The border issue for hospitality

12 November, 2020 by The Shout Team

By Luke Butler, managing director of Hastings People

As hospitality begins its peak trading season, venues are confronted with a new staffing challenge.

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Consumers across every state in Australia have returned to hospitality venues with enthusiasm. They are buoyed by the remarkable successes that we have achieved in controlling and supressing the spread of COVID-19.

Mid-COVID concerns around long-term changes to the way consumers enjoy hospitality have been allayed, and it is now clear that the biggest impact to ongoing trade is venue location.

CBD precincts continue to do it tougher than suburban venues which are enjoying stronger patronage. Despite various lingering restrictions in all states, many operators are now reporting surprisingly positive profit results across food, beverage and gaming. This is a very welcome outcome for management and a strong sign of confidence returning to the market.

But this healthy trade is placing incredible pressures on the labour market within the Australian hospitality sector and it is difficult to predict when we will see any positive changes taking place.

Many operators expected to see a very high volume of staff ‘open to work’ but this has certainly not been the case. We are now facing an extraordinary challenge in staffing venues for summer.

Lack of skilled workers

While the availability of unskilled workers is high as displaced professionals seek jobs in alternate sectors, this doesn’t solve the problem for hospitality venues. They are ideally seeking leaders or a ‘finished product’ who can hit the ground running at this high-need time of year.

The absence of international workers – both backpackers and students – exacerbates this and makes it extremely difficult for operators to achieve their required staffing levels. This is the time of year when Australian cities and holiday destinations are usually flooded with international visitors, many of whom are ready to work casual jobs to support their holidays. Border closures now make this impossible.

The hospitality sector has relied on foreign labour for decades, employing many seasonal workers across the busy months. This reliance on short-term visa holders to fill culinary or management positions across a broad range of roles has now been exposed by the absence of foreign nationals.

The local workforce

It has been widely reported that the JobSeeker subsidy is also compelling some individuals to refuse work, but as anecdotal as this may be, the trend is not having a major impact – particularly in major cities.

With limited access to workers and trade exceeding levels that venues can comfortably handle, some operators have been forced to close down purely because they don’t have the staff to operate. Scarily, many venues have yet to re-open. We are still trading in a restricted manner. The full extent of this talent shortage is yet to be felt.

There is clearly a real issue right now, yet the long-term, systemic issue that underpins it must be solved. Why is it that ‘locals’ aren’t flocking to work in hospitality venues as they once did? Why are we so reliant on international workers to support one of our country’s largest employment sectors?

Perhaps scale is a major reason. Does the sheer volume of work available mean that we simply do not have the requisite number of local employees to fill the available jobs?

I don’t think so.

The image problem that the industry faces as an employer of choice is well known. This could be a great opportunity for businesses to reassess their approach to local talent and sharpen their employment brand and improve the reputation of the sector as a whole.

All we have available to us now and for the immediate future is domestic talent. Refocusing on improved workplace conditions, better morale, team culture and staff engagement could be a very worthwhile strategy for operators looking to attract and retain talent in the most competitive employment market we may ever see.