New Zealand’s hospitality skills shortage, and how to keep good staff.
There is a major threat to the New Zealand hospitality industry at the moment, and it’s a problem from within: skills shortages.
From young apprentices to experienced senior talent, the food and beverage industry is seeing its lowest numbers in years. Compare this with our skyrocketing population numbers, and higher dining numbers than ever before, and it’s been predicted that the hospitality industry will need an extra 123,000 workers by the year 2020 just to survive.
It has, therefore, never been more important to source and hang onto great hospitality staff.
But how did we get to this place? And how can we stop it happening again? We sat down and spoke with two industry experts to get their opinion on the skills shortage, and their tips on retaining your prized staff members.
Geremy Glew is the director of Placed Hospitality Recruitment in Sydney, Australia. He has seen, firsthand, the troubles the industry is facing. He believes that the ‘hard work’ image of the industry is to blame for dwindling numbers.
“Quite simply, it’s hard work and not enough people think that the physical effort and dedication required is worth the pay they get at the end of the week,” he says.
“... inevitably it means that the reality of 50 to 55 hour week (including weekends and night work) is just not attracting the same percentage of a demographic that perhaps it once did.”
With the younger generations better versed on working conditions than ever before, even the ‘high end’ hospitality sectors like hotels and restaurants are failing to attract staff. Geremy notes that even in the last five years they have seen a dramatic drop in numbers, with hoteliers using his recruitment services for the first time in his career.
Geremy also looks to the recent TAFE cuts in the skills shortage. With the deregulation of the industry, he explains, there will be a boom in private hospitality colleges, with no regulation of quality or skills.
“I think that when you deregulate any sector you see usually see a change in focus,” he says. “From focus on output and commercial viability, to a stronger focus on maximum commercial viability - this often correlates with reduced quality output.”
Whilst it’s not an entirely comfortable topic, it is worth noting the sheer numbers of businesses who just want to take the cheap option and employ immigrants under a 457 visa. The standard line it that they “have a strong work ethic, and do the jobs that local staff don’t want to do”. However, these same businesses then turn around and complain about them not being skilled enough. It’s a catch 22.
Thankfully, Geremy believes this practice is becoming less and less frequent, given that staff can now transfer their 457 visa to a new employer if they are ‘getting ripped off’.
“In such a candidate dry market the onus is very much on the employer to provide good working conditions if they want hang onto their staff more than ever,” says Geremy.
“I don’t see taking 457 visas as the cheap option. Of course it depends on the level, however there are strict guidelines for salary amounts and if you’re taking a mid-level person on a 457 you are absolutely paying them market rate, like it or not.”
Another unfortunate image problem the hospitality industry faces is that of equipping staff with poor knowledge of financial responsibilities such as tax and superannuation. The fact that payment has traditionally been with cash, this is a turn-off for new starters who require ‘on the books’ payments for everything from rental applications to direct debits.
Geremy believes that most businesses are starting to cotton on, and change their payment systems.
“More and more electronic payments are being used,” he says. “There’s been an exposé of restaurants getting busted, getting publicly named and shamed, and having to pay very large backpay amounts.”
“Again, I think of course there are some that exploit, but the cash economy has been a part of the restaurant industry since the beginning. I’m sure a lot of the old guard just see this as being how you run a restaurant and think that without it they would no doubt go bust.”
I asked Geremy how he sees the hospitality industry changing in coming years, as a result of the skills shortage.
“We are already seeing many groups tailoring their operations to fit into the needs and wants of the labour market,” he says. “This in my experience is unheard of.”
He points to the following:
- High profile businesses closing certain days and capping hours so that their employees will work - because they know that if they don’t they will just leave and go somewhere else.
- Increased global marketplace - overseas staff.
- Increased reliance on a casual market in a more permanent capacity, and in areas of the industry that hadn’t previously.
- Increase in hospitality groups offering perhaps slightly simpler offerings with centralised production.
- More menu items bought and less made in-house due to less staff.
For the past 20 years, Ken Burgin has been in the trade of helping hospitality businesses hold onto their staff. Through his company, Profitable Hospitality, Ken has helped thousands of restaurants, cafes, and bars crack the code of what it takes to be both profitable, and popular.
Ken notes that he has been aware of the shortage in good hospitality staff for years now, looking to the drop in apprentices, and poor working conditions as reasons for the dwindling numbers of incoming staff. Gen Y expect more, he says, and fair enough -” People just won’t tolerate the tough conditions they would have in the past.”
Whilst this is a problem that is starting to attract more and more attention as New Zealand’s dining scene begins to shift and change, finding great staff has always been a tough game, says Ken. “In my 20 odd years in hospitality, it has always been a challenge to find great staff,” he says. “People will work and stay for a good, fair employer, and avoid a poor workplace. The actual numbers are tighter now, but the attractors and detractors are much the same.”
Everyone is on their best behaviour in a job interview, and for young apprentices without references, it can be difficult to know what to look for in an ideal candidate. Seasoned campaigner Ken says it’s easy. ‘Wide eyes, energy and curiosity’ are the place to start, he says, then making them feel comfortable in the interview environment so the important questions can be asked.
- Have they done some research about your company online?
- What do they want to do for the next 6-12 months, and how we can fit into their plan?
- What do they like about the industry and this particular business?
Ken also recommends you ask for them to showcase some skills. For example, ask them to make four coffees in a row (for speed and consistency testing), or a simple omelette, or slice some onions. “You want to see what their physical skills are like, if you are recruiting for a skilled position,” says Ken.
Find great staff is one thing, but keeping them is another. So, in a climate where a great staff member is like solid gold, what can businesses do to hang onto their staff?
There are three main tips, says Ken, with most of them revolving around good communication.
- Add regular short training activities to the weekly routine, led by one of the staff – these could be just 10 minutes eg skill practicing, watching a relevant YouTube video, or product knowledge quizzes.
- Hold a daily short huddle to check in with everyone on what’s happening and action needed. If not daily, a minimum of weekly.
- Hold regular quarterly reviews for each staff member based on a few standard questions, and as much to find out about ‘how things are going’. You will quickly pick up problems and be able to harness energy and suggestions.
One of the other primary issues small businesses are facing is actually finding staff in the first place. Gone are the days of simply advertising in your restaurant window, or word of mouth: the youth target audience, millennials, are more likely to be searching online for job opportunities and your advertising needs to stand out.
Creating ‘shareable’ advertisements, that can easily be passed on from person to person, is key, particularly in the hospitality trade. Mobilise your social media accounts with job advertisements, create a job listing on Seek, and search for local, online job boards specific to your industry.
But the horse must come before the cart, as Ken points out, and that means creating a genuinely attractive work environment for prospective job hunters.
“Check that your business is a great place to work, so you stop losing good people and become a magnet for quality candidates,” points out Ken. “Then when you go to ‘sell’ the job in an ad, word of mouth, social media or wherever, you can talk about all the genuinely great benefits you offer beyond just good pay.”
So, in modern-day hospitality, what makes a great work environment? According to Ken, it’s all in the small things. Consider incorporating some of the following ‘extras’ as part of the job description. After all, with less staff on the market, you will need to be competitive.
- Parking and location
- Close to transport
- Day work, Mon-Fri
- Good pay, or award wages
- Modern kitchen, bar, equipment
- Uniform and training provided
- Flexible hours
- Plenty of work, immediate start
- Staff meals + discounts
- Weekly pay by EFT - not cash
- Annual leave/ holiday leave
- Happy team
And above all, the key to retaining your great staff, says Ken, is getting rid of the bad ones. Concentrating on problem staff and the dramas they create, will mean your attention is taken away from the good staff who need nurturing.
“Don’t be afraid to ‘move on’ from under-performing or negative staff,” says Ken. “If the boss is afraid to move on the slow and the shifty, they can expect to lose many of their good people.”
Be the boss you would expect if you were a staff member; keep your promise on wage rises, hour changes, or training opportunities. Although, as the boss, it’s easy to overlook or forget these discussions, they are often milestones that keep your staff engaged and satisfied.