According to figures from the Office of National Statistics, the hospitality industry, in its many guises, generates an annual turnover of around £100bn, making it one of the most important sectors in the British economy.

But it is also an industry that has become increasingly reliant on recruiting staff from the EU.

Indeed, it is estimated that around 40 percent of people currently employed in catering, hotels, and pubs or as waitstaff in London, are EU nationals.

Once Britain leaves the EU it is widely assumed that this will impact negatively on the industry as an end to free movement will mean the plentiful supply of workers who have come to the UK from Europe will dry up.

So, as we prepare to potentially leave the EU on October 31st, we’ve outlined a few things that businesses operating in events and hospitality need to know...

Settled Status

The possibility of the UK leaving without a deal on October 31 prompted a deluge of applications by EU citizens and their families looking to acquire settled status in the UK. According to the Home Office, out of 2 million applications received to date, over half a million were made in September.

The deadline for applications is December 31, 2020, which is also the date when EU citizens can continue to live and work in the UK without any issues.

Know Your (Workers) Rights

Failure to apply for settled status by the deadline will mean the automatic loss of the right to live and work in the UK. As an employer, if you fail to ensure that any of your EU national employees has settled or pre-settled status, you will be deemed to have employed workers illegally, which could ultimately result in a fine of up to £20,000 per worker.

The Shortfall in Staff

It is difficult to put any real figures on the potential long-term shortfall of staff in events and hospitality when Britain leaves the EU. 

But a recent survey of hospitality business owners and managers revealed that the roles most likely to be at risk are:

1. Waiter / Waitress (80%)

2. Bartender / Barista (64%)

3. Host (48%)

4. Hotel Concierge (34%)

5. Chef (26%)

6. Restaurant Manager (17%)

7. Hotel Manager (10%)

Since the Brexit vote the number of EU nationals coming to the UK looking for work has dropped sharply. This has had a knock-on effect as the supply of workers is struggling to meet the demand. As a consequence, this is pushing up wages as employers battle to attract and retain the best staff from recruiters. 

The rising cost of food

The drop in the value of sterling has made the UK an attractive retail and tourist destination. But it has also increased the cost of importing goods such as food and drink. In the event of No Deal that cost is only going to increase.

Currently the UK imports about 30% of its food from the EU. No Deal means having to operate on WTO rules for importing and exporting, which will result in tariffs on food coming in from Europe which, on average, is expected to add an extra 22% to the cost. 

How to retain your best workers

Peter Ducker is the chief executive at the Institute of Hospitality, which regularly holds events at 116 Pall Mall. He says, “Businesses need to start with the staff they have today and make them feel welcome and valued. One of the key elements of that is giving them more control over when they work and when they don’t work. The other part of it is to have an open channel of engagement and talk to them about Brexit, and understand how they feel about it. Workers are reticent to let managers know how concerned they are.

“Employers need to look at every aspect of their business, they need to look at processes and procurement. They also need to look at retention and how they can better keep the people they’ve got. They can do this by offering better training, flexible working hours.

"But the industry also needs to look to government, to say they want clarity and support in developing skills and improving productivity.”

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Navigating Brexit: Migration after Brexit – The Future of Labour Mobility

Is your business Brexit ready? Don’t miss the final instalment of the London leg of the Navigating Brexit event series: Migration after Brexit – The Future of Labour Mobility. Join the IoD’s Head of EU & Trade Policy Allie Renison and a panel of Brexit experts at this essential workshop for business leaders seeking practical guidance and tips on how they can best prepare their firms for a no-deal exit.