Low productivity levels need to be urgently addressed in the hospitality and tourism industry with high levels of employee turnover resulting in the sector being 58 per cent less productive (on a per-employee basis) than the likes of manufacturing, a new analysis from workforce development charity People 1st reveals.
In response to the Treasury’s productivity plan released last week, People 1st launches today a new campaign to tackle the low productivity that threatens the sector. It specifically wants to hear from employers on what works best to aid retention and how the industry can collaborate to find solutions. Per employee, the hospitality and tourism workforce contributes only £21,600 to the industry, 53 per cent lower than an employee in retail at £46,000, 39 per cent lower than someone working in construction at £35,000 and 58 per cent lower than a manufacturing worker at £52,000 per head.
A new People 1st report released today explores the productivity issues facing the sector. It calculates that 993,000 new staff are needed by 2022, with the vast majority, 870,000, needed to replace existing employees. This staff “revolving door” creates skills gaps, with over two-thirds of restaurants and hotels (68 per cent) not having a full complement of staff. As a result, the sector’s annual contribution to UK productivity is significantly less than comparable sectors at £46.5 billion due to the skills gaps created by this high turnover. The opportunity identified by the report lies in tackling this, as an improvement of just one per cent in productivity would drive an additional £1.43 billion revenue to the industry.
Simon Tarr, Managing Director, People 1st said: “The causes of low productivity are complex and diverse. It is clear that parts of our industry are trapped in a revolving door of high turnover, increased skills gaps, and reliance on resorting to further transitional, non-permanent staff, to plug those gaps. We believe diversifying recruitment to include older workers and maternity returners as well as putting in place strategies to reduce turnover with a greater focus on career progression, will have a positive impact on productivity.”
“However, we want to tackle this challenge in collaboration with the industry, and are keen to share the best practice of those who know the industry best. That’s why we are launching a consultation today to gather the views of employers to reveal how to tackle this together, head on. The good news is that even incremental improvements can lead to substantial benefits to business and indeed the nation in terms of increased productivity.” The report, The Skills and Productivity Problem,urges employers to improve their staff retention by: Offering more development opportunities for staff that makes them want to stay with employers, and a clearer view of the career progression and promotion prospects. Employing apprentices which are proven to provide a return on investment to employers
Recruiting more maternity returners and older workers into the sector – two key groups that often need flexible jobs – as opposed to relying too heavily on seasonally available employees at this time of year. Louise Smalley, Group HR Director of Whitbread commented: “Our sector has a great opportunity to rise to this productivity challenge. At Whitbread we’ve seen first-hand that making our team members aware of where skills and qualifications can take them makes a tangible difference to motivation, productivity and retention.”
