A ‘disorderly Brexit’ could see the UK’s hospitality industry suffer a £1.8 billion reduction in economic output, compared to an ‘orderly Brexit’, it was claimed this morning.
Some 60% of UK hospitality businesses also think that leaving the EU will negatively impact their ability to hire kitchen and restaurant workers, cleaning and housekeeping staff as well as maintenance workers, according to a report by workforce management specialist Quinyx in collaboration with Development Economics and Censuswide.
As part of the research, Quinyx compared the predicted growth and economic output of the UK’s manual and elementary service workers in the hospitality sector under both a disorderly and an orderly Brexit scenario.
The comparison found that the overall increase in economic output generated by the these hospitality workers would be over £3.4 billion per year by 2024 under an orderly Brexit, compared to over £1.6 billion per year under a disorderly Brexit – this equates to a 52% reduction or £1.8 billion loss each year.
The decrease in economic output would come from a lack of access to hospitality sector workers in manual or elementary service roles – for example kitchen and restaurant workers, cleaning and housekeeping staff or maintenance workers. This could come primarily as a result of uncertainty around, or lack of, immigration policies.
The impact on businesses will vary across the UK. The research found that in the event of a disorderly Brexit, London, the East of England and the South East will see the greatest reductions in available workers and economic output.
The research found that under any Brexit scenario employers in the UK’s hospitality sector expect to lose – on average – 23% of their blue-collar workforce as a result of the UK’s departure from the EU, with 11% saying they expect to lose 31% or more.
Despite this, 25% of hospitality businesses have no plan for managing their future pipeline of these workers post-Brexit.
Mansoor Malik, managing director UK and international at Quinyx, comments: “The impact that a disorderly Brexit will have on the UK’s kitchen staff, restaurant workers, and cleaners as well as the hospitality businesses that employ them is concerning. Access to manual workers or those in elementary service roles is crucial for ensuring the UK’s economic wellbeing – and employers need to make plans to avoid staff shortages in the future.
“A first step for employers facing staff shortages is looking at ways that they can bridge the gap between supply and demand. Given the degree of uncertainty on the horizon, seeking out new ways to attract and retain domestic workers should be a primary focus.”
The findings of the report are based on economic analysis of ONS data and the results of an employer sentiment survey of 1,008 senior decision-makers in UK firms that hire blue-collar workers.
The research also found that difficulties accessing these workers as a result of Brexit are likely to be further exacerbated, as hospitality employers already face challenges in recruiting and retaining them.
Over half (51%) of UK employers in the hospitality industry with a manual and elementary service workforce currently struggle to recruit these workers, with an even greater percentage (56%) reporting that they struggle to retain them.
Some of the main barriers to the recruitment and retention of these workers in the UK are low pay, unsociable hours and lack of career progression. Lack of flexibility was also cited by one-fifth (20%) of hospitality employers as a significant grievance among their workforce.
Mr Malik added: “Our research found that skills shortages, as a by-product of poor retention and the inability to recruit blue-collar workers, result in a 10% reduction of growth and an 11% drop in productivity in hospitality businesses, on average.”