Labour – The Impact of Brexit and Technology
Britain voted to “Brexit” on 23 June 2016, but the latest employment figures released by the Office for National Statics appear to indicate that Britain is still very much “open for business.”
With 4.5 million workers, the sector is the fourth largest sector for employment in Britain. Between 2011 and 2015, employment within the sector has risen at a rate of 22%. The demand for workers was significantly met by European nationals, who equate to some 700,000.
The plans for what will happen to EU nationals living and working in the Britain during the process of Brexit are yet to be confirmed, but the British Hospitality Association (“BHA”) has speculated that if EU nationals are required to leave Britain, that the sector and the domestic labour market cannot replace the working EU nationals. The BHA also commented that any further growth in such a labour intensive industry cannot be met. These concerns are also shared by the Government, with the Skills and Funding Agency commenting that the sector needs a further 855,000 new staff by 2017 to replace those currently leaving.
In response to these concerns, both the BHA and the Government have implemented initiatives to ensure labour within the sector continues to grow. For example, the Government is making a concerted effort to encourage young persons to apply to the National Apprenticeship Service (which will be backed by the Apprenticeship Levy) and the BHA hosts what they refer to as “The Big Hospitality Conversation” alongside an annual month long initiative “Hospitality Works.” This was created alongside the Department for Work and Pensions. The above initiatives have created 67,000 career starts within the sector.
But businesses must take responsibility for the continued growth of labour within the sector labour growth and continue investing in staff. Traditionally, the sector does not pay well, so business should consider reviewing their pay in order to retain staff and minimise turnover. Likewise, staff retention can be increased by businesses investment in training. Business can achieve this by enrolling current and prospective staff onto apprenticeship schemes and taking advantage of the Apprenticeship Levy (the “Levy”) which will be effective from 6 April 2017.
Yet, changes to the labour market cannot solely be attributed to the impact that Brexit has had or will have. Digital trends and technology within the sector is developing rapidly. One example of this is the introduction of mobile phone apps which allow consumers to order food beyond the conventional takeaway. Consumers can now order the types and standard of food they could expect to receive during a restaurant sit down service, all from the comfort of their own home. Takeaway sales have increased a staggering 54% and this may well contribute to a reduction in the need for front of house staff.
The increase in the ability for businesses to provide such services to consumers is largely supported by the ability for businesses to engage individuals under the employment model known as the “gig economy”. That is, an economy in which people work small jobs instead of, or as well as one full-time job. Individuals are paid for the amount of work they complete and therefore can chose to work as little or as often as they please. The gig economy has risen in the wake of the digital revolution which has created a supply chain whereby the time from input to output is achieved in negligible time; an on demand service. Deliveroo and Uber Eats are examples of businesses that operate under the model.