Attracting Younger Workers to Hospitality – What the Latest Data Reveals, with Kate Nicholls

Episode Transcript

Kate: Traditionally, if you go to France, Switzerland, Germany, being a waiter is a prestigious profession. Going to hotel school is seen as a legitimate route. It’s not valued in that same way in the UK and even going to the States where you’ve got the dedicated training colleges in places like Las Vegas outside the strip. Again, it’s seen as a really clear route through, it’s a valued profession. You’re not looked down upon. I think in the UK, a service profession tends to be looked down upon a little bit more.

Robin: Welcome to the “Innovative Hotelier Podcast” by “Hotels” magazine with weekly thought-provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to the “Innovative Hotelier Podcast” brought to you by “Hotels” magazine. I’m your host, Robin Trimingham, and my guest today is Kate Nicholls, CEO of UKHospitality. And today, we’re chatting about attracting younger workers to the hospitality industry and what the latest data reveals.

This podcast is presented to you by Franke Coffee Systems. At Franke, we think coffee is about more than beans and machines. It’s all about the moment when you create an amazing coffee experience for your customers. Welcome, Kate.

Kate: Nice to be joining you, Robin.

Robin: Well, I really appreciate you taking time to chat with me today. I was very interested to read that your organization has recently published a survey in which you’re detailing how UK citizens view the hospitality industry as a career. So at the high level, what have the findings been like, and what surprised you most about the data?

Kate: What we found is not that surprising. We found that a large number of people didn’t know what hospitality was as a career, didn’t necessarily understand the full breadth of it. In fact, some people struggle to understand hospitality and the concept hospitality. When you talked about pubs, restaurants, hotels, they did understand it. And that really goes back to the fact that for a lot of people in the UK, they see hospitality as a short-term stopgap job, low-paid, lower entry-level qualifications required, as they say, a job, not a career, and they miss the breadth of roles and the seniority of roles that come through with that.

So that was the sort of main headline findings for those who weren’t involved in hospitality. I suppose the surprising thing for us was that three in five wouldn’t consider a hospitality career. And when we looked at people who did work in hospitality, similar proportion of those who worked in hospitality wouldn’t recommend it as a career to our young people. And so, therefore, we’ve clearly got a job of work to do to explain the benefits of hospitality, to explain the diversity of career options, the progression, the meritocracy, the pay, the salaries, the rewards, and also to do a better job looking after our employer brand in the UK

Robin: So, in all of that, how much would you say that the events of the last two years have really impacted people’s perception? Is this like a new problem or something that’s been brewing for quite a long time?

Kate: Well, I think there are underlying issues to do with the perception of hospitality as a career. We knew before COVID we had a 5% vacancy rate. So one in five jobs going unfilled. And, in particular, we had a challenge attracting sufficient chefs and training up chefs to come through. Coming out the other side of COVID, that vacancy rate has jumped to 10% and it’s across all roles, all aspects of the business, senior-level roles, front house, as well as the kitchen.

So clearly, there’s a bigger challenge that we’ve got going on. And I think that’s a global challenge as you restart global supply chains. Everybody seems to be talking about the challenges with getting people to come back. But I think in the UK, the fact that hospitality was first closed, last to open, subject to a sort of yo-yo of openings, closures, restrictions, changes in the way of doing things, people couldn’t get a sense of it being a stable job. And it’s very difficult to convince people that they can have a career if within the space of a couple of weeks, they could be closed down, their job would be lost, or they would find that they couldn’t do the job that they were recruited to do. So I think undoubtedly, COVID has made our job an awful lot harder in terms of impression and perception of the sector as being slightly flaky, slightly vulnerable, a higher risk if you’re going into it than somewhere like retail.

Robin: I find what you say quite interesting because you are a very highly developed, concentrated first-world country in resorts, which are in out-of-the-way places. Of course, there’s a lot of seasonality to employment and you can understand people feeling this way, but you have major city centers. How difficult do you think it’s gonna be to change people’s perception if they’re feeling this way in your country?

Kate: Well, I think it’s going to be an iterative process. We can see it getting better since we reopened around about this time last year. So we can see improvements in people feeling more confident about going back and taking those positions within hospitality. You’re right. We do have a large number of major city centers which operate 24/7 365 days, but we also do have a large number of small, independent businesses in coastal and rural resorts and villages where they do have a highly seasonal business. And I think that’s one of the challenges we need to overcome is to work to ensure we can train those people up so they’re not just working for a concentrated summer season.

I don’t underestimate the challenges though because unlike a lot of other countries, in the UK, we don’t have a history of hotel schools, hospitality schools, catering colleges, where it’s seen as a respected profession and where you can see a route through. So I think that there’s an ingrained bit that we need to work on in the UK population to make sure that vocational training is valued just as much as academic and people can see the routes through.

Robin: So even though you have large employment in hospitality, so people have traditionally trained on the job as opposed to going to specialized schools?

Kate: Yes, increasingly over recent years, the UK government introduced a levy on employers to require them to pay for apprenticeships in work. And that’s led to much more entry-level with no experience, few qualifications, and training up through an apprenticeship, which obviously takes one to two years to complete. At the same time, we’ve then seen a decline in some of our catering colleges and dedicated hotel schools. So this has been a sort of process that’s gone on over the last 5 to 10 years.

But traditionally, if you go to France, Switzerland, Germany, being a waiter is a prestigious profession. Going to hotel school is seen as a legitimate route. It’s not valued in that same way in the UK And even going to the States where you’ve got the dedicated training colleges in places like Las Vegas outside the strip, again, it’s seen as a really clear route through, it’s a valued profession. You’re not looked down upon. I think in the UK, a service profession tends to be looked down upon a little bit more.

Robin: Franke’s fully automatic, easy-to-use machines help you create unforgettable coffee moments your customers crave for because whatever business you are in, we know it’s about more than coffee. Check out how we can help you to make every coffee moment wonderful on coffee.franke.com.

So your jurisdiction’s in an interesting position. To what degree do you think it’s gonna be necessary to enhance compensation or benefits packages in order to attract the desired talent to the industry? And do you think that hoteliers will be able to recoup the cost in higher room rates, or are they gonna have to recover the cost of all this some other way?

Kate: Well, we are already seeing higher wage rates going through and, obviously, the hospitality sector across the globe are facing these challenges. I think they are particularly acute within the UK where we’ve got really acute inflationary headwinds, food and drink price inflation, energy, wage rate inflation. We’ve got the cost of living squeeze with customers, so that inhibits people being able to pass those costs on in the terms of price.

We’re sort of in a middle ground at the moment in the UK There is quite buoyant demand. Our international market is recovering strongly, much more strongly and much more quickly than perhaps we’d anticipated as is the corporate market in hotels. And therefore, they are less price-sensitive as consumers. So we are seeing some of that pass through in terms of price to the end-user, room rates, RevPAR are continuing to remain strong in the UK The wage rate inflation that we’re seeing is currently running at about 13%. And we anticipate 6% to 8% again later this year when the national living wage and the national minimum wage increase. So those are quite significant inflationary headwinds from a wage perspective, a labor perspective.

Of more concern is the fact that we’ve got that 1 in 10 vacancy rate, and that’s meaning that hoteliers are having to cap their capacity, cap their occupancy so as to not sacrifice service levels to continue to offer that value for money experience and also to try and make sure that they can match supply and demand. That’s the bigger thing that they’re grappling with at the moment rather than price per se.

Robin: I see. I know that you are in the midst of what I’m gonna call a major PR campaign to help transform people’s opinions of career in hospitality. What are some of the biggest lessons that you learned by your national ongoing campaign?

Kate: Well, we’re just at the start of that campaign. So we’ve done all of the consumer and focus group research. And it’s a campaign that is explicitly aimed at young people, at those who are looking at entry-level jobs, and their first job. And what we did there was to compare it to other entry-level jobs that they might be looking at. So retail, Amazon distribution, fulfillment centers, office jobs, admin jobs, and that helped us to identify what the USP is of hospitality. The fact that you can come to work and you have fun. You work as part of a team and you have camaraderie. You are at the heart of delivering a great experience to your community. So themes around local hero, having fun, and meritocracy, that ability to go from entry to management within 18 months and high remuneration coming alongside it. So those are the big lessons that we learned from that.

Robin: I think your last point there is quite valid because today around the world, there are lots of general managers of hotels who did start out as frontline workers and they can show that you can have a huge career if you really stick at it. What would you say to a hotelier who’s listening today? What’s the number one thing that a hotel can do to attract and retain career-minded workers in your opinion?

Kate: Well, I do think that COVID gives us an opportunity for a reset, to look afresh at the ways that we do things, and to be more flexible. We talk about the fact that we are a very flexible working place, that we are open, as I say, 24/7. That allows us to give people flexible working practices, which is what an awful lot of workers, particularly younger workers are looking for post-pandemic. And we should make a virtue of that. So we should be looking at the way in which we schedule our shifts, giving people notice of their shifts, that these are two things that came out of the pandemic that people have really valued in the UK

So a lot of businesses have ended split shifts, double shifts. Some businesses are moving to four-day weeks. All of these things that can fit around the needs of the employee, as well as the needs of the business, giving people two to four weeks’ notice of their shifts, making sure that there are weekends off that are scheduled in, all of these things are as important, we found in our research, to the employee as the cash in their pocket. And also making sure you look after them with training, investment in their health and well-being. These are very important factors.

Robin: Can you give us any examples of a brand that’s getting that right?

Kate: In the hotel space in the UK, we have a large number of independents who are doing really well. The Royal Lancaster, which is headed up by Sally Beck, she’s the GM. She’s spearheaded the Hoteliers Charter in the UK, which independent hotels can sign up to, which is sort of a well-being checklist. What we are going to do to commit to our young people. I think Hilton, Accor, Marriott, and Premier Inn, they’re all doing great jobs of making sure that their staff feel looked after and investing in training and upskilling.

Robin: It’s really very reassuring to hear that so many hotels and brands of different sizes have bought into this. We only have a minute or two left here. What would you say is the bottom line? In other words, what’s the real cost of failing to change the perception of hospitality as a career?

Kate: At the moment, we’ve got a 10% vacancy rate. That’s double what it was pre-pandemic, but that was still quite a sizeable chunk of the workforce that was not coming to hospitality. We were also seeing a churn rate of well over 100% in the sector. So the costs of retaining, the costs of training, the costs of recruitment are all there. And more importantly, the cost of running with those vacancy levels means that people are leaving about 20% of their revenue on the table because they can’t fulfill demand.

So we’ve got to get this right, and we’ve got to use COVID as the opportunity to do a big reset and a big refresh of how the industry is viewed. Otherwise, our industry will not grow. The World Travel and Tourism Council said that we were forecasted to grow 3% year on year over the next decade in the UK Pre-pandemic, it was 5%. I would say that the costs of leaving the recruitment challenge unsolved is the difference between 3% growth and 5% growth.

Robin: That’s really quite significant when you think of the millions and millions of pounds that are brought into the UK by the hospitality industry. Kate, I wanna thank you so much for your time today. This has been a very interesting conversation. You’ve been listening to the “Innovative Hotelier Podcast,” brought to you by “Hotels” magazine. Join us again soon for more up-to-the-minute insights and information specifically for the hotel and hospitality industry.

You’ve been listening to the “Innovative Hotelier Podcast” by “Hotels” magazine. Join us again soon for more conversations with hospitality industry thought leaders.