Forecasting the potential negative implications of Brexit has indulged many. As we move ever closer to the 29th March exit date, we are starting to see financial reporting from hospitality businesses that unfortunately fulfil those forecasts.
Millennium & Copthorne Hotels said last Friday when announcing their annual results that profits were down and that the UK’s impending exit from the EU is making it harder to hire EU nationals in London.
The luxury hotel chain operator owns seven four and five star hotels in London stated: “Concerns about Brexit have affected the Group’s UK hotels especially in London, where hotels have started to face difficulties in recruiting EU workers, which currently comprise more than half of the London workforce.”
We have given our opinion on how we see the government’s immigration white paper will impact negatively on the already acute people and skills shortages in hospitality.
For people across the EU looking at entering and developing a career in hospitality through working in the UK, the government’s immigration white paper message is all too clear, stay away.
Reducing the availability of workforce for the UK hospitality industry
The immigration white paper states that EU nationals will need to have a job offer before they can enter the UK and work post Brexit. It further details that EU nationals will need to have secured a position of employment where they will earn a minimum of £30,000.
EU nationals who want to work in the UK post Brexit that secure a job paying less than £30,000 will only be allowed in on a one year visa. They will then be required to go ‘back home’ after a year and can only return after a non-specified ‘cooling off period’ of time.
Reducing the availability of skills for the UK hospitality industry
Investing in people and developing their skills is essential for businesses to grow and thrive. Investing in people is also a long term strategy. Businesses employing EU nationals who earn less than £30,000 a year and therefore can only work in the UK for a maximum of twelve months are difficult to justify investing in.
Some basic training and development will be completed out of necessity. But the level of training required to inspire people to make their career in hospitality is hard to justify.
A large international group may take the view that employing EU nationals in the UK for year one and then giving them an opportunity in Europe or beyond to take their career to the next level would be justified. But clearly this would be of little benefit to the UK hospitality industry.
Medium and long term detriment
We suspect that the government thinks that post Brexit the people and skills shortages will somehow fix itself, that the UK national workforce will ride in and save the day. The fact is that the volumes of UK nationals required to enter working in hospitality, even if they were motivated to, simply aren’t there.
Employment is at a record high since 1971, unemployment at its lowest since 1975 and job vacancies in the UK at its highest since records began.
Whilst the focus of our Brexit commentary to date has been the immediate difficulties, it is hard to see how they will not compound over time, unless the government’s approach to EU nationals changes, dramatically.
This issue, people and skills shortages, is already acute and holding UK hospitality back significantly. Millennium & Copthorne’s profits and workforce announcement last Friday we fear, will be reported similarly all too frequently by businesses across our industry.