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Looming Brexit Is a Nightmare for Restaurants and Staffing

New data reveals a “shock drop” in number of migrant-workers. Hospitality chief says it will “severely impact” the industry

March For The Many Takes Place In Liverpool Photo by Jeff J Mitchell/Getty Images

The leading U.K. trade body for the hospitality industry has reiterated its concerns for the impact of Brexit on restaurants and bars. It follows new data released, which shows that non-U.K.-born migrant-worker numbers have fallen by 58,000 between April to June last year and the same period this year. UK Hospitality says it will “severely impact” and “undermine” the sector.

Human resources body, CIPD, has published a new report “The Labour Market Outlook” for the last quarter of 2018, based on survey responses from 1,002 employers across the U.K. It found:

  • Sustained high employment and demand for skills and labour. This however, is compounding the pressure on recruitment, with employers reporting greater difficulty in hiring.
  • Combined with a “shock drop” in the number of both EU and non-EU citizens in employment in the U.K., the overall picture is one of reducing labour supply.
  • The effect of this is leading to higher workloads for existing staff, problems meeting customer service objectives, and loss of business.
  • The impact on productivity growth, along with uncertainty over Brexit, is having a slowing effect on wage growth despite rises for new starters and key staff.

Commenting on the findings, UK Hospitality chief executive Kate Nicholls said: “The figures released by CIPD make alarming reading for hospitality businesses. With unemployment relatively low, businesses need to recruit from outside the U.K. to augment their home-grown teams and continue to grow.

“We have already voiced our concerns about the ability of employers to recruit post-Brexit, but the worrying reality is that numbers of non-U.K. workers are dwindling, and we haven’t even left the EU yet.

“If the talent pool continues to shrink, then businesses will be unable to invest and grow,” Nichols said.

She then reemphasised the industry’s concern regarding Government proposals which seem to overlook the need to source low-skilled labour. “Even more concerning for hospitality businesses is the Government’s intention to implement an immigration policy that favours higher-skilled technical jobs at the expense of others,” Nichols said. “Restricting potential applicants into the hospitality sector further, when the number of non-U.K. born workers is already shrinking, will be a disaster for the sector.”

The hospitality sector creates £130 billion in “economic activity” and generates £38 billion in tax for the Treasury. As the third largest private sector employer, the industry provides 10 percent of U.K. employment, six percent of businesses, and five percent of gross domestic product.