EU work­ers drift from Bri­tain just as restau­ra­teurs need them most

Brexit boosts Bri­tish tourism in­dus­try • Hos­pi­tal­ity sec­tor grows but strug­gles to re­cruit • Stream of Euro­pean work­ers starts to dry up

Jerusalem Post - - BUSINESS & FINANCE - • By EMMA RUMNEY

LON­DON (Reuters) – Busi­ness is boom­ing for Paul Mur­phy’s re­cruit­ment agency in north­west Eng­land. Clients are rolling in with more jobs in restau­rants, bars and ho­tels than ever be­fore, but find­ing work­ers to fill them has be­come tricky.

Bri­tain’s vote to leave the EU has com­pli­cated life for Mur­phy. A steady stream of con­ti­nen­tal Euro­peans who for years have taken up hun­dreds of thou­sands of po­si­tions in the hos­pi­tal­ity busi­ness and other in­dus­tries has started to dry up.

“It’s def­i­nitely get­ting worse,” said Mur­phy, whose Knight Ben­ton Re­cruit­ment agency is based in the small town of Cleator Moor. “The lead time to fill a chef va­cancy at the mo­ment... could be any­thing be­tween two and six months.”

By con­trast, find­ing a chef last year would take two months at most, he told Reuters.

Cit­i­zens of the re­main­ing Euro­pean Union states – from Ital­ians and Span­ish to Poles and Ro­ma­ni­ans – face los­ing their au­to­matic right to live in Bri­tain when it leaves the bloc in March 2019. Mur­phy be­lieves the govern­ment must pro­duce an al­ter­na­tive im­mi­gra­tion regime that en­sures em­ploy­ers get the work­ers they need.

“With­out a proper plan in place, they could crash the econ­omy,” Mur­phy said.

The hos­pi­tal­ity sec­tor, like farm­ing and con­struc­tion, has re­lied heav­ily on Euro­peans, par­tic­u­larly on peo­ple from the poorer ex-com­mu­nist states that be­gan join­ing the EU in 2003.

Cit­i­zens of other EU coun­tries could make up as much as a quar­ter of the three mil­lion work­ers in hos­pi­tal­ity, ac­cord­ing to a KPMG re­port based on a sur­vey of Bri­tish Hos­pi­tal­ity As­so­ci­a­tion (BHA) mem­bers. That in­cludes 75% of wait­ing staff, 37% of house­keep­ers and 25% of chefs.

Last June’s ref­er­en­dum has af­fected both the sup­ply of la­bor and de­mand for it.

Euro­pean work­ers are start­ing to leave Bri­tain or hav­ing sec­ond thoughts about com­ing in the first place, wor­ried about their un­cer­tain sta­tus af­ter Brexit.

On top of this, the pound has fallen more than 15% against the euro and about 21% against the Pol­ish zloty since the ref­er­en­dum. That means Euro­peans’ ster­ling pay does not stretch nearly so far when they send money home, en­cour­ag­ing them to seek work else­where.

But Mur­phy’s clients need more staff. Cleator Moor lies on the edge of the Lake Dis­trict na­tional park, a top tourist draw. The weak pound has en­cour­aged many Bri­tons to take va­ca­tions at home and has at­tracted grow­ing num­bers of for­eign visi­tors to places such as the Lake Dis­trict. They need feed­ing and ac­com­mo­dat­ing.

BAL­ANC­ING CON­CERNS

Smaller firms are par­tic­u­larly af­fected. Some are pay­ing agen­cies to re­cruit for roles they used to fill eas­ily them­selves, rais­ing salar­ies and of­fer­ing more part-time hours.

At a na­tional level, big brands such as the Pret a Manger sand­wich chain and the pizza restau­rant group Franco Manca have warned about the im­pact on their busi­nesses.

Hos­pi­tal­ity alone ac­counts for around 4.3% of the Bri­tish econ­omy, the BHA es­ti­mates, but the prob­lem is wider. Nu­mer­ous re­cruit­ment and sen­ti­ment sur­veys have sug­gested that firms across the econ­omy are strug­gling to fill va­can­cies.

Prime Min­is­ter Theresa May’s govern­ment has to bal­ance these con­cerns with those of the many Bri­tons who say they voted for Brexit pri­mar­ily to clamp down on mi­gra­tion from the EU.

The govern­ment wants to keep the right of Ir­ish cit­i­zens to work in Bri­tain, an ar­range­ment that long pre­dates the EU. But a re­cently leaked doc­u­ment showed it is con­sid­er­ing re­strict­ing mi­gra­tion from other EU states to all but the high­est skilled work­ers. The govern­ment has said only that it would set out its pro­pos­als later this year.

Em­ploy­ers fear too hard a line will make mat­ters worse. Al­ready they raised salar­ies at the fastest pace in two years in Au­gust as the fall in EU mi­gra­tion ag­gra­vates the la­bor short­age, ac­cord­ing to a sur­vey by the Re­cruit­ment and Em­ploy­ment Con­fed­er­a­tion.

Hos­pi­tal­ity needs to re­cruit 200,000 peo­ple ev­ery year to make up for nat­u­ral staff turnover and power its growth, ac­cord­ing to the BHA. With­out any new EU mi­gra­tion or an in­crease in ap­pli­ca­tions from Bri­tons, it es­ti­mates the in­dus­try could face a short­fall of more than 60,000 jobs ev­ery year.

SIG­NIF­I­CANT DROP

Since 2003 the num­ber of peo­ple born in other EU states liv­ing in Bri­tain has jumped from 1.26 mil­lion to 3.68 mil­lion in 2017, ac­cord­ing to Ox­ford Univer­sity’s Mi­gra­tion Ob­ser­va­tory. East­ern Euro­peans ac­counted for al­most all the in­crease.

But that trend has slowed sharply. In the 12 months to March, net mi­gra­tion from all coun­tries was 246,000, down 81,000 from the pre­vi­ous year, of­fi­cial data show.

More than half that drop was due to EU cit­i­zens leav­ing and fewer ar­riv­ing since the Brexit vote. The big­gest fall was among cit­i­zens of eight East­ern Euro­pean coun­tries.

Up-mar­ket fast-food chain Leon, which runs 52 restau­rants mostly in Lon­don and south­east Eng­land, is feel­ing the con­se­quences. “What we’ve seen this year, par­tic­u­larly in the last quar­ter, is a sig­nif­i­cant drop in ap­pli­ca­tions from EU na­tion­als,” said Marco Re­ick, the firm’s per­son­nel di­rec­tor.

With staff from other EU states mak­ing up around 60% of Leon’s 1,000-strong work­force, the firm has re­sponded by split­ting full-time roles into part-time po­si­tions. While more ex­pen­sive ini­tially, this makes them more at­trac­tive to Bri­tish can­di­dates who tend to want more ca­sual work.

In­dian fine-din­ing restau­rant group MW Eat says job ap­pli­ca­tions from EU na­tion­als are down around 80% since the ref­er­en­dum. “We’ve had to in­crease wages by in ex­cess of 10%,” chair­man Ran­jit Mathrani said. Even then, the group is tak­ing on less qual­i­fied can­di­dates, rais­ing train­ing costs. As a re­sult, it is hav­ing to in­crease menu prices.

NOT ENOUGH

‘It’s def­i­nitely get­ting worse. The lead time to fill a chef va­cancy at the mo­ment... could be any­thing be­tween two and six months’

Find­ing Bri­tish re­place­ments isn’t easy. Mathrani said MW Eat would pre­fer to hire more lo­cally born work­ers, but many see hos­pi­tal­ity as an unattrac­tive ca­reer choice.

In ad­di­tion, un­em­ploy­ment is its low­est in decades, at 1.46 mil­lion peo­ple, or 4.3% of the work­force, in the three months to July.

Peter Gow­ers, chief ex­ec­u­tive of the Trav­elodge bud­get ho­tel group, says there sim­ply aren’t enough avail­able Bri­tons. “Even if the ho­tel in­dus­try re­cruited vir­tu­ally ev­ery per­son on the un­em­ploy­ment regis­ter, there wouldn’t be enough peo­ple to fill all the roles needed in the 10 years fol­low­ing Brexit,” he told the Mail on Sun­day news­pa­per.

Gow­ers called on the govern­ment to con­sider a guest-worker pro­gram to avoid price rises and in­vest­ment cuts.

Other large firms say they have avoided the im­pact so far. One of them is the Gor­don Ram­say Group, which op­er­ates restau­rants un­der the name of one of Bri­tain’s most out­spo­ken celebrity chefs. With twothirds of its work­force from other EU states, the firm has brought for­ward steps to re­tain staff, in­clud­ing of­fer­ing more flex­i­ble shifts, CEO Stuart Gillies said.

The govern­ment’s am­bi­tion is to cut an­nual net mi­gra­tion to “the tens of thou­sands.” For some em­ploy­ers, the prospect of fur­ther falls in mi­gra­tion is un­set­tling.

“That re­ally makes me very un­com­fort­able, be­cause we’re strug­gling as it is,” Re­ick said.

(Peter Ni­cholls/Reuters)

AN EU CIT­I­ZEN poses for a pho­to­graph in the cafe where he works in Lon­don ear­lier this month. A steady stream of con­ti­nen­tal Euro­peans who for years have taken up hun­dreds of thou­sands of po­si­tions in the hos­pi­tal­ity busi­ness and other in­dus­tries has started to dry up.

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