Spotlight on: The Hospitality Sector and Skills Shortages

The effects of the COVID-19 pandemic have caused a series of challenges that many corners of the economy are still tackling. One of the most impacted sectors continues to be hospitality and tourism, where the workforce has been affected by both the end of free movement after Brexit and those returning overseas during the pandemic. A recent study by The Migration Observatory reports that EU employment in London saw just under a 30% decline in the hospitality sector from June 2019 to June 2021.

Skills shortages in the UK

Ongoing labour shortages have significant consequences for hospitality businesses across the UK, where EU employees now account for 28% of the hospitality workforce, down from 42% before the pandemic. Many hotels are instituting occupancy caps as staff shortages outstrip demand, restaurants reduce covers due to a lack of chefs and wait staff, and other hospitality businesses are limiting opening hours despite a return to pre-pandemic customer demand.

The UK’s current immigration system, introduced in 2021, made sponsored visas more flexible than they were in the previous system. However, the system does not allow for individuals to be sponsored in certain roles, deemed ‘lower skilled’ or ‘lower paid,’ despite many of these roles being in high demand across the hospitality sector.

Shortage Occupation List

The UK’s upcoming review of the Shortage Occupation List (SOL), expected during the third quarter of 2022, is awaited by the sector. It provides an opportunity for those in the hospitality industry to demonstrate which roles they are struggling to recruit and the subsequent impact on their businesses. This will be the first time a SOL review has taken place since Brexit and the pandemic.

To be considered for the SOL, a role must be deemed to be in high demand, difficult to fill with the resident labour force and therefore suitable for overseas workers. Roles appearing on the SOL benefit from both lower salary thresholds for sponsorship and reduced visa application fees. If the hospitality sector provides strong data evidencing the difficulties in recruiting these roles from the resident labour market, this could support easing the immigration rules for specific roles within the sector, allowing for visa sponsorship and paving the way for further overseas recruitment.

The global hospitality sector

In response to the challenges facing the hospitality sector, many European countries are attempting to address labour shortages through proposed policy reform. For example, Germany is currently discussing a reform of the immigration law to simplify the application requirements to fill vacancies in the hospitality industry with foreign workers. The present labour shortages are exacerbated by long processing times and appointment availability for work visas, with applicants reportedly being advised to apply at least three months in advance.

Further afield in Australia, demand for staff in the hospitality sector has hit record highs. Staff shortages have forced businesses to embark on overseas hiring campaigns to find chefs, sommeliers and front-of-house managers. Despite Australia’s international borders now being open post-pandemic, the backpackers, international students and visa holders that played a vital role in Australia’s hospitality industry have not returned at pre-pandemic levels.

Australia has recently had a change in government, and a Jobs and Skills Summit is being held on 1-2 September 2022 to bring together employers, state governments, unions and other peak industry bodies to address the country’s skills shortages. Improving the migration settings to support higher productivity and wages is on the agenda, and the government has announced it will prioritise the skilled worker visas.

As an interim measure, the government has extended the hours cap international students are eligible to fulfil, allowing them to work full-time hours. In the hospitality sector, the Priority Migration Skilled Occupation List includes the occupation of ‘Chef,’ which means visa applications for chefs are processed with priority status.

In the UK, at least in the short term, employers must rely on niche routes to make full use of existing immigration programmes. The Youth Mobility scheme allows two years’ work permission in any role without sponsorship but is limited to certain nationalities and has an age requirement for the applicant. International students are also allowed to work part-time in limited circumstances, depending on their course of study. The sector is also well placed to support Ukrainian nationals fleeing the political crisis in Europe, who may look to resettle in the UK under the various visa schemes in place. The High Potential Individual route, introduced in May 2022, may also provide a route for some individuals.

Looking ahead, the sector will look to the opportunities of the Shortage Occupation List review once announced and will be ready to contribute with supporting evidence of staff shortages faced, along with explanations regarding the true impact on their businesses.

Need to know more?

For further information on the UK, please contact Charlotte Wills at [email protected] and Harry Goldstraw at [email protected]. For further information on Germany and Australia, please contact Nima Sarvari at [email protected] and Chris Spentzaris at [email protected], respectively.

This blog was published on Wednesday, 17 August 2022, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please visit our dedicated COVID-19 site, subscribe to our alerts and follow us on LinkedIn, twitter, Facebook and Instagram.