caterer.com and People 1st, 2011-2012

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Hard-to-fill vacancies by industry

When analysed by industry, hotels (16 percent)

and restaurants (13 percent) are most likely to have

experienced difficulties filling vacancies in the previous

twelve months, while just three percent of tourist

services and visitor attractions reported having hard-to-fill

vacancies (table 25). Retention rates in tourist services

are better, which means that employers in this industry do

not need to recruit as many staff, while the mainly lowskilled,

seasonal jobs in visitor attractions are appealing

to students and other young people, which makes them

easier to fill.

www.people1st.co.uk 45


46

Chapter 3 | Recruitment and Retention

Table 24: Competitiveness by job role

www.people1st.co.uk

Advertisements Applications

Applications per

advertisement

Waiting staff 4,887 347,796 71.2

Reception/concierge 8,358 557,476 66.7

Housekeeping 3,312 210,726 63.6

Porter 929 57,177 61.5

Pub/bar staff 1,234 71,955 58.3

Engineer 779 32,805 42.1

Catering staff 2,450 101,840 41.6

Events manager 1,271 41,507 32.7

Hotel management 5,158 158,015 30.6

Other 4,411 133,872 30.3

IT systems 134 3,584 26.7

Food and beverage management 3,316 77,508 23.4

Reservation manager 1,105 25,715 23.3

Conference/banqueting management 1,377 31,121 22.6

Finance 2,209 44,207 20.0

Bar management 4,384 85,917 19.6

Leisure staff 798 15,431 19.3

Executive chef 681 13,077 19.2

Catering management 3,847 69,447 18.1

Sommelier 413 7,452 18.0

Human resources 1,257 21,930 17.4

Training 402 6,923 17.2

Operations manager 2,808 48,352 17.2

Commis chef 3,837 65,773 17.1

Development chef 201 2,964 14.7

Chef manager 1,697 23,860 14.1

Restaurant management 27,686 380,502 13.7

Pub management 5,432 72,517 13.3

Sales and marketing 7,494 93,669 12.5

Chef 6,928 80,005 11.5

Head chef 10,312 115,198 11.2

Leisure management 1,245 13,523 10.9

Sous chef 14,119 99,267 7.0

Chef de partie 19,119 120,352 6.3

Pastry chef 4,024 24,056 6.0

Kitchen manager 2,110 11,687 5.5

Source: Hospitality Employment Index, Caterer.com and People 1st 2012


Table 25: Proportion of employers with hard-to-fill

vacancies in previous 12 months

Industry

Employers with

hard-to-fill

vacancies

Hotels 16%

Restaurants 13%

Pubs, bars and nightclubs 10%

Food and service management 10%

Self-catering accommodation, holiday

parks and hostels

Hard-to-fill vacancies by occupation

As table 25 shows, the reason such a high percentage of

food-orientated industries are reporting hard-to-fill vacancies

is largely because of the demand for chefs, which we will

examine in more detail in the section on skill shortages.

7%

Events 6%

Gambling 5%

Tourist services 3%

Visitor attractions 3%

Source: 2012 People 1st Employer Survey

Figure 14: Main reasons given for having hard-to-fill vacancies

Low number of applicants with the required skills

Low number of applicants with the required

attitude, motivation or personality

Job entails shift work/unsociable hours

Poor terms and conditions (e.g. pay) offered for post

Not enough people interested in doing this type of job

Lack of work experience the company demands

Remote location/poor public transport

Low number of applicant generally

Lack of qualifications the company demands

Recruitment and Retention | Chapter 3

Table 26: Hard-to-fill vacancies by occupation

Occupation

Businesses with

hard-to-fill

vacancies

Chefs 39%

Cooks 14%

Kitchen and catering assistants 11%

Bar staff 7%

Restaurant and catering establishment

managers and proprietors

Reasons for hard-to-fill vacancies

7%

Waiting staff 5%

Catering and bar managers 5%

Housekeepers and related

occupations

Publicans and managers of licensed

premises

Source: 2012 People 1st Employer Survey

Source: People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011

6%

2%

1%

The main reasons behind hard-to-fill vacancies appear

to be related to the quality of applicants (figure 14), in

particular a low number of applicants with the required

skills (32 percent) and the attitude, motivation or

personality (21 percent) of those that do apply.

12%

11%

13%

18%

18%

0% 5% 10% 15% 20% 25% 30% 35%

21%

20%

32%

www.people1st.co.uk 47


48

Chapter 3 | Recruitment and Retention

“ The big challenge hiring – getting the right

sort of people. It’s a whole package and you

need people with interpersonal skills who are

motivated, who want to be engaged, and who

want to work in a team – people who like people.

And then in a sense you can teach the skills.


Peter Martin, Managing Director, Peach Factory

Despite the high levels of unemployment across the UK,

18 percent of employers with hard-to-fill vacancies believe

there are insufficient numbers of people interested in

doing the types of work available.

“ We still have this problem with recruiting

enough people even with the numbers of

unemployed, although this is going to vary within

different parts of the business.


Martin Couchman, Deputy Chief Executive, BHA

Nearly one in five employers cite unsociable hours

and shift work as a reason they struggle to recruit to some

positions, along with poor terms and conditions

(18 percent).

Addressing this issue remains highly problematic and if

the sector cannot recruit more easily in a period of high

unemployment, then future recruitment prospects remain

bleak. As the Government’s Welfare to Work programme

highlights, helping unemployed people into work is

challenging and the situation is complex. From a social

perspective some people find it very difficult to gain the

confidence and employability skills required to find work,

while in other cases some have no motivation to find work

and have been unemployed for some time. On another

level, the welfare and skills system itself it still not working

as effectively as it could to ensure those seeking work

have the skills and attributes that employers are seeking.

Finally, as we saw in chapter 2, the sector is often not

providing full-time jobs, meaning it is not financially viable

for many people to apply for these types of roles.

www.people1st.co.uk

Getting people into work

People 1st is working with a large number of

businesses to support unemployed people into work.

Nearly 50 large employers have signed up to the

‘Employer Promise’, which is a commitment from

employers to interview or offer an assessment

centre place to anyone who has successfully

completed the Employment 1st pre-employment

training programme.

People 1st worked with employers to develop

Employment 1st, a sector-specific pre-employment

programme that addresses the range of

employability skills and behaviours required in new

entrants. This stemmed from the frustration many

employers felt when job seekers were applying

for posts without the necessary skills and learning

providers were delivering generic programmes.

People 1st is now working with many learning

providers and employers to run training sessions using

Employment 1st, broker job opportunities, and run

selection centres to help employers recruit new staff.

To complement this work, People 1st has recently

launched the Act NOW! campaign in partnership

with the Hospitality Guild.

This campaign will showcase career development

opportunities in the hospitality industry to

address skills gaps, and is designed to raise

both employers’ and learners’ awareness of the

opportunities apprenticeships offer and help

20,000 people gain paid employment.

The Act NOW! campaign is designed to encourage:

• Employers to provide pre-employment training

to unemployed people, recruit unemployed

people who have undertaken pre-employment

programmes, and provide apprenticeships and

career development opportunities

• Unemployed people to undertake pre-employment

training or sign up for an apprenticeship and

undertake a career in the sector

• Providers to work with People 1st and employers

to provide quality pre-employment training and

apprenticeships.

The campaign focuses on five practical steps that

employers, learners and training providers can take,

either as a ‘first time’ engagement or to increase

participation; from pre-employment to Higher

Apprenticeships.

For more information visit

www.hospitalityguild.co.uk/ActNOW or email

apprenticeship@hospitalityguild.co.uk


Skills that applicants lack

Almost two thirds (65 percent) of hard-to-fill vacancies in

the sector are due to skill shortages, equivalent to 9,800

vacancies, although only a relative small percentage of

establishments (four percent) are affected (table 27).

The majority of skill shortage vacancies are for elementary

staff (43 percent) and skilled trade occupations (30

percent). Figure 15 presents a list of skills applicants are

reported to lack. These can largely be grouped into

three themes:

• Job-specific skills, which largely includes culinary skills

for chefs

• Inter-personal skills or softer skills, such as

communication, customer service and team working

• Management and leadership skills.

The types of skills that are difficult to recruit have remained

consistent in varying degrees over the past decade.

Figure 15: Skills difficult to find among applicants

Job specific

Planning and organising

Oral communication

Customer handling

Team working

Technical or practical

Problem solving

Strategic management

Numeracy

Literacy

Written communication

Foreign language

Office administration

16%

Recruitment and Retention | Chapter 3

Table 27: Skill shortage vacancies

Number of skill shortage

vacancies

Skill shortage vacancies

as a % of all vacancies

Skill shortage vacancies

as a % of hard-to-fill

vacancies

Proportion of

establishments with skill

shortage vacancies

Source: People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011

29%

31%

35%

34%

37%

Hospitality

and tourism

All economy

9,800 103,500

Source: People 1st analysis of the Employer Skills Survey,

UK Commission for Employment and Skills 2011

0% 10% 20% 30% 40% 50% 60% 70%

43%

47%

51%

50%

49%

56%

64%

17% 16%

65% 72%

4% 3%

www.people1st.co.uk 49


50

Chapter 3 | Recruitment and Retention

Chefs

Chefs have always been difficult to recruit and there has

been an increased demand across the sector as the pub

industry has focused on food and the restaurant industry

has continued to grow. The increasing appreciation of

food and consumer awareness of what they are eating

has meant that chefs need a greater array of skills than

ten years ago.

However, there are insufficient numbers of full-time chef

students moving through the college system and the

funding cuts colleges face mean that some institutions

are removing chef provision from the curriculum

altogether. In addition, some colleges are seeking to drop

the full-time Diploma in Professional Cookery because of

funding cuts, which is a problem as the qualification has

done much to renew confidence in the college sector

following a decade of inconsistent delivery of National

Vocational Qualifications. The Diploma was developed in

full consultation with employers and chef associations,

and its set content and practical end test ensures

consistency, regardless of the college.

“ I think recruiting chefs is an ongoing

challenge because of the competition in the

industry. It’s about that development, that

growth, that moving people around, and using the

resources we have got for chefs.


Sean Wheeler, Area Director of Human Resources,

Dorchester Collection

Finally, changes to UK immigration policy mean that it is

no longer cost effective to bring skilled chefs into the UK

from outside the European Union. This is affecting Asian

and Oriental restaurants the most as it effectively means

that they need to recruit chefs from within the UK or

retain their existing staff. As a result of these changes,

a number of larger businesses have put their expansion

plans on hold.

Developing a pool of UK-trained Asian and Oriental

chefs will take time given there has never been an

infrastructure to support this as there is for Anglo-French

cuisine, and the industry itself has never been seen as a

career destination. Some of these challenges are being

addressed through the development of a network of

Asian and Oriental Centres of Excellence.

www.people1st.co.uk

Asian and Oriental Centres

of Excellence

The Hospitality Guild launched five pilot Centres of

Excellence in Asian and Oriental cuisine in March

2012. The centres aim to help tackle the skills

shortages employers face as a result of

the immigration cap that restricted their ability to

recruit skilled chefs from outside the European

Union (EU).

The five centres in Central and West London,

Birmingham, Leeds and Manchester have been

created to recruit and train UK nationals to

become chefs working in Asian and

Oriental cuisine.

The pilot has successfully helped apprentices find

work in Asian and Oriental businesses, although

it has faced many challenges and many more

apprentices are required.

It has encountered two key issues:

• People do not naturally consider the Asian

and Oriental restaurant industry as a career

destination

• English not spoken in the kitchens is a barrier

to recruiting staff from another background.

On the back of an evaluation of the pilot, these

centres are being widened and activities to

attract more people into the industry have been

launched, such as promoting career opportunities

through the Hospitality Guild’s Act NOW!

apprenticeship campaign, a skills competition,

and a specialist junior chefs’ academy.

The centres will not address the shortfall in skilled

chefs changes to immigration policy have caused,

but they are an important step forward in helping

provide a more sustainable way to attract and

recruit skilled chefs into the industry.

For more information visit:

www.hospitalityguild.co.uk/asian-oriental


Table 28: Recruitment in the last 12 months by industry

Recruitment and Retention | Chapter 3

Industry School leavers College leavers University leavers Unemployed

Hotels 29% 37% 29% 47%

Restaurants 27% 30% 27% 38%

Pubs, bars and nightclubs 20% 30% 31% 36%

Food and service management 20% 18% 18% 30%

Self-catering accommodation, holiday

parks and hostels

Interpersonal skills

Employers have long noted that many applicants lack

interpersonal skills, such as communication, reasonable

standards of personal appearance, and turning up

on time. While many employers believe that this says

something about the next generation of young people

seeking work, it is also partly down to the people the

sector is able to attract into a career. Hospitality and

tourism has traditionally offered other sectors little

competition when it comes to attracting more able

candidates because it has not offered transparent,

structured career prospects and highly competitive

salaries. Employers have welcomed Eastern European

workers because they have superior employability skills,

and it is notable that many of those employed

are educated to higher levels and have better

interpersonal skills.

Work readiness of those entering

the sector

The 2012 People 1st Employer Survey asked businesses

about the employment status of applicants they had

recruited over the last twelve months. More than two

thirds (36 percent) of businesses had recruited people

who had previously been unemployed, while 27 percent

had recruited college leavers, 25 percent university

leavers, and 22 percent school leavers (table 28).

9% 10% 12% 18%

Events 8% 11% 19% 13%

Gambling - 16% 10% 43%

Tourist services 7% 14% 17% 17%

Visitor attractions 27% 27% 25% 31%

Total 22% 27% 25% 36%

There are significant differences in the type of applicants

the industry recruits, for example:

• 29 percent of hotels and 27 percent of restaurants

have recruited school leavers, compared to just seven

percent of tourist services

• College leavers are most likely to be employed in

hotels (37 percent), restaurants, and pubs, bars and

nightclubs (30 percent), and are least likely to be

employed in self-catering accommodation, holiday

parks and hostels (10 percent)

• University leavers are most likely to be employed in

pubs, bars and nightclubs (31 percent), followed by

hotels (29 percent) and restaurants (27 percent)

• Almost half of hotels (47 percent) have hired

unemployed applicants in the last twelve months,

followed by gambling (43 percent).

www.people1st.co.uk 51


52

Chapter 3 | Recruitment and Retention

Figure 16: Work readiness

Unemployed

University leavers

College leavers

School leavers

Source: 2012 People 1st Employer Survey

Work readiness

Employers were asked to rate how well prepared different

types of recruits were. As figure 16 shows, university and

college leavers were felt to be the most prepared, with

unemployed and school leavers the least.

The lack of work readiness varied by the type of

entrant (table 29). For example, school leavers and

the unemployed are thought to have a poor attitude or

motivation (as stated by 48 percent of employers for

school leavers and 64 percent for the unemployed). Of

most concern for college and university leavers is their

lack of work/life experience (52 percent for college and

42 percent for university leavers).

Table 29: Why applicants are poorly prepared

Poor attitude/personality or lack of motivation

(e.g. poor work ethic, punctuality, appearance, manners)

Lack of working world/life experience or maturity

(including general knowledge)

Lack of technical, practical or job specific skills

or competencies

www.people1st.co.uk

Management and leadership

Chapter 2 showed that managers are being promoted

much earlier than in the past, largely because a stable

workforce is lacking at an operational level to progress

to higher level posts. Despite making sure that career

pathways are in place, this illustrates that many employers

are not currently providing sufficient development and

support to people who want to progress their careers

in supervisory and management roles. While there are

a large number of students studying sector-specific

courses in higher education, the many graduate trainee

programmes that operated in the past to ensure that

graduates receive the appropriate support and experience

once they enter the sector have disappeared because of

cost cutting.

While many of the hard-to-fill roles have been difficult to

recruit for some time, new areas are emerging, specifically

in the areas of professional waiting staff and housekeeping.

School

leavers

College

leavers

University

leavers

Unemployed

48% 46% 38% 64%

46% 52% 42% 32%

20% 17% 30% 15%

Lack of common sense 19% 15% 8% 9%

Lack of general soft skills

(e.g. team working, communication, problem solving skills)

15% 10% 13% 6%

Lack of literacy/numeracy skills 9% 8% N/A 6%

Poor education 2% 1% N/A 5%

Source: 2012 People 1st Employer Survey

0% 20% 40% 60% 80% 100%

Very well prepared

Well prepared

Poorly prepared

Very poorly prepared

Don’t know


Waiting staff

As chapter 2 explored, in addition to the large number

of lower-skilled, transient food and beverage roles, there

is also a need for higher skilled professional waiting

staff. While colleges deliver full-time food and beverage

courses, many students undertaking these courses

are chef students gaining an insight into front-of-house

service. The creation of a ‘National Waiters’ Day’ and the

development of dedicated centres of excellence for food

and beverage service to deliver high quality training are

important steps in the right direction.

Housekeepers

While the trend continues for fewer housekeeping staff,

housekeepers remain a difficult role to recruit and this is

likely to get worse. The problem is most acute for senior

staff, as experienced housekeepers retire and lower level

room attendants continue to have high rates of labour

turnover or jobs are outsourced. While dedicated career

campaigns provide a much needed spotlight on this

important and often neglected occupation, there need to

be clearer development pathways that help develop the

skills of those who are attracted to work in this profession.

“ The fact that we’re struggling to find people

wanting to pursue a career in housekeeping

shows that we’ve got more work to do to promote

this as a viable career option. At the moment,

though, it’s still seen as a stop-gap job before

moving into a new role. We need to work harder

to promote the opportunities available and help

people see how they can gain a great career with

a lot of responsibility.


Anne Britton, UKHA National and London and

South East Chairman

Impact of hard-to-fill and skill

shortage vacancies

Having discussed the extent of the problem, what impact

do hard-to-fill vacancies and skill shortages have on a

business? The biggest impact appears to be on the rest

of the workforce, who have to compensate for vacancies

not being filled (table 30). This in turn can result in more

staff leaving, which perpetuates a cycle of high turnover

and hard-to-fill vacancies.

Nearly half of businesses reporting significant recruitment

difficulties also suggest this has an impact on being able

to meet customer service expectations, which may partly

explain the high number of employers reporting that their

staff lack customer service skills (see chapter 4).

Recruitment and Retention | Chapter 3

Table 30: Impact of hard-to-fill and skill

shortage vacancies

Percent

Increase workload for other staff 82%

Have difficulties meeting customer

services objectives

46%

Experience increased operating costs 42%

Have difficulties meeting quality standards 41%

Delay developing new products or services 37%

Have difficulties introducing new

working practices

36%

Lose business or orders to competitors 36%

Withdraw from offering certain products or

services altogether

28%

Outsource work 19%

Have difficulties introducing technological change 17%

Source: People 1st analysis of the Employer Skills Survey,

UK Commission for Employment and Skills 2011

Employers commonly increase their advertising and

recruitment spend to address these recruitment difficulties

(37 percent of employers with recruitment difficulties) and

use new recruitment methods or channels (29 percent).

Interviews with employers suggest that businesses are

increasingly using online tools to screen and recruit

applicants alongside social media sites such as Twitter

and LinkedIn. Chapter 5 explores further how future

trends may change the nature of recruitment practices.

“ The traditional way of recruiting, through

magazines and paperwork, is well gone now. It’s

all online now, and it’s all through networking

basically. We are doing some work at the moment

to develop our website so it can be used on an

app or a mobile. This will mean that you can

apply online for a job via your phone. We are also

looking at doing some Twitter campaigns and

having our own Facebook page.


Sean Wheeler, Area Director of Human Resources,

Dorchester Collection

While employers are seeking different recruitment

practices, evidence suggests that they are focusing more

on trying to retain staff.

www.people1st.co.uk 53


54

Chapter 3 | Recruitment and Retention

Labour turnover

The labour turnover rate across the hospitality and tourism

sector continues to fall with the latest data showing a

turnover rate of 20 percent, a significant fall from 31

percent for the whole sector in 2009. Staff reluctance

to move employers during the current economic climate

may largely explain this, however anecdotally more

employers appear to be focusing on how they engage

and retain their staff, recognising that the cost of recruiting

and training new employees can be significant. This

is a positive trend as it helps maintain skills within the

workforce and reduces unnecessary recruitment costs

and pressure on other staff.

Northern Ireland has the lowest labour turnover rate of

16 percent, followed by Scotland at 17 percent, and

England and Wales at 20 percent. Given low labour

turnover rates in Scotland and a decreasing workforce,

it is surprising that it has such a comparably high rate of

hard-to-fill vacancies.

Across the industries, self-catering accommodation,

holiday parks and hostels have a turnover rate at eight

percent, followed by tourist services at nine percent.

These industries are fairly seasonal and the figures

suggest that staff in the main stay the full season. In

contrast pubs, bars and nightclubs have a higher turnover

rate of 26 percent, followed by restaurants (23 percent)

and hotels (20 percent) (table 31). There are high rates

of transient staff in these industries, partly to respond to

fluctuating demand and also because employers find it

easier to attract transient workers to fill vacancies.

www.people1st.co.uk

Table 31: Labour turnover by industry, 2012

Industry

Labour

turnover rate

Pubs, bars and nightclubs 26%

Restaurants 23%

Hotels 20%

Food and service management 13%

Gambling 12%

Events 11%

Visitor attractions 10%

Tourist services 9%

Self-catering accommodation, holiday

parks and hostels

When looking by size of business, those employing

more than fifty staff have the lowest turnover rate at 17

percent. These businesses are also likely to have human

resource departments to support employee engagement.

Employers stress how important retention is to maintaining

and improving productivity, and see this as a key area for

managers to focus on in the future.

8%

Hospitality and tourism 20%

Source: 2012 People 1st Employer Survey


Summary

• The ongoing need to replace staff means the sector

continues to advertise vacancies in large numbers with

most reported in hotels, restaurants, and pubs, bars

and nightclubs.

• In the last year the number of job advertisements fell,

suggesting that recruitment may be slowing and that

employers are managing fluctuations in demand with

their existing staff.

• Although people are more reluctant to move jobs

during a recession, employers appear to be focusing

more on how they engage and retain their staff,

becoming more averse to the costs associated with

high levels of recruitment and the associated training of

new staff.

• By occupation, the highest numbers of advertisements

were for restaurant managers and a variety of

chef occupations, likely to reflect the growth in the

restaurant sector. It is perhaps not surprising that chefs

represent the most hard-to-fill vacancies in

the sector.

• The types of skills that are difficult to recruit tend to be

job-specific skills, which include culinary skills for chefs,

inter-personal or softer skills such as communication,

customer service and team working for front-of-house

staff, and management and leadership skills.

• In line with the recruitment trends, the labour turnover

rate across the hospitality and tourism sector continues

to fall. However, compared to other sectors the

turnover rate remains high and increases the likelihood

of a number of recruitment issues, with hard-to-fill

vacancies and skills shortages among them.

• People 1st research recently showed that around one

in ten hospitality and tourism employers had hard-to-fill

vacancies in the previous twelve month period, and

that they were most prevalent in hotels and restaurants.

These vacancies were generally due to skill shortages

and related to entry level and skilled trade occupations.

• Employers told us that the impact of these vacancies

is most often felt by the rest of the workforce, who

have to compensate for vacancies not being filled.

Employers also suggested that these vacancies have

an impact on meeting customer service expectations.

• The main reason for hard-to-fill vacancies is the

quality and suitability of applicants, either in terms

of low numbers of applicants with the required skills

or the right attitude, motivation or personality for the

work. This concern about the suitability of candidates

highlights the need for pre-employment training at

entry level.

Recruitment and Retention | Chapter 3

• Despite the high levels of unemployment, one in five

employers with hard-to-fill vacancies believe there

are insufficient numbers of people interested in doing

the types of work available. Tailored pre-employment

training for the sector can do much to increase its

appeal as a viable career option.

Implications for employers

• Support local colleges to recruit chefs, especially in

speciality areas such as Asian and Oriental cuisine.

• Consider retaining staff and the skills they have within

the business to minimise the costs of recruitment and

training. This can help the business to realise wider

benefits such as increased profitability.

• Promote clear career pathways to enhance the

attractiveness of the sector as a viable career choice

and help to retain those who wish to develop their skills

in the sector.

• Upskill those staff already within the business. There is

an opportunity to meet the shortages for

future leaders, managers and higher skilled staff such

as chefs, who will have a well-grounded knowledge of

the business.

www.people1st.co.uk 55


4

Workforce Skills

and Development


Introduction

The previous chapter showed that high labour turnover

rates continue to characterise the hospitality and tourism

workforce. To some degree the reasons for this are

structural; for example, many staff are employed on parttime

or temporary contracts and there is a lack of clear

progression routes in many roles that might otherwise

encourage staff to develop careers in the sector instead

of looking elsewhere. Inevitably, high staff turnover will

impact on staff capability and lead to skill gaps.

While employers spend a substantial amount of money

on training, the high cost is more likely due to the sheer

volume of staff that need to be trained in an on-going

cycle of replacement. Many staff do not stay long enough

in their role to become proficient, contributing not only

to skill gaps, but also to reduced staff productivity rates.

There are concerns around the level and appropriateness

of training provided, and how well it fits with the

individual’s actual development needs.

With these points in mind, we will look at employers’

attitudes and approaches to training, skill gaps across the

sector, and the types of training used to address these

gaps. We also look at employers’ uptake and attitudes

toward employing apprentices, which have a huge

potential to establish and strengthen career pathways in

the sector.

Table 32: Incidence of skill gaps, 2011

Number of employees with

skill gaps

Percentage of establishments

with skill gaps

Percentage of staff reported

as having skill gaps

Hospitality

and tourism

All

economy

156,000 1,489,500

21% 13%

9% 5%

Source: People 1st analysis of the Employer Skills Survey, UK Commission

for Employment and Skills 2011

Table 33: Skill gaps, labour turnover and training by nation

Skill gaps

Workforce Skills and Development | Chapter 4

Skill gaps exist within a business where employers identify

that one or more of their staff are not fully capable in their

roles. In hospitality and tourism, 21 percent of employers

report skill gaps, compared to only 13 percent in the

overall economy. In terms of the workforce, nine percent

of staff in hospitality were reported to have skill gaps

(table 32), compared to only five percent in the overall

economy. Both sets of figures represent an improvement

on 2009, 15 when 26 percent of employers reported a skill

gap and there was an 11 percent incidence of skill gaps

in the workforce.

This issue was most prominent in Scotland, where 26

percent of employers reported skill gaps, but less evident

in Northern Ireland and Wales, where the figure was 18

percent and 19 percent respectively. England was in line

with the UK average (21 percent) (table 33). By industry,

hotels and restaurants were the most likely to report skill

gaps (30 percent and 25 percent respectively), despite

higher levels of training.

There appears to be a relationship between skill gaps

and the volume of training delivered in the sector. For

example, employers in both Scotland and England report

high levels of skill gaps, but they also offer high volumes

of training. Higher rates of labour turnover could be a

factor as new staff require training, usually at a basic

or introductory level rather than matched to personal

development needs. Conversely, the figures for Northern

Ireland may suggest different approaches to training given

a lower proportion of skill gaps coupled with a relatively

high volume of training.

By industry, as many as 30 percent of employers in hotels

and 25 percent of restaurants reported a skill gap, which

was higher than the sector average (21 percent) (table

34). In terms of the workforce, one in ten employees in

hotels, restaurants, visitor attractions and gambling were

not fully proficient, which was closer to the sector average

of nine percent.

Labour turnover Skill gaps % of employers Training in last 12 months

England 20.0% 21% 41%

Scotland 17.1% 26% 48%

Wales 19.6% 19% 36%

Northern Ireland 15.7% 18% 45%

Source: 2012 People 1st Employer Survey; People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011

15 Cited from the 2009 National Employer Skills Survey, UK Commission for Employment and Skills which, although not directly comparable, provides a strong indication of trends.

www.people1st.co.uk 57


58

Chapter 4 | Workforce Skills and Development

Table 34: Skill gaps, labour turnover and training by industry

www.people1st.co.uk

Labour

turnover

Skill gaps %

of employers

Skill gaps %

in workforce

Training in

last 12 months

Hotels 19.8% 30% 10% 49%

Restaurants 22.9% 25% 10% 39%

Gambling 12.0% 20% 10% 30%

Pubs, bars and nightclubs 26.3% 20% 8% 46%

Visitor attractions 10.2% 10% 10% 49%

Food and service management 13.1% 8% 4% 43%

Self-catering accommodation, holiday parks

and hostels

7.5% 7% 5% 25%

Tourist services 8.7% 6% 3% 56%

Events 11.0% 5% 2% 36%

Source: 2012 People 1st Employer Survey; People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011

36%

of businesses provide training based

on personal development needs

Table 35: Incidence of skill gaps by occupational group

It appears that elementary occupations are those most

likely to exhibit skill gaps. For example, 22 percent of

employers report having at least one skill gap within

this area (table 35), with 11 percent of the workforce

considered not fully proficient in their job. Both rates are

higher than those seen in the economy as a whole. As

many staff enter the sector at this level, these figures may

point to issues with work-readiness among new entrants,

who may lack the basic skills to do their job.

Employers also reported high levels of skill gaps among

managers and, to a lesser extent, within the workforce as

a whole. The development and proficiency of managers is

crucial to engage staff and is a factor in retention.

Hospitality and tourism All industries

Employers

reporting skill

gaps

Percentage of

workforce with

skill gaps

Employers

reporting skill

gaps

Percentage of

workforce with

skill gaps

Managers 6% 4% 3% 3%

Professionals 6% 4% 9% 4%

Associate professionals 11% 7% 11% 5%

Administrative/clerical staff 9% 6% 7% 5%

Skilled trades 11% 7% 12% 5%

Caring, leisure and other services staff 12% 7% 16% 6%

Sales/customer service staff 17% 9% 16% 8%

Machine operatives 15% 10% 10% 6%

Elementary staff 22% 11% 14% 8%

Source: People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011


Table 36: Main reasons for skill gaps

Reasons staff lack skills

Skill gaps can exist for a number of different reasons, but

the most common was that staff were new to the role

(within 62 percent of businesses with skill gaps) (table

36). To some extent this is to be expected given the high

rates of labour turnover across the sector. The second

most common reason was that staff training was only

partially completed (54 percent), which may also be linked

with high turnover rates. However, employers did not

appear to link skill gaps with difficulties in retaining staff

(endorsed by only 16 percent of employers).

While 37 percent of employers said that staff had been on

training, they noted that performance had not improved

sufficiently, which implies issues with the relevance and

effectiveness of the training provided. Furthermore, 39

percent said that their staff lack motivation, suggesting

they are not fully engaged with their work. In addition, a

quarter of sector employers stated that their staff have

not received the appropriate training (prior to employment

in their current role) and that they were unable to recruit

staff with the required skills. Given the economic situation

and unemployment levels, it would seem unusual that

employers cannot find sufficiently skilled individuals. Once

again, this highlights the possible issue of work-readiness

and employer expectations around basic skills, particularly

for elementary roles.

Workforce Skills and Development | Chapter 4

Hospitality

and tourism

All industries

Staff are new to the role 62% 55%

Their training is currently only partially completed 54% 56%

Staff lack motivation 39% 32%

They have been on training but their performance has not improved sufficiently 37% 29%

The introduction of new working practices 26% 24%

They have not received the appropriate training 25% 27%

Unable to recruit staff with the required skills 25% 18%

The development of new products and service 17% 18%

Problems retaining staff 16% 8%

The introduction of new technology 14% 19%

Lack of other skills e.g. communication, interpersonal 2% 2%

No particular cause 2% 1%

Lack of aptitude to do job/reached maximum potential 2% 2%

Non-work related problems e.g. health or personal problems 1% 2%

Language barrier – English not first language 1% 0%

Source: People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011

To address some of the reasons for skill gaps, employers

would benefit from a potential labour pool that is

motivated and meets the minimum skills requirements for

the role to ease recruitment difficulties. Employers should

also ensure that appropriate training is provided once the

individual is in post. If employers can recruit people with

the right skills and attributes, and provide appropriate

training and development opportunities, a positive impact

on both retention and productivity is possible.

www.people1st.co.uk 59


60

Chapter 4 | Workforce Skills and Development

Table 37: Skills that need improving across the workforce

www.people1st.co.uk

Hospitality

and tourism

All industries

Customer handling 61% 45%

Job specific 57% 61%

Planning and organisation 55% 52%

Team working 53% 42%

Oral communication 48% 38%

Problem solving 48% 43%

Technical or practical 33% 38%

Strategic management 29% 26%

Written communication 27% 29%

Numeracy 22% 17%

Literacy 21% 19%

Office admin 20% 27%

Foreign language 18% 10%

Basic computer literacy/using IT 18% 21%

Advanced IT or software 15% 22%

No particular skills difficulties 3% 4%

Personal attributes (e.g. motivation, work ethos, common sense, initiative, reliability,

commitment, punctuality, flexibility)

1% 1%

Experience/lack of product knowledge 1% 2%

Written Welsh language 1% 1%

Oral Welsh language 1% 1%

Other 1% 1%

Source: People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011

Skills lacking in the workforce

Employers themselves reported that the skill that most

commonly needs improvement is customer handling (61

percent), which is also the number one skills issue for the

future. Aside from job-specific skills (57 percent), planning

and organisational skills (55 percent) and team working

skills (53 percent) were also commonly reported as

lacking, and the need for all was higher than the average

observed across all industries (table 37).

These gaps have been identified across the sector

before, although there are now a number of products

and initiatives in place aimed at helping businesses

to train staff in key areas. In hospitality these include

customer service and pre-employment training, higher

level apprenticeships in hospitality management, and

scholarship programmes aimed at developing strategic

and management skills.


Higher Apprenticeships

A Higher Apprenticeship in Hospitality Management

has been developed to bridge the gap between the

supervisory skills gained in an apprentice’s early career

and the strategic management skills required to work at a

senior level.

People 1st developed the new framework and,

working in partnership with UH Ventures and University

College Birmingham, gained funding from the

National Apprenticeship Service to set up the delivery

infrastructure for this new Higher Apprenticeship.

The Higher Apprenticeship in Hospitality Management

provides learners with a clear career path into more senior

levels, and the new framework will deliver practical but

rigorous training that has been designed specifically for

the hospitality industry.

Training staff and supporting the development of the

next generation of leaders is extremely important for

the hospitality industry if businesses are going to both

survive and thrive.

The Higher Apprenticeship in Hospitality Management

is all about giving learners the chance to apply the

knowledge they gain in a learning environment in a

practical setting. It is helping to develop the managerial

Skills needs by occupational groups

The largest section of the workforce in hospitality and

tourism falls within the broad occupational category of

elementary occupations (49 percent), with significant

proportions within managers, directors and senior officials

(16 percent), and skilled trades occupations (14 percent).

Figure 17: Skills that need improving by key occupational grouping

Technical or practical

Oral communication

Customer handling

Team working

Problem solving

Job specific

Planning and organising

Workforce Skills and Development | Chapter 4

skills of our next generation of leaders. The Higher

Apprenticeship is open to existing or new staff employed

in an appropriate job role.

The Higher Apprenticeship framework is made up of:

• Level 4 Diploma in Hospitality Management (QCF) –

the competence element

• Level 4 Diploma in Principles of Hospitality

Management (QCF) or Level 4 Diploma in Advanced

Hospitality and Tourism Management (QCF) – the

knowledge elements

• Functional skills in English and Maths at level 2

• Functional skills in ICT at level 2

Source: People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011

25%

28%

32%

35%

34%

34%

38%

40%

44%

45%

45%

46%

Employee rights and responsibilities are embedded into

the required competence units and will be assessed as

part of the Diploma.

Personal learning and thinking skills are also included,

which are identified as essential to successful life

learning and work that provide apprentices with a solid

foundation and the ability to transfer skills to other areas.

For more information on Higher Apprenticeship

opportunities, please contact People 1st on

01895 817000 or apprenticeship@people1st.co.uk

48%

46%

0% 10% 20% 30% 40% 50% 60% 70%

42%

46%

There were seven common core skills that needed

improvement among these occupational groups

(figure 17). For example, customer handling skills need

improving among elementary occupations (59 percent)

more than managerial positions (40 percent) and skilled

trades (34 percent), as these are more likely to be

customer facing roles.

50%

53%

59%

58%

61%

Managers, directors and senior officials

Skilled trades occupations

Elementary occupations

www.people1st.co.uk 61


62

Chapter 4 | Workforce Skills and Development

Figure 18: Generic skills in which staff would benefit from additional training

Source: 2012 People 1st Employer Survey

www.people1st.co.uk

Safety management

Positive attitude and commitment

Ability to monitor and solve customer service problems

Ensuring compliance/regulation

Team working

Ability to coach and motivate others

Professional communication skills

Management and leadership

Capability to help customer with disabilities

Professional looking apperance

Finance/budgetary control

Basic numeracy

Intercultural sensitivity

Basic literacy

22%

21%

21%

0% 5% 10% 15% 20% 25% 30% 35% 40%

23%

28%

Likewise, job specific skills were needed more among

skilled trades (61 percent) than elementary staff (53

percent), and even less among managers (46 percent).

Chefs comprise the majority of skilled trade workers in the

sector and with 61 percent needing additional job specific

skills, this occupational group has the highest need.

The 2012 People 1st Employer Survey showed that

safety management was the generic skill that staff most

commonly need additional training in (40 percent) (figure

18). The regulatory training requirement around health

and safety across many of the sector’s industries is no

doubt driving this need. Beyond this, customer service

ranks highly in terms of the ability to monitor and solve

customer problems (38 percent), while a positive attitude

and commitment (38 percent) was also considered very

important and underlines the fact that many employers

find staff motivation an issue.

The diverse nature of the hospitality and tourism sector

means that various industries have different skills needs.

The matrix in table 38 shows that, for example, the ability to

monitor and solve customer service problems is a relatively

high priority for most industries, although in events it is

a medium priority and in self-catering accommodation,

holiday parks and hostels it is a low priority.

33%

34%

35%

35%

37%

37%

38%

38%

40%

Training can clearly address problems in certain skillsets

like customer service. However the problem of staff

motivation must be considered alongside different

methods of employee engagement. Understanding

staff motivation is also part of a skilled manager’s toolkit,

so leadership and management skills will be indirectly

important in motivating staff and staff retention.


Table 38: Generic skills in which staff would benefit from further training, by industry

The impact of skill gaps

Food and service

management

Gambling

Almost two thirds (63 percent) of businesses with skill

gaps in the hospitality and tourism sector recognise that

skill gaps have an impact on their business, which is

slightly higher than the average for all industries

(61 percent).

When it comes to the impact of skill gaps, 50 percent of

sector employers reported that they lead to an increased

workload for other staff, 32 percent believe it makes

Self-catering accommodation,

holiday parks and hostels

Workforce Skills and Development | Chapter 4

Ability to coach and motivate others 38% 28% 20% 40% 37% 35% 39% 28% 24% 35%

Ability to monitor and solve

customer-service problems

Hotels

Pubs, bars and nightclubs

36% 40% 24% 42% 38% 38% 44% 38% 28% 38%

Basic literacy 22% 13% 6% 25% 22% 22% 10% 14% 9% 21%

Basic numeracy 22% 18% 10% 23% 26% 22% 9% 14% 8% 22%

Capability to help customers with

disabilities or particular requirements

30% 32% 23% 38% 35% 33% 47% 43% 20% 33%

Ensuring compliance/regulation 42% 35% 31% 38% 37% 37% 29% 27% 26% 37%

Finance/budgetary control 27% 11% 13% 21% 22% 24% 20% 16% 30% 23%

Intercultural sensitivity e.g. to cater

effectively to guests from abroad

24% 15% 13% 28% 19% 23% 27% 21% 13% 21%

Management and leadership 34% 24% 16% 39% 34% 37% 42% 34% 33% 34%

Positive attitude and commitment 33% 36% 20% 42% 40% 38% 32% 37% 21% 38%

Professional communication skills 37% 28% 21% 36% 35% 36% 35% 39% 28% 35%

Professional-looking appearance (for

customer-facing roles)

30% 21% 15% 32% 29% 28% 27% 28% 11% 28%

Safety management 40% 34% 24% 39% 39% 41% 31% 40% 36% 40%

Team working 34% 34% 21% 37% 40% 37% 31% 33% 25% 37%

Source: 2012 People 1st Employer Survey

Restaurants

Tourist services

Visitor attractions

Events

Hospitality and tourism (total)

it difficult for them to meet quality standards, and 31

percent state that they increase operating costs (table

39). In a sector where quality and costs are important to

profitability and productivity, this represents a significant

issue. Given the high stakes, it is also a concern that

more than a third (37 percent) of employers say that

that skill gaps do not impact upon their business. Yet if

increased workloads are sustained over long periods and

become part of the work culture, there will be a negative

impact on staff productivity and morale.

www.people1st.co.uk 63


64

Chapter 4 | Workforce Skills and Development

Table 39: Impact of skill gaps

Increase workload for

other staff

Have difficulties meeting

quality standards

What actions are employers taking to overcome skills

gaps? Encouragingly, the vast majority (75 percent) of

sector employers have already taken steps to improve

their staff members’ abilities, while a further 13 percent

planned to do so. 16 The most common action was to

increase training activity (mentioned by 61 percent of

businesses reporting skill gaps), while introducing

more supervision of staff (50 percent) and more staff

appraisals/performance reviews (44 percent) were also

mentioned (table 40).

Employer approaches to

training

Investment in training

A serious commitment to staff training and development

is often apparent in a business’ planning, whether or not

there are training plans in place that specify the level and

type of training employees will need in the coming year.

Yet less than half of hospitality and tourism businesses

(48 percent) reported they had a business plan or

engaged in annual business planning. Research for the

www.people1st.co.uk

Hospitality

and tourism

All

industries

50% 48%

32% 25%

Increase operating costs 31% 28%

Lose business or orders

to competitors

Have difficulties

introducing new working

practices

Delay developing new

products or services

24% 20%

23% 23%

15% 16%

Outsource work 8% 9%

Source: People 1st analysis of the Employer Skills Survey,

UK Commission for Employment and Skills 2011

16 People 1st analysis of the Employer Skills Survey, UK Commission for Employment and Skills 2011

17 Employer Skills Survey, UK Commission for Employment and Skills 2011

18 Hotels and restaurants only

19 Employer Skills Survey, UK Commission for Employment and Skills 2011

Table 40: Action taken to overcome skill gaps

Increase training activity/

spend or increase/expand

trainee programmes

Hospitality

and tourism

All

industries

61% 62%

More supervision of staff 50% 46%

More staff appraisals/

performance reviews

Implementation of

mentoring/buddying scheme

44% 41%

38% 38%

Reallocating work 27% 25%

Nothing 26% 26%

Changing working practices 25% 23%

Increase recruitment activity/

spend

Recruiting workers who are

non-UK nationals

Source: People 1st analysis of the Employer Skills Survey,

UK Commission for Employment and Skills 2011

18% 11%

15% 7%

sector suggests that the level of business planning may

be as low as 38 percent and that just 24 percent of

employers have a training budget, 17 which is lower than

the average across the economy (29 percent).

While on-the-job training accounts for 63 percent of

in-house training, the remainder is off-the-job with an

average spend of £3,625 per trainee in the sector; 18 this

is higher than the average of £3,275 across all industries.

The average spend per employee (based on the total

employees within the business, regardless of whether

they received training) equates to £1,975, which is also

slightly higher than the all-industry average of £1,775.

Again, high staff turnover can be a factor in pushing up

the average cost of training.

By industry, hotels and restaurants were recently found to

have spent £3,421m on staff training; 19 37 percent of this

goes towards direct costs (such as fees paid to training

providers or training centre costs), but the majority (63

percent) goes towards the labour costs of paying workers

while they are not producing and illustrates employers’

often cited concern about the true cost of training.


Figure 19: In the next 12 months do you expect your investment in training to…?

80%

70%

60%

50%

40%

30%

20%

10%

0%

6%

Increase

significantly

Source: 2012 People 1st Employer Survey

In terms of future investment, the outlook was positive as

employers indicated that they expected to see a slight

increase in their investment in training in the coming 12

months (figure 19). The majority (68 percent) said their

training investment would stay about the same, but 23

percent said it would increase compared to only four

percent expecting a decrease.

Incentives to train

17%

Increase

slightly

68%

Stay about

the same

Certain incentives, usually financial and linked to

Government policy, can encourage employers to invest

more in training. Our research shows that most

employers favoured funding or subsidies as an incentive

3% 1%

Decrease

slightly

Decrease

significantly

Workforce Skills and Development | Chapter 4

to train (64 percent), followed by an increase in sales

or financial turnover (61 percent) and a tax incentive for

businesses (58 percent) (figure 20). However, advice and

effective signposting cannot be understated as more

than half (57 percent) of businesses said that a greater

awareness of what was available would increase their

investment in training. Less than half (47 percent) would

be persuaded by greater evidence of the financial return

on investment of training. 18 percent of employers said

that none of these incentives would encourage them to

train more.

Figure 20: Which of the following would encourage you to increase your investment in training?

Source: 2012 People 1st Employer Survey

Availability of funding/subsidies

An upturn in business (sales/turnover)

A tax incentive for business delivering specific training

Greater awareness of what is available

Greater evidence on the business benefit of

specific training e.g. return on investment (ROI)

None of these

18%

0% 10% 20% 30% 40% 50% 60% 70%

47%

58%

57%

61%

64%

www.people1st.co.uk 65


66

Chapter 4 | Workforce Skills and Development

Hospitality Guild web portal:

The gateway to hospitality careers,

training and development

The Hospitality Guild was created to unite the hospitality industry, to simplify

and improve professional development, and to improve the industry’s

reputation as a place to develop a career.

Skills development and career progression are at

the very heart of the Guild’s vision; easier access to

training, apprenticeships and jobs for individuals and a

bank of eager, engaged professionals for employers.

The Hospitality Guild web portal launched in January

2013, and the award winning website, UKSP.

co.uk, has been folded into the Guild portal to build

a comprehensive single channel for careers and

development in the hospitality and tourism industry.

The Hospitality Guild portal will use the expertise of

the Guild’s partner organisations to provide access

to training and development opportunities tailored to

specific parts of the industry. Courses from the British

Institute of Innkeepers, Academy of Culinary Arts and

People 1st are among the options available to people

seeking specific skills training.

Tools available for individuals include a personality

test to discover which branch of the industry is best

for them, a bank of certified ‘Good Employers’, job

matching their skills to specific roles, profile tools to

allow them to keep their skills and achievements up

to date, career maps to help them plan their

progression, and access to the best training and

development plans.

Employers can access a bank of detailed profiles of

potential employees and can search these for specific

qualities or skill sets. They can sign up to the ‘Good

Employer’ charter to show to potential employees

that they operate best practice in staff training and

development, or sign the Employer Promise, which

commits employers to offering interviews for suitable

vacancies to candidates that have completed the

Employment 1st programme. This allows them

to recruit quality candidates for their roles and to

showcase their dedication to the improvement of

professional development.

www.people1st.co.uk

The Hospitality Guild web portal is a key part of the

Guild’s objective to set the standards for training and

professional development through clear career paths

and quality partnerships.


Training activity

In total, 41 percent of employers told us that they had

arranged or funded staff training or development in the

last 12 months. Business size had a significant impact; as

figure 21 illustrates, the larger the business the more likely

it is to train.

Hotels, pubs, bars and nightclubs, and food and service

management establishments had above-average rates of

training compared to the rest of the sector. Tourist services

and visitor attractions had the highest proportion of training,

although these figures were based on relatively low sample

sizes and should only be viewed as indicative (figure 22).

Workforce Skills and Development | Chapter 4

Figure 21: Arranged or funded staff training or development in the last 12 months by business size

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

23%

Less than 5

employees

43%

5-9

employees

Source: 2012 People 1st Employer Survey

Figure 22: Arranged or funded staff training or development in the last 12 months by industry

Source: 2012 People 1st Employer Survey

62%

10-19

employees

Hospitality and tourism (total)

Tourist services

Visitor attractions

Hotels

Pubs, bars and nightclubs

Food and service management

Restaurants

Events

Gambling

Holiday parks, self catering accommodation, hostels

72%

20-49

employees

85%

Over 50

employees

25%

30%

36%

41%

39%

43%

46%

49%

49%

56%

0% 10% 20% 30% 40% 50% 60%

www.people1st.co.uk 67


Find great staff!

Apprenticeships are a fantastic way to attract enthusiastic staff members into

the hospitality industry. They also bring great benefits to businesses including

increased staff motivation, productivity and loyalty.

The Hospitality Guild has teamed up with partner organisations to promote

quality apprenticeships through the Act NOW! on apprenticeships campaign.

This campaign offers 5 simple

steps to:

1. Provide training to work

in hospitality

2. Deliver an apprenticeship

3. Hire an apprentice

4. Career paths and where

they can lead

5. Promote career development

Help 20,000 people find paid

work and apprenticeships.

w: www.hospitalityguild.co.uk/actnow

e: apprenticeship@hospitalityguild.co.uk

#ActNOW

Act NOW!

on a pprenticeships


Table 41: Training formats used

Format of training Percentage

On-the-job training 88%

Training towards formal/recognised

qualifications

Training based on personal

development needs

38%

36%

Short courses/'bite-sized' learning 31%

Company-wide training programmes 28%

Accredited or 'kite-marked' training 20%

CPD (continuing professional development) 18%

None of these 9%

Source: 2012 People 1st Employer Survey

Table 43: Training provision by occupational

grouping

Occupation group Percent

Managers, directors and senior officials

occupations

58%

Professional occupations 2%

Associate professional and technical

occupations

1%

Administrative and secretarial occupations 11%

Skilled trades occupations 15%

Caring, leisure and other service occupations 3%

Sales and customer service occupations 19%

Process, plant and machine operatives 2%

Elementary occupations 63%

Source: People 1st analysis of the Employer Skills Survey,

UK Commission for Employment and Skills 2011

Table 44: Apprenticeships in hospitality and catering

Workforce Skills and Development | Chapter 4

Table 42: Types of training provided

Type of training Percentage

Job-specific training 86%

Health and safety/first aid training 84%

Induction training 65%

Supervisory training 46%

Management training 43%

Training in new technology 28%

Personal development training 2%

Other 1%

Source: People 1st analysis of the Employer Skills Survey,

UK Commission for Employment and Skills 2011

Training delivery

On-the-job training was used most commonly (as stated

by 88 percent of those who have provided training in the

past 12 months), although only around a third (36 percent)

provided training based on personal development needs

(table 41). This suggests that much of the training in the

sector is uniform in nature and most likely at a basic or

introductory level. Indeed, 65 percent of training activity in

the sector is around induction (table 42) and 63 percent is

linked to elementary occupations (table 43).

Job-specific training is most commonly provided (86

percent), followed by statutory training, such as health

and safety and first aid (84 percent) (table 42).

While the most likely group to receive training were those

in elementary occupations (63 percent), managers,

directors and senior officials were also high at 58 percent

(table 43). As mentioned earlier, this high rate of training

for elementary occupations is intertwined with high staff

turnover rates and a higher rate of skills gaps among this

group. Only 15 percent of skilled trades such as chefs

receive training, highlighting an imbalance considering

the earlier reported requirement for improved job-specific

skills among skilled trades in the sector.

Industry 2010/11 2011/12 (provisional) Annual change

Hospitality and catering Starts 29,810 34,840 17%

Source: Data service (coverage – England only)

Achievements 13,880 16,660 20%

www.people1st.co.uk 69


70

Chapter 4 | Workforce Skills and Development

Apprenticeships

Apprenticeships form a critical part of the Government’s

skills legacy. At present, the Government heavily backs

apprenticeship programmes and the benefits of this form

of training in engaging young people in employment,

education and training. Apprenticeships have received

a good deal of media coverage, not least because

of reviews that have taken place into their delivery.

Apprenticeships can make a real difference in the

recruitment of staff in the hospitality and tourism sector,

and can help to establish and develop career pathways.

They are one of the few areas of training where funding

is available to employers to assist with the costs of

employing and managing apprentices, and yet a lack

of funding is often cited as a reason for not offering

apprenticeships.

What is less well documented is employers’

understanding and use of current initiatives, such as the

wage incentive to employ apprentices aged 16 to 24. As

the Government has just extended this financial subsidy

in England, the impact on uptake remains to be seen.

Regardless, a greater emphasis on apprenticeships and

the use of formal training programmes would at least

partially address employer feedback about the lack of jobspecific

skills in applicants.

Looking at the figures for the sector in England, around

35,000 people started apprenticeships in hospitality and

catering in 2011/12 across England; a rise of 17 percent

from the previous year (table 44). There were also around

17,000 completions, an increase of 20 percent.

People 1st research has shown that for hospitality and

tourism as a whole, just five percent of businesses

currently employ anyone on a Government approved

apprenticeship programme, although there are differences

by industry, with hotels employing by far the highest

www.people1st.co.uk

proportion in the sector at 12 percent. On a positive note,

28 percent of employers said that they were likely to

employ an apprentice in the future.

According to People 1st research, employers state

that there are barriers to employing an apprentice,

especially the belief that programmes may not meet

business requirements (20 percent, ranked as the highest

reason) (table 45). Other employers reported there

was not enough work (18 percent) and that it was not

economically viable for them (18 percent). However a lack

of suitable courses might indicate the need to develop

appropriate frameworks for 11 percent of employers in the

sector. Administration and bureaucracy was a concern for

a minority (three percent).

“ With apprenticeships we would like to go

down that route, but again it’s the management

of it. To be able to manage it internally we would

have to create an entirely new team of people

to manage that process. So then we have to

outsource it to an outside provider and then the

problem with that is you then don’t have as much

direct control over the content.


John Kelly, Head of Group Training,

Restaurant Group

Table 45: Barriers to employing apprentices

Industry %

Schemes do not meet business requirements 20%

Not enough work 18%

Not economically viable for the business 18%

No suitable courses/qualifications covering

business activity

Don't need them for this type of work/nature of

the business

11%

9%

Only require experienced workers 8%

Not enough time to train/too busy 5%

Don't take them on or need them 5%

Business is small/not big enough 4%

We are fully staffed/have no vacancies 4%

Age cap/limited by law/have to be 18 to serve

alcohol

4%

Think it is too complex/too much bureaucracy 3%

Don't know how to go about it 2%

Source: 2012 People 1st Employer Survey


Summary

• Employers in the sector spend a substantial amount

of money on training due to high labour turnover and

the need to replace staff. This means staff do not

stay in post long enough to become proficient, which

contributes not only to skills gaps, but also to reduced

staff productivity.

• A higher proportion of hospitality and tourism

employers report skill gaps compared to the overall

economy. By industry, employers in hotels and

restaurants were more likely to report skill gaps than

the sector as a whole.

• Skill gaps are most often found among management

occupations and elementary occupations. As the

latter tend to be entry level positions, this may point to

issues with work-readiness. Employers reported that

skill gaps were most often due to staff being new in the

role, which further heightens this belief.

• In a sector where quality and costs are important

to profitability and productivity, skill gaps present a

significant issue. Almost two thirds of employers with

skill gaps recognise that they have an adverse impact

on their businesses, leading to increased workloads

for other staff. They also mean employers are less

able meet the required quality standards and reduce

operating costs.

• Yet the level of training provided remains an issue as

less than half of employers told us they had arranged

or funded staff training or development in the last 12

months. Business size was a factor in this; the larger

the business the more likely it was to train.

• While many employers indicated that incentives could

increase their likelihood to train they also said that

a greater awareness of what was available would

increase their investment in training.

• Only around a third of employers provided training

based on personal development needs. This suggests

that much of the training in the sector is uniform and

at a basic, introductory level and is unlikely to be

addressing the skills needs of individual employees.

• Apprenticeships provide a structure for training within

the business but across the hospitality and tourism

sector just five percent of employers employ anyone on

a Government approved apprenticeship programme,

although there is scope for this to improve in the future.

Workforce Skills and Development | Chapter 4

Implications for employers

• Pre-employment and the work readiness of new

entrants would be of benefit. Employers can recruit

pre-trained entry level staff with the right skills and

attitude to work from the Employment 1st programme,

for example.

• Apprenticeship frameworks can be used to develop

staff within the business, ranging from entry level to

strategic management training in hospitality, which can

ultimately lead to a degree and a vocational alternative

to higher education.

• Install processes for staff appraisals, which will identify

the skills and training needs of staff and enable staff

to be more proficient in their roles. This training will be

tailored to needs and will tackle skill gaps within the

business, leading to reduced workloads for other staff

and lower operating costs.

• Opportunity to use new tools available through the

Hospitality Guild portal (for example), which can help to

identify training solutions.

• Consider working with other industry bodies to

seek alternative forms of funding for training in

apprenticeships, specialist skills, scholarships, etc.

www.people1st.co.uk 71


5

Future Trends


Introduction

This chapter discusses the main trends that employers

and industry commentators believe will impact on the

sector in the future. We then go on to consider the

implications for the workforce and key occupations, and

the skills employers highlight as being future priorities.

Our findings are based primarily on our consultations with

employers in the hospitality and tourism sector, and the

recent 2012 People 1st Employer Survey.

We can look back at 2012 as a turning point for the

sector. The year provided some positive trends in

recruitment, labour turnover, employment and growth,

driven in part by key events such as the London 2012

Olympic and Paralympic Games. There are opportunities

to learn lessons from what has worked before, during

and after these events and to harness these lessons

as part of the enduring legacy. For example, replicating

the successful training given to Olympic and Paralympic

Games volunteers, which played an important role in

improving visitor perceptions of the UK as a

global destination.

As a continuing undertone during 2012, the economy

continued to impact hospitality and tourism businesses

but has shaped a leaner sector that is arguably better

prepared, or at least braced, to face the future. There

has been a sense of resilience among employers during

the economic crisis as many businesses have adapted,

innovated and carefully controlled costs to become

more efficient.

There is still much to be done to improve staff retention

and engagement, address skill gaps, and increase

both profitability and productivity. A skilled workforce will

undoubtedly position the industry well for the coming

years, but what should the key areas of focus be for

skills? What are the key opportunities and barriers that will

impact sector employers in the foreseeable future?

The future trends in hospitality

and tourism

There are likely to be a number of wider business issues

impacting employers; some will be evident from within the

business such as customer trends, while other trends will

affect businesses from without, such as market forces,

regulatory change, and sustainability.

The extent to which any given trend represents an

opportunity or threat will depend on how well equipped

employers (owners or managers) feel to deal with it.

In one sense a clear vision, strong leadership, good

management skills and access to the appropriate

intelligence will be key. Flexibility and the ability to cope in

a changing workplace are also important.

Future Trends | Chapter 5

“ Managers are going to be managing much

more diverse global workforces and navigating a

much more complex and fluid environment, with

shifting priorities, virtual teamworking, and

cross functional and group responsibilities.


Sarah Lister, Group Talent and Development

Director, Merlin Entertainments Group

On another level, trends can be further understood as

potential drivers, presenting opportunities, or barriers to

growth; or even a threat to businesses. From a list of

key trends, the 2012 People 1st Employer Survey asked

employers (a) which trends they felt would drive growth in

their business in the next 3 to 5 years, and (b) which had

the potential to prevent growth? Overall, it was clear that

customer trends were the most important future concern

for employers.

Perhaps because of differing perceptions or underlying

factors, some issues were considered both drivers and

barriers to growth. Customer trends are an example of

this, where 41 percent believe that changes in customer

spending patterns will be an integral driver for their

business in the future, while 44 percent think they will

represent a barrier to growth (figure 23). Equally, changing

customer tastes and preferences could present both

opportunities (32 percent) and barriers to growth

(28 percent) and introduce future challenges that may

require businesses to reassess their target markets.

Rising customer expectations were seen as a positive

trend among 28 percent of employers. Responding to

these expectations will offer employers opportunities to

increase their goods and services, and highlights the

issue of quality and other similar differentiators between

rival organisations. It follows that the investment required

to improve quality and standards in a service driven

sector such as hospitality and tourism should focus on

increasing the skills of those working in the area.

“ The challenge for anybody, whether

independent, unbranded or branded, whether

a restaurant or a pub, is how do you stand out

in that market? How do you get differential

advantage? Ultimately it comes down to your

people.


Peter Martin, Managing Director, Peach Factory

www.people1st.co.uk 73


74

Chapter 5 | Future Trends

Figure 23: Future trends in hospitality and tourism – drivers and barriers to growth

Source: 2012 People 1st Employer Survey

Social media is a key area for many employers as

they seek to take advantage of new ways to engage

with customers; 29 percent expected this to be a

growth driver compared to just 11 percent who saw it

as a barrier.

19 percent of employers saw opportunities around the

issue of sustainability in the years to come, despite the

current economic climate and the fact that locally-sourced

products can be relatively more expensive. Although

sustainability and environmental concerns are facing

pressure because they often imply increased cost or

investment, they are likely to endure in customer tastes

and preferences. Sustainability is also linked to innovation

and will continue to be a factor in food production,

for example, where scarcity of resources and

concerns about food waste are driving the need for

greater efficiency.

Changes in the customer profile were also important

(18 percent). However, like other customer trends, almost

as many people (15 percent) saw this as a potential

barrier, depending on whether this change in customers

represented a good or bad thing for the business.

www.people1st.co.uk

Changes in customer spending patterns

Changes in customers’ tastes and preferences

Social media

Rising expectations of customer service standards

Sustainability

Change in customer profile or ‘demographic’

Regulation and legislation

Online or e-commerce

New and emerging technologies

Rise of new foreign markets

11%

14%

19%

11%

18%

15%

17%

14%

7%

11%

8%

5%

6%

32%

28%

29%

28%

28%

41%

44%

0% 10% 20% 30% 40% 50%

Drivers

Growth barriers

The only trend that employers were more likely to see as

a barrier to future growth was regulation and legislation

(28 percent). There are numerous examples of where this

can have a negative impact in the sector, notably in the

recruitment of skilled chefs from overseas, which is an

enduring problem.

In the pub industry, the proposed minimum pricing of

alcohol in pubs could also have a negative impact in

the on-trade drinking market and increase the trend for

people to drink at home (off-trade). On this evidence the

expectation is for legal and regulatory barriers to continue,

although the UK’s place within the EU may have a bearing

in some instances where EU legislation is perceived as

shackling business practices (for example the Working

Time Directive governing working hours). Interestingly,

the emergence of new foreign markets, although much

spoken of in the media and elsewhere, was largely of no

concern to employers in the sector – only around one in

20 saw this trend as having any growth implications.

We explored the possible future trends in greater

depth in our consultations with sector employers and

industry experts, each of which is addressed in turn. In

practice these factors will interact with one another, while

conditions in the wider economy provide the context. The

main areas relate to:

• Customer trends

• Product and market trends

• Social media and technology trends


1. Customer trends

The economic downturn changing values

and behaviours

Unsurprisingly, employers and industry commentators

report that the economic crisis has had a significant

impact on the sector and is likely to do so for the

foreseeable future, perhaps well into the decade.

Underlying the future changes in customer trends is a

belief that the current economic crisis is changing values

and behaviours among consumers.

In the tourism market, the recession and weak pound

have resulted in significant changes in patterns of people

taking holidays, with an increase in domestic holidays

and a corresponding decrease in outbound holidays.

However, there is no consistent picture across the

industry, with customer demographics and contrasting

levels of disposable income a determining factor in

the mixed fortunes of businesses at different ends of

the market; while the affluent are taking more holidays

at home, the least affluent are taking less. With the

increase in ‘staycations’ and holidaying at home, research

suggests that domestic tourists have been rediscovering

their own country and have been pleasantly surprised. 20

When the economy recovers in the future, the indications

are that this trend will continue.

In the dining out and drinking market the economy is

impacting on consumer demand and, with customers

being more cautious about spending, the biggest issue

is encouraging people to go out. Commentators suggest

that while consumer spending in the dining out market

is likely to remain flat in the coming year, it will probably

result in increased competition for market share.

“ There’s nothing to suggest that consumer

spending or frequency of eating out is going to go

down next year, but neither is it going to go up. So

we’ve got a benign, stable market and within that

you’ve got massive competition.


Peter Martin, Managing Director, Peach Factory

Knowledgeable customers, rising expectations

Our interviews with employers and industry experts

found that customers were becoming increasingly

knowledgeable and well informed. This is in part driven

by technology and social media, where customers

can research businesses and access online offers.

Testimonials from real customers add another layer

of insight into the research consumers undertake

themselves and give a better indication of the customer

experience than advertising alone. As a result, customers

already have an expectation about the products and

20 Future of the Staycation, VisitEngland, 2010

Future Trends | Chapter 5

services they receive and businesses need to not only

meet these expectations, but exceed them.

“ What you’ve got is an ever more

sophisticated consumer, who is better informed

because of the rise in smart phones and

technology. The consumer knows what they are

going to get before you’ve got them through

the door. So you don’t have to meet their

expectations, you have to exceed them on a daily

basis, and the way you do that is through your

staff.


Kate Nicholls, Strategic Affairs Director,

Association of Licensed Multiple Retailers

It may sound obvious, but consumers within the

hospitality and tourism sector are not a homogenous

group. It is apparent that there are different customer

profiles for different markets, products and service types.

Even within a particular industry or business there will be

many segments making up the customer base, each

with its own wants and needs. Some consumers will

be primarily price-driven, while others will be concerned

with quality. Understanding customers and the target

market for products and services is crucial to making

informed business decisions and maximising profitability.

Managers and decision-makers need the right intelligence

to base decisions on and this is likely to be a more

urgent requirement in small to medium enterprises, which

comprise the majority in the sector.

“ Understanding your customer is growing

in importance. The industry wants more insight

and whether it’s satisfaction feedback or

collecting information on your customers, how

you handle that… how you analyse that data, how

you put that back into marketing schemes

is absolutely vital.


Peter Martin, Managing Director, Peach Factory

Changing perceptions of value

Many customers will be increasingly driven by value for

money and perceived value added, but do not necessarily

expect to pay for it: for example being able to access free

wi-fi in hotels, restaurants and cafes. As such, the range

of services or facilities offered and expected as standard

has expanded. Customers will be more price-sensitive

in the current economic climate, although employers

emphasised that value is not just about the price, but

about quality and experience.

www.people1st.co.uk 75


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“ Customers want value and a value-added

experience. They don’t want to pay more for it,

but their expectations of the level of service, the

level of facilities that an average pub will offer, has

escalated.


Kate Nicholls, Strategic Affairs Director,

Association of Licensed Multiple Retailers

Changing nature of loyalty

The nature of customer loyalty is changing. With so

much choice and competition some commentators

feel that there is increased ‘brand promiscuity’ or interchangeability

between certain types of products and

services. This can be more evident at the lower end of

the market where there is less product differentiation

and where pricing is more often used to distinguish

products and influence purchasing decisions. Today,

loyalty means being on a list or catalogue of preferred

products or services. In competitive markets this presents

a challenge for businesses trying to build or maintain

brand loyalty, and so other factors, such as quality, need

to be considered.

“ There is more choice and people are

taking advantage of it, so we see massive brand

promiscuity and many operators will say this is

the most competitive market they’ve known in 30

years. Loyalty is incredibly important because you

want people to come back, but now it is about

being part of someone’s repertoire of places to go.

It’s not necessarily the place you go to every week

like going to the local pub used to be, but you’re

on their list of places, so it looks different.


Peter Martin, Managing Director, Peach Factory

Future Trends | Chapter 5

Service as the differentiator

With rising expectations, increased competition and

knowledgeable customers looking for both value for

money and good quality, there was a strong message

from commentators that the service provided – and the

people providing that service – were going to be the

crucial differentiator in the future. These areas alone can

make a business stand out and drive customer loyalty.

“ When people go back and talk about where

they stayed… They might say yes, it was a lovely

room, but they don’t say it was nice carpet, nice

curtains – that’s a given. All they talk about is the

experience, the service, and the memories. And

that is really the thing that we have to remember;

we are selling memories and experience. It’s not

selling the bricks and the mortar.


Sean Wheeler, Area Director of Human Resources,

Dorchester Collection

Personalised, tailored service

Customers are increasingly diverse in their tastes and

expect businesses to tailor their product and services

to them as an individual. It implies a more proactive

approach to anticipating customers’ needs. This is

particularly evident in the increased engagement, profiling

and segmentation of customers through research, which

results in the delivery of a more personal customer service

experience, especially at the luxury end of the market.

‘Last minute’

There has been a clear trend towards last minute

booking in recent years and this is expected to increase

as technology makes it easier to book hotels and

restaurants, often while on the move. Being able to

search and compare cheap deals online brings the

necessary information to the consumers’ fingertips.

Financial uncertainty also has a bearing; where in the

past customers would have booked a summer holiday

months in advance, this behaviour is changing. People

are now waiting until nearer the time to book a holiday

to ensure they have the funds available or that they are

still working when they plan to take their holiday. This is

then compounded by fears that travel operators may go

out of business.

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Chapter 5 | Future Trends

2. Product and market trends

In addition to changing customer behaviours, wider

product and market trends are emerging. Some have

implications for the sector as a whole, such as rising

costs, while others, like diversification, are drivers within

particular industries.

Resilient sector but rising costs

There is concern that food costs will rise further,

particularly in the coming year following a poor summer

and harvests. This will challenge businesses to keep

their costs low while still buying sustainably and meeting

consumers’ expectations around value and quality. In

the current climate rising costs are difficult to pass on to

price conscious customers, at least in markets that are

largely price driven and in which competition is fierce. For

businesses operating in these markets, rising costs could

potentially impact on already tight profit margins and have

an impact elsewhere in the business. Our research has

shown that employers most often responded to difficult

trading conditions by either increasing (30 percent) or

decreasing staff hours (26 percent). 21

“ The overall issue is that there’s going to be

upward pressure on input prices. And while selling

prices can’t be pushed up because of consumer

demand, profitability is going to suffer.


Peter Backman, Managing Director, Horizons

Discounting and voucher culture

Employers highlighted the voucher and discounting

culture as a key trend, although it is less prevalent in

some parts of the sector, such as hotels and pubs. The

product, business model and the market – typically the

low or budget end where greater emphasis is placed on

price – will also determine use. The economic climate and

customers looking for added value and bargains is partly

driving the trend, as is technology as customers can now

easily search for deals online – all in the context of an

increasingly competitive market.

“ Vouchers are the antithesis of loyalty

because they just encourage the customer to get

the cheapest price. Operators are not building

loyalty through these schemes. The businesses

that are building loyalty are doing it through

offering value for money and good service.


Peter Backman, Managing Director, Horizons

21 2012 People 1st Employer Survey

22 ‘Tomorrow’s tourist: fluid and simple identities’. Ian Yeoman. Journal of Globalization Studies, Vol. 1 No. 2, November 2010 6–28.

www.people1st.co.uk

Some employers fear that the culture is counterproductive

as consumers are becoming conditioned to

expect offers and discounts as the norm, with prices

consequently being driven down. In the longer term this

may mean less revenue, declining profit, and an inability

to invest in the business and workforce. However, others

have experienced success with discounts and vouchers

and believe its appropriateness depends on the business

model, and whether the business is able to upsell and

create return business.

Market opportunities

Our consultations with employers and industry

commentators highlighted a number of growth

opportunities in specific markets:

• Young people – despite high levels of unemployment,

young people continue to be important for the dining

out and drinking markets, and continue to spend. This

is expected to continue as this generation has grown

up in a time where eating out has become the norm,

not just something for special occasions.

• Female and family market – women are increasingly

being recognised as the chief decision-makers and

purchasers of hospitality and tourism related products,

with children and families an important element in

this. Some businesses are increasingly aiming their

marketing at the female ‘opinion formers.’

• Corporate market – interviews suggest that the

corporate customer is cutting back on events and

conferences, and using cheaper products e.g.

business travellers staying in budget accommodation,

the standard of which is becoming more reliable due to

increasing competition and the prominence of chains.

• Increase in niche products and markets – lots of niche

product development and new markets are being

established due to a more diverse ‘fluid identity’ among

customers with a desire for novelty, innovation and

new experiences, 22 e.g. boutique hotels and ‘grandtravellers’

– grandparents who take the grandchildren

on holiday.

• London market – London is seen as a

hypercompetitive market, very different from the

rest of the UK and is at the forefront of new concepts

and trends, as well as being a growth market for

big brands.


“ We’ve seen a sort of sanitised nostalgia in

London where you’re getting a recreation of cask

ales and gin palaces, and you’ve got this back to

basics approach of everything seems to come on

a wooden platter, a pie and a pint kind of thing,

which is deliberately retro. It is partly looking back

at a golden age and the recreation of nostalgia

that that happens inevitably in a recession and in

a period of austerity.


Kate Nicholls, Strategic Affairs Director,

Association of Licensed Multiple Retailers

Local and community

Some commentators believe that recognisable big

brand names become more important during difficult

economic times as consumers feel more reassured by

them. However, there is a trend in some markets for

consumers to move away from big brands to support

local, community brands. Some larger businesses, for

example pubs, are aware of this trend and are investing

in unbranded outlets and in the local community. There is

also evidence that some businesses are engaging more

with local communities; not just by making use of local

supply chains, but also by engaging with schools and

education establishments.

“ Within the pub division, the big change that

we have noticed is people moving away from

big branded businesses and more towards local

and community ones. So within that we have

allowed pub managers pretty much 100 percent

autonomy of their business and in all our pubs we

have a large focus on using local producers and

organically sourced food products. So there are a

lot of community links and with the pubs that has

been a major factor in the success that they have.

When people come into the pub, the food is of an

extremely high standard but the local customers

come and also feel as if they have got a little bit

of ownership of it – they can see the money going

back into the local community.


John Kelly, Head of Group Training,

Restaurant Group

Although it is early days, the emerging food labelling

scandal may have a significant bearing on any future trend

toward local, community brands and supply chains which,

by their nature, can offer greater transparency and quality

assurances to consumers.

Future Trends | Chapter 5

Industry product and market trends

Pubs

A key trend and one that is set to grow in the future is

the diversification of pubs to become more food-led. The

proportion of average UK pub turnover that food accounts

for continues to rise each year. Closures continue mainly

in traditional pubs, although the industry has seen

businesses innovate and reinvent themselves. There are

also new opportunities in larger food-led pubs and in

niche areas focusing on quality and authenticity;

for example, cask ales and late night cocktail bars.

“ Relatively small traditional outlets are

closing and the ones that are opening are bigger

and they are food-led. I think the trend towards

food will accelerate and I think you will continue

to see the emergence of niche operators,

particularly at the late night end. So I think you will

have a more diverse industry as a whole.


Kate Nicholls, Strategic Affairs Director,

Association of Licensed Multiple Retailers

Restaurants

Recent trends include new concepts in burger, chicken,

hot dog and street food restaurants, with many focusing

on broadening the range of value meals for customers on

a budget. However, any advantage can be short-lived in

this fast-moving and highly competitive market.

Hotels

The hotel industry increased 4.5 percent in value in 2011,

after experiencing two years of decline. 23 Early indications

were of an increase in business in 2012 driven mostly by

the London market, which has higher occupancy rates

and revenue per available room. So far, the expected

subdued business levels in the London hotel market

post-Olympic Games has failed to materialise.

The luxury end of the market is still growing as affluent

customers continue to spend. This end of the market

is labour intensive, relies on skilled staff to deliver high

quality customer experiences and, as such, is likely to

drive future job growth. New hotels are being built at the

budget and four and five star end of the market, which

will see an improvement in accommodation in the future,

although there may be a risk of overstock.

23 Keynote: Hotels market report 2012. http://www.keynote.co.uk/market-intelligence/view/product/10569/hotels. Accessed 08/02/13

www.people1st.co.uk 79


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Chapter 5 | Future Trends

“ I think’s a trend that’s going to continue and

will result in better stock in the future. A lot of

hotels are opening at the moment.


Martin Couchman, Deputy Chief Executive, BHA

A more upmarket offer is replacing the traditional bed and

breakfast, as chains move in to the budget market with

newly built hotels.

3. Technology and social media trends

Embracing social media and having an

online presence

Our research with employers indicates that having

a strong online presence and positive approach to

embracing social media is becoming increasingly

important for interacting and communicating with

customers, and that this is set to continue in the future.

Websites such as Twitter, Facebook and Pinterest are

particularly popular with young people and it is a growing

communication channel enabling businesses to tailor

marketing messages to the individual rather than a

mass market. They are also an important influencer in

decision-making and purchasing habits.

Hospitality businesses have tended to be slow adopters

of social media and online technology, mainly due to a

lack of understanding, time or money to invest in it, or a

fear of negative reviews. However, many businesses

have successfully embraced social media, investing time

and resources, and where there have been negative

reviews, addressed them proactively as part of a

managed process.

“ There are always early adopters of any

technology and there are some people who are

way ahead of the game in using social media in a

positive way. Yes, there are risks but I think that

with processes in place to manage that you can

always turn any piece of bad news into a positive.

The people who do it well have invested really

heavily in social media and have got it right, and

the message that I get from operators is that it is

an all or nothing thing – you can’t just dip your toe

in the water and have a token presence. You’ve

got to continue the investment and you need to

proactively manage it as you would do any other

part of your business.


Kate Nicholls, Strategic Affairs Director,

Association of Licensed Multiple Retailers

www.people1st.co.uk

While interviews suggest that businesses will need to

become smarter with social media and online technology

in the future and face up to the challenges and

opportunities, it was also emphasised that there is

no one-size-fits-all approach and that businesses really

need to understand their business and customer profile

before adopting it.

Future workforce and skill needs

Future skill needs

Given the key issues likely to impact on the sector in

the future, what will the skills implications be and what

possible changes will there be in the workforce? In the

2012 People 1st Employer Survey, we asked employers

to identify which skills they thought would be important

to their business in the next 3-5 years. Overwhelmingly,

employers identified customer service skills as the most

important (88 percent) and this fits well with the customer

trends expected to impact upon businesses in the

sector (figure 24).

Management and leadership was the next most important

future skills need (69 percent) according to employers.

It is generally accepted in the sector that managers often

lack the experience to excel in their roles and that there is

a demand for good managers. Employers clearly think

this will continue in the future. Some of the areas

employers highlighted that managers need to develop

their skills in include:

• Understanding of product excellence

• Managing a more diverse, flexible workforce

• Increasing responsibility for engaging their staff

• Finance management

“ One area that becomes more important

is revenue management. You need to be able to

segment your products by pricing for different

customers and it’s about having a good,

sophisticated revenue management system to do

that. So it needs more of a quantitative, analytical

understanding for a manager.


Ian Yeoman, Associate Professor,

Victoria University of Wellington

This skills need underlines earlier observations about the

importance of management and leadership in effective

employee engagement, staff retention, and sound

business decisions and strategies. Tackling this need has

the potential to impact on many aspects of the business

and its workforce.


Social media in a hospitality business

With the rise of a wide range of popular social media

platforms, from Twitter and Facebook to Google+

and Pinterest, there is a never-ending array of places

people can access information.

Embracing social media can open doors to both new

and existing customers in an exciting way. Many large

organisations will have the time and money to invest

heavily in social media to promote their offering and

ensure that accounts are managed carefully and kept

up to date. For the majority of hospitality and tourism

businesses, however, this is not an option. Getting

the basics right from the beginning will provide a

good platform to build on and offer businesses the

opportunity to find out if social media is right for them.

The basics

• Choose your social media platforms – where are

your customers and what will benefit you most? Be

selective and focus – it’s better to do one well, than

three or four poorly

• Keep it business focused – don’t say anything you

wouldn’t say in a business meeting

• Don’t just talk at people – ask questions and have a

conversation

• Update your chosen platform regularly – you can do

it from a smartphone quickly and easily – and at a

time people will see it

• Keep it short, topical or relevant – but not

controversial

• Evaluate your results. Track followers and likes,

click-throughs, and interactions and the take-up

on deals.

Starting out

• Look at what competitors are doing both for

inspiration and to make sure you’re different enough

to attract users

• Use social media tools such as Hootsuite to

manage your social media accounts so that you

can plan posts in advance

• Develop a calendar of posts a week or a month in

advance and supplement this with other relevant

posts. It will take less time and mean you can plan

to post regularly

Future Trends | Chapter 5

• Remember, images and video get more views so

use these if you can

• Make 1-2 people responsible for the account and

change the password when someone leaves

• Use #tags and themes to create searchable

content and trends

• Have a conversation with followers and attract

someone’s attention by referring to them directly

• Be clear about what you want readers to do

• Social media should be part of your overall

communications strategy, so make sure you refer

people to your website where they can get more

information. Remember, a lot of people access

social media from smartphones, so make sure your

website is easy to read on them!

• Make sure you advertise your account username

on your website, job advertisements, in business

locations and on marketing collateral so you’re easy

to find

• Keep it fresh – don’t say the same thing the same

way all the time. Mix it up!

For more advanced users

• Use social media to get feedback – good or bad

• Host live ‘chat’ sessions to create conversations

• Promote #tags for special events and activities

• Promote offers and advertise deals through your

social media, but limit it to a number or timeframe

• Run competitions through social media

• Invite people to comment or submit posts – but be

prepared for them to be honest! If they don’t like

something, they will tell you, so you need to plan

how to respond

• Respond to a negative comment, but don’t panic

and try to move the conversation offline.

Managing social media carefully should always be a

priority – remember that it is public and anyone who

wants to can see it. Don’t let this stop you from using

social media, you just need to be considerate, flexible

and take time to get to know your audience. Your

social media accounts won’t be an overnight success,

but with a little thought, creativity and patience, it can

have a real impact.

www.people1st.co.uk 81


82

Chapter 5 | Future Trends

Figure 24: Skills important to the business in the next 3-5 years

Source: 2012 People 1st Employer Survey

Workforce trends

In the coming years Working Futures projections show

that the hospitality sector’s workforce is expecting a net

increase of six percent (compared to an average of four

percent across the economy as a whole) (table 47).

This amounts to additional growth of 109,500 workers

employed in the sector by 2020. 24 However to cope with

www.people1st.co.uk

Customer service skills

Management and leadership

Sustainability

Effective use of social media in a business environment

e-Marketing skills

Basic computer literacy/using IT

Catering to guests/customers from abroad

Access to business support services

Advanced IT or software skills

24%

30%

36%

35%

42%

48%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

58%

69%

those leaving the sector, 28 percent of those working in

the sector will need to be replaced, so in terms of total

demand the sector’s workforce will increase by 660,200

(34 percent) by 2020.

Table 46 shows employment projections to 2020 by

occupational group, using accommodation and food

services data as a proxy for the sector.

Table 46: 2013-2020 employment projections – hospitality (accommodation and food services)

2013 2020

Expansion

demand

Replacement

demand

88%

Total

demand

Managers and senior officials 327,500 359,400 31,900 101,800 133,700

Professional occupations 54,800 63,800 9,000 14,200 23,200

Associate professional and technical

occupations

Administrative, clerical and secretarial

occupations

73,300 87,400 14,000 17,600 31,600

105,600 109,300 3,700 34,600 38,400

Skilled trades occupations 286,400 245,900 -40,500 80,300 39,800

Personal service occupations 75,400 85,500 10,200 20,800 30,900

Sales and customer service

occupations

124,600 130,300 5,700 31,500 37,100

Transport and machine operatives 51,300 51,400 100 15,600 15,600

Elementary occupations 840,500 915,900 75,400 234,400 309,800

Total 1,939,300 2,048,800 109,500 550,700 660,200

Source: Working Futures 2010-2020 (2008), UKCES/IER/CE, electronic resource

24 20 Source: Working Futures 2010-2020 (2008), UKCES/IER/CE, electronic resource


Future Trends | Chapter 5

Table 47: Proportional changes (each percentage shows the proportional change in workforce numbers

from 2013 levels)

The occupations expected to see growth are managers

and senior officials and elementary occupations, so

these key roles will drive the skills the sector needs.

These occupations fit well in terms of the types of

skills employers say they will need in their businesses in

the future (table 47).

Managers will need a range of skills, including

management and leadership, generic business

management, social media and marketing, and employee

engagement skills to increase up to date and professional

business practices. For managers of small businesses

this will mean a wide range of skills and, in some

instances, may mean certain tasks are outsourced, or

new roles are created to support managers, which may

ultimately lead to growth.

These may be technical roles supporting social media

and online business practice; marketing and market

research roles to understand their markets and engage

customers; specialist roles such as managers focused

on human resource or quality issues. Clearly, many small

businesses will need support initially to be able to access

these skills or resources, perhaps through mutually

beneficial local employer networks, business dragons or

angels, or else free/subsidised business support in key

areas such as business planning and finance.

For elementary occupations the requirement will be

for more customer service and customer facing skills.

Given the fact that the quality of staff and the people

providing that service are likely to be a key differentiator

in driving customer loyalty in the future, the standard and

sophistication of this training may need to change to meet

Expansion

demand

the trend of rising customer expectations. This implies the

training should also be progressive, linking and creating

career pathways from entry level positions into more

senior roles in customer service and management, or else

specialist or craft occupations. In diversifying industries

such as pubs, there will be an increasing need for multiskilled

front-line staff.

Summary

Replacement

demand

Total demand

Managers and senior officials 10% 31% 41%

Professional occupations 16% 26% 42%

Associate professional and technical occupations 19% 24% 43%

Administrative, clerical and secretarial occupations 4% 33% 36%

Skilled trades occupations -14% 28% 14%

Personal service occupations 13% 28% 41%

Sales and customer service occupations 5% 25% 30%

Transport and machine operatives 0% 30% 30%

Elementary occupations 9% 28% 37%

Total 6% 28% 34%

Source: Working Futures 2010-2020 (2008), UKCES/IER/CE, electronic resource

• Among a number of potential drivers presenting either

opportunities or barriers to business growth, customer

trends emerged as the most important concern for

the future, specifically changes in customer spending

patterns and changing customer tastes

and preferences.

• It was clear that these changes could represent both

opportunities and threats to businesses. Adequate

preparation for the future could be a deciding factor

in being able to meet the trend of rising customer

expectations, which is already in evidence.

• Underlying these future trends is a belief that the

current economic crisis is changing customer values

and behaviours, which have become more cautious

and value conscious, though this is unlikely to be at the

expense of quality.

• Technology and social media have led to customers

being increasingly knowledgeable and well informed

about the products and services they receive and the

onus is on businesses to not only meet but exceed

these expectations in order to compete.

www.people1st.co.uk 83


84

Chapter 5 | Future Trends

• To meet these expectations, investment in improved

quality and standards in a service driven sector

should focus on increasing the skills of those working

in the sector.

• With rising expectations, increased competition and

knowledgeable customers looking for both value for

money and good quality, there was a strong message

that the service provided – and the people providing that

service – would be the crucial differentiator in the future.

• A key challenge for businesses will be to look at

strategic practices and planning, including more

sophisticated ways of building sustainable profits and

brand loyalty, given that certain business practices,

for example extensive discounting, may actually

undermine these objectives.

www.people1st.co.uk

• Social media was also a key trend for the future in

hospitality and tourism. Increasingly we are finding

that a positive approach to social media is important

in engaging customers, a trend that is expected to

continue. Many sector businesses are now embracing

social media as part of a strategic, managed process.

• Inevitably customer service skills were the most

important future skills need arising from the trends

identified, followed by management and leadership

skills. The implications of these skills needs could drive

a need for higher level skills in particular occupations,

create employment growth or a need to outsource

core functions.


Afterword

What these future skills and labour

needs mean to us today

As with many future

predictions, the trends and

probable future skill needs

outlined in this chapter are

firmly rooted in the present

and are largely an escalation

or a refinement of today’s

trends. As a result they are

likely to worsen the current

skill gaps and shortages

outlined in chapters three and four of this report.

Customer service remains a critical skill gap in the current

workforce, yet 88 percent of employers believe that

customer’s expectations will rise and that there will be

an increased focus of differentiating and personalising

service to specific types of customers. It is hard to see

how this will be possible when customer service remains

the skill gap that the majority of employers are reporting,

largely as a result of high levels of front-line staff turnover.

Similarly, if front-line staff lack fundamental job-specific

skills, it is unlikely that customer expectations will be met.

Given the rising challenges and opportunities facing

businesses, it is not surprising that over two thirds of

employers believe management skills will become

more important. Again, employers currently struggle

to recruit skilled managers and a high proportion of

employers believe that their current managers lack the

necessary skills. It is hard to see how future managers

will possess these types of skills if staff are not being

adequately supported to develop into supervisory and

management positions.

In areas where skill gaps have been addressed, there

has been a noticeable difference, although there is still

work to do. Over the past five to ten years, the focus on

chefs being able to prepare and cook fresh ingredients

has risen in prominence. Many businesses in the 2012

People 1st Employer Survey believe that sustainable

food will rise in importance and no doubt recent concern

about what people are eating will mean that this becomes

even more of a priority. Future trends also suggest that

pubs are likely to continue to increase their focus on

food, which will mean a greater demand for chefs. The

sector needs more skilled chefs finishing college and

being trained in the workplace, which reinforces the

Future Trends | Chapter 5

need to protect the quality of college provision among

funding cuts and the importance quality professional chef

apprenticeships.

If the recruitment of transient staff, which results in the

current high labour turnover, remains unchecked it is

difficult to see how the sector can successfully take

advantage of many of the probable trends outlined in

this chapter. Labour turnover, the resulting high training

and recruitment costs, and lost revenue from staff not

possessing the skills a business requires is arguably the

biggest cost to the sector – and many employers believe

that costs will increase in the future. Is this an opportunity

to focus on staff retention and reducing energy and food

costs? Only time will tell, but the ability to meet these

trends largely rests with employers, who need to support

those entering the sector through recognisable career

pathways, recruit stable permanent full-time and part-time

roles, and develop staff through training that shows a

return on investment.

These future trends also intensify the pressure on

smaller businesses. The types of management skills

required to meet increasing customer expectations, last

minute booking and the rise of social media are critically

important, but if four out of five small businesses do not

currently seek support, how best do we tackle this? It is

going to be crucial to bring together business support,

but also find a way to put in place strong incentives to

encourage employers to seek support in the first place.

Martin-Christian Kent

Product Development Director, People 1st

www.people1st.co.uk 85


Special report:

The London 2012 Olympic

and Paralympic Games


Introduction

After years of planning, preparation and anticipation,

the London 2012 Olympic and Paralympic Games

finally arrived in London in July last year.

Despite various concerns about costs, security and

transport, the nation breathed a collective sigh of relief

when the opening ceremony was staged. Most people

agreed it was a fantastic spectacle that far exceeded

expectations. As the Games progressed, this relief turned

to an increased enthusiasm and swelling of national

pride as we realised that despite various pre-Games

qualms, the UK was more than capable of hosting a

tremendously successful international event and offering

a world-class welcome.

News reports from across the world were almost

universally complimentary about London 2012.

For example, Peter Wilson of The Australian wrote:

“ It is one thing for the British to thrash

Australia in the medals table of the London

Olympics. But now the Games are over, it is

just as clear they have knocked Sydney off its

pedestal as the best host of a modern Olympic

Games. As awful as it is to admit, London 2012

was bigger, slicker, almost as friendly and more

thoughtfully planned than Sydney in terms of the

legacy it will leave the host city... It is, I’m afraid

to say, bronze for Barcelona, silver for Sydney,

and gold for London. 25


Changing perceptions

In January 2013, the influential publication ‘Country

Brand Index 2012-13’ was released. This indicated some

changes towards perceptions of the UK as a whole,

caused in no small part by London’s role as Olympic host.

In terms of ranking against other countries, the research

found that the UK has moved up:

• One place to fourth in the world as a nation brand

• One place to fourth in the world in culture

• Three places to ninth for welcome and, significantly,

is now in the world top ten.

The Olympics clearly had a strong positive influence on

the UK as a brand, but what was the hospitality and

tourism sector’s experience of the Games and how can

we improve and capitalise on this in the future?

The London 2012 Olympic and Paralympic Games | Special Report

In anticipation of the Games

In 2011, People 1st undertook a large-scale survey

into the sector’s expectations of London 2012. 26

From this we learned that there were significant

differences in expectations, depending on where

the business was located, with London businesses

holding higher expectations. For example, a quarter of

businesses expected the Olympics to increase their

sales/turnover; this rose to 52 percent for businesses

in London. Similarly, 12 percent expected to increase

their staffing levels over the Olympics compared to

33 percent in London.

Despite the expectation that the Olympics would affect

business levels, the 2011 survey found that the majority

(86 percent) had not taken any steps to prepare in

advance of the Games. Overall there was widespread

acknowledgment and agreement that the Games would

benefit the sector as a whole; 90 percent agreed that

the Olympics would be a good thing for the sector (92

percent in London), while 77 percent agreed that it would

be an opportunity for the sector to secure tourism for

years to come (79 percent in London).

Experience of the Games

25 www.theaustralian.com.au/sport/london-games/british-take-gold-as-best-olympics-games-hosts/story-e6frgdg6-1226448817536

26 2011 People 1st Employer Survey. Note, this covered the wider sector of hospitality, leisure, travel and tourism.

27 2011 As evidenced from the People 1st Employer Survey

In line with pre-Games expectations, businesses’ actual

experience of the Games differed, depending on their

location. For example, when asked what impact the

Olympics had on their organisation, most (61 percent)

said none (figure 26). The remainder were evenly

balanced; 19 percent said it had a positive effect and

19 percent negative. Pubs, bars and nightclubs were

the most likely to have reported a positive effect to their

business (26 percent).

In questioning this lack of impact, business location was

the most common reason given (i.e. that it was too far

away from London/the Olympics), which was mentioned

by almost a third (32 percent) of respondents.

Consequently, a large proportion of businesses

(49 percent) admitted that they had made no adjustments

to their business during the Games, although some

(27 percent) held themed events or promotions.

In spite of this, respondents’ reports that their financial

activity during the Olympics was better than expected

are encouraging. Although only a quarter of businesses

expected the Olympics to increase their sales or

turnover, 27 reports from employers post-event indicate

that over a third (34 percent) actually had better sales or

turnover over the period (figure 25).

www.people1st.co.uk 87


88

Special Report | The London 2012 Olympic and Paralympic Games

Figure 25: Expected and actual increase in sales or turnover due to the Olympics (Great Britain)

Expected increase

Actual increase

Source: 2011 People 1st Employer Survey; 2012 People 1st Employer Survey

www.people1st.co.uk

0% 5% 10% 15% 20% 25% 30% 35% 40%

Figure 26: Impact of the Games (London and Great Britain)

Positive impact

No impact

Negative impact

19%

20%

19%

Source: 2012 People 1st Employer Survey

32%

45%

24%

61%

34%

Those employers who saw a rise in sales or turnover saw

an average of 18 percent increase, but those whose

sales or turnover fell reported up to a 20 percent drop.

In terms of staffing levels, the reality matched closely

with expectations; 11 percent expected staffing levels to

increase and ten percent ended up increasing them.

London

0% 10% 20% 30% 40% 50% 60% 70%

As the Games were primarily concentrated in London,

it was always likely that businesses in the capital would

stand to make the most (or least) from the Olympics.

Examining London’s experience, noticeably fewer

businesses said that it had no impact (45 percent

compared to 61 percent Great Britain). A similar proportion

said it had a positive impact (20 percent London and 19

percent Great Britain), but rather more unexpectedly, a

higher proportion said it had a negative impact (32 percent

London compared to 19 percent Great Britain) (figure 26).

Great Britain

London


Preparation before the Games

The Strand hotel wanted to make sure it was well

prepared for the Games and began planning in

January 2012. The company introduced a number

of initiatives to ensure staff understood the impact

the event would have on the business and could

maximise the commercial opportunities it presented.

Monthly Olympics Committee meetings with managers

were introduced to raise awareness of the event

and get people thinking about the implications on

the business and their department. They covered

topics such as security, transport, logistics, supply

and deliveries, staffing and technology and included

a talk from the London Organising Committee of the

Olympic and Paralympic Games (LOCOG) and a visit

to the Olympic Village.

The hotel hosted the Danish Olympic Committee

and as part of its preparation, hotel staff visited

Copenhagen to meet with the committee, build

relationships and understand what their needs would

be in advance of their arrival for the Games.

The hotel also worked with i-LUKA, an events agency

that had plenty of experience of past Olympics

events and shared its knowledge through a series of

workshops on how the Games would impact on the

hotel operations.

“This really helped us to understand what the event

would mean for us operationally. We realised that we

would be quiet before and afterwards but that the

event itself would be really busy and this insight was

so helpful with our planning.” says Nadia Simmons,

HR Manager.

These activities meant that managers were well

informed and were able to put plans in place to ensure

each guest had a positive experience during the

Games. For example, they knew guest profiles would

change and average stays would be longer – up to

two weeks or more. This meant that there would be a

greater need for laundry services and greater variety

of food and drinks. Shift patterns would also need to

change, for example higher volumes of guests would

require breakfast before 9am when they would go off

to the Games and there would be a higher demand

The London 2012 Olympic and Paralympic Games | Special Report

Case study – Preparing for the Olympics

The Strand Palace Hotel is a three star hotel with 785 bedrooms located in

central London. Given its proximity and the scale of the event, the Olympics

had a huge impact on the operation of the hotel during summer 2012.

for room service in the evenings. There would also

be changes to front office requirements, with quieter

periods during the day and a need for all front of

house staff to be trained in Games-related information.

Impact and legacy

In line with the experience of many London hospitality

businesses, occupancy rates were high during the

Games, but quieter either side. Media reports and

travel advice before the Games had led many to

believe that London would be extremely busy and

expensive during the summer, so some leisure tourists

stayed away. Corporate business also slowed down

as the city wound down prior to the Games and many

staff worked from home during the Games.

“It was quite clear the type of client profile was

very different. These were guests who were here

specifically because of the Games and stayed for

longer, while the leisure tourist who stays for short

periods and comes to see the sights or go to the

theatre tended to stay away during that period,” said

Nadia.

Nadia believes the event itself was fantastic and has

helped to raise the profile of the UK and London as a

destination and transformed people’s perceptions of

customer service in the hospitality industry here. While

the economic climate may mean that the impact on

business levels is not immediately apparent, they have

already seen returning guests and Nadia is very clear

that longer term the impact will be extremely positive.

“The reality was that it was an extremely positive

experience and has really helped to showcase

London and the UK and transformed perceptions

of British customer service. I have heard so many

glowing reports and we have already seen repeat

business from international guests who stayed with

us and I have no doubt that once the economy picks

back up the hospitality sector will reap the rewards of

a fantastic Olympic Games.”

www.people1st.co.uk 89


90

Figure 27: Sales or turnover change

(London and Great Britain)

London

Great

Britain

28%

34%

26%

Source: 2012 People 1st Employer Survey

In addition to being asked about the general impact of

the Games, businesses were also asked how it had

directly affected their finances. In London, 45 percent

of businesses claimed to have seen a decrease in sales

or turnover (39 percent across Great Britain), with just

28 percent seeing an increase (34 percent Great Britain)

(figure 27).

For those businesses that did see an upturn in sales or

turnover, the increase in London was almost double that

of the rest of the country (average increase of 37 percent

compared to 18 percent). In short, the Olympics’ effect

on sector businesses varied greatly and even within

London there appears to be limited consistency.

Looking at proximity to Olympics venues sheds some

more light on this.

Among businesses that fell within three miles or less of

Olympic venues, 33 percent experienced an increase

in sales or turnover, which fell to 14 percent for those

located between four and ten miles away (figure 28).

However, contrary to what we might expect, sales

or turnover increased by 47 percent for those 11-20

miles away. It seems that for businesses within London,

www.people1st.co.uk

26%

45%

39%

0% 20% 40% 60% 80% 100%

Figure 28: Proximity to Games venues and sales

or turnover changes (London)

3 miles or less

4-10 miles

11-20 miles

Source: 2012 People 1st Employer Survey

33% 22% 44%

2%

1%

Increase

Little/ No

difference

Decrease

Don’t

know

14% 27% 55% 4%

47% 28% 25%

0% 20% 40% 60% 80% 100%

Increase

closer proximity to Olympic venues was no guarantee

of increased sales and that, actually, being situated in

outlying areas of Greater London was actually more

beneficial.

Some businesses within London felt that the warnings

issued about congestion within the city were

counterproductive. News reports for many months before

the Games warned about impending travel disruption

to Londoners’ usual journeys. These fears were built

upon by press statements and travel announcements

with everyone from the Mayor of London to Transport

for London pleading with people not to travel unless

necessary. Such was the severity of these warnings

that ordinary Londoners began avoiding central London

as much as possible and the usual trade for pubs and

restaurants was significantly reduced.

In many ways this campaign to reduce congestion in central

London was hugely successful in terms of easing transport

issues, but was detrimental to hospitality businesses’ trade.

Compounding this problem was the fall in international

visitor numbers throughout the summer months. It seems

that the average holidaymaker was put off travelling to

London through fears of high prices and overcrowding.

In summary, the dual effect of both London residents and

holidaymakers staying away from central London turned

what should have been a bumper summer for hospitality

businesses in London into a very difficult one.

The future

In many respects, the legacy and sustained impact of the

Games was the true goal of hosting the event. As outlined

earlier, it has contributed to ‘Brand UK’ rising up the global

rankings and reversed discouraging misconceptions

about the UK.

The challenge now is to build on this newfound international

recognition and ensure that the hope that the Games would

secure tourism for years to come (as expected by 77

percent of businesses pre-Games) is realised.

Little/No difference

Decrease

Don’t know


Second Floor

Armstrong House

38 Market Square

Uxbridge

UB8 1LH

Tel: 01895 817000

Fax: 01895 817035

info@people1st.co.uk

www.people1st.co.uk

@People1stssc

The People 1st State of the Nation 2013 report has received co-investment from the UK Commission for Employment and Skills

through the Employer Investment Fund.

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