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The first four months: what effect has the Brexit vote had on hospitality recruitment?

It’s been four months since Britain voted to leave the European Union and although the full implications of this decision won’t be known until after Article 50 is triggered – with prime minister Theresa May recently confirming that this will happen at the end of March 2017, meaning an exit from the UK isn’t likely until mid-2019 – figures so far suggest it isn’t all doom and gloom, especially for the hospitality industry.

The good news

For one thing, unemployment fell by 39,000 (to 1.63 million) between May and July – which suggests that, as yet, the job market hasn’t become a victim of the dreaded ‘Brexit effect’. In fact, the unemployment rate is lower than it was a year ago (4.9% compared to 5.5%), and the future looks similarly bright in the world of the hospitality industry – one of the largest employers in the UK – largely thanks to a surge in visitors to the UK. Figures released by the ONS showed that July was a record month for tourists, with a whopping 3.8 million visiting Britain – that’s a 2% increase on the same time last year – collectively spending £2.5 billion (an increase of 4% on the previous year).

This influx has no doubt been spurred by the fact that, post-Brexit, the pound has fallen to its lowest level for more than 30 years – meaning inbound tourists’ money being worth a great deal more. The result is that since the end of June, international flight bookings to the UK have increased by 7.1%, while bookings from Europe for trips to the UK have increased by 5%.

Given that the prime minister’s recent clarification of the timeline for Brexit resulted in the pound falling to a three-year low against the euro and its lowest level against the dollar since early July, this trend looks set to continue. Visitors are coming from further afield too. Cheapflight claims that searches for journeys to Britain from America have doubled, with further increases of 61% from China and 49% from Canada. This will no doubt spark a sharp recruitment drive in related industries such as hospitality, as tourists flock to hotels, bars and restaurants to make the most of the strength of their currencies against the pound.

Also noteworthy is the positive impact that the UK’s Brexit decision has had on the domestic hotel market. As well as the growing numbers of visitors, 2.5 million Brits are opting for ‘staycations’, as the falling pound makes holidays abroad more expensive. This has meant a double boost for tourism, and looks set to give the industry a record-breaking year – with one of the hottest ever Septembers and low interest rates contributing to a potential hospitality recruitment boom. The Tourism Alliance estimated that spending by Britons on UK holidays has been up by 17% on 2015 so far this year, with British Hospitality Association (BHA) chairman Nic Varney suggesting at this year’s British Hospitality and Tourism Summit that “tourism and leisure can continue to grow under Brexit.”

Things to be wary of… 

It’s worth remembering that while a potential boom in customers is an exciting prospect for businesses; with research indicating that more than 61,000 foodservice and accommodation employers in the UK will lack key skills by 2020, such a dramatic increase in new jobs is likely to expedite this problem and make filling these hard-to-fill roles even more difficult. Furthermore, according to The Migration Observatory’s ‘Migrants in the UK Labour Market’ report from 2014, foreign-born workers made up 43% of those in ‘Food preparation and hospitality’ and 25% of ‘Managers and proprietors in hospitality’. Fewer new European arrivals in the UK would therefore leave a shortfall in the industry that there simply aren’t enough Britons with the right skills to fill. In an article in the Economist in May 2015 it was suggested that, “Some industries, especially those that struggle to replace human labour with technology, would be left foundering without a ready supply of migrant labour.” 

In short, while Brexit may well bring about new opportunities in the hospitality industry, it’s likely to exaggerate an existing issue and make finding (and retaining) individuals with the right skills more important than ever. Our People Awards recognise employers that are tackling this skills shortage with innovation and initiative. Find out more about this year’s winners.