Investing in staff will pay off

“Despite being the UK’s fourth largest employer, with more than 3m workers, the hospitality sector has always faced major retention and recruitment problems and still has one of the highest staff turnover rates of any sector. It only has itself to blame.” Those were the harsh yet frankly largely truthful words of Unite regional officer Dave Turnbull at the end of last month, as he challenged the sector to make the changes necessary to tackle its major recruitment crisis.

High staff turnover costs the hospitality industry close to £300m a year and almost half of all chef vacancies are considered hard to fill.

With almost two thirds of chefs working more than 48 hours a week and a 2015 survey finding a quarter of people working in hospitality being paid below the minimum wage, it’s not hard to see why people aren’t banging on the door of every restaurant begging for work. There is much we need to do to change this image, to one of an attractive, opportunity-laden career choice and one that parents want their children to sign up to.

A recent survey by Best Western Great Britain, revealed that almost half of parents would discourage their children from a career in hospitality.

All this is in spite of what appears huge enthusiasm among young people. The recent Future Chef competition attracted 9,000 entries for 12 to 16-year-olds. Judge Chantelle Nicholson, chef-patron at Tredwell’s, said she was in equal measure inspired and perplexed. How do these young people get lost to the industry?

The most progressive businesses have understood the costs of not treating staff fairly and meeting customer demand. Treating staff fairly polled top of all sustainability issues in a survey of consumers by the Sustainable Restaurant Association in 2014.

Speaking to award-winning leaders in the industry, we believe there are a variety of approaches to pay, tips and service charges and wider working conditions that will help improve recruitment, retention and customer loyalty.

As Peter Borg-Neal, Business Leader of the Year at the recent Publican Awards says: “I knew I always worked harder for the good guys.”

Fair pay for motivated staff

Pay is not the be-all and end-all of fair employment, but it’s a good place to start. We believe all staff deserve to paid the national living wage, regardless of age. Is it really fair, or indeed good business sense to pay an inexperienced 25-year-old waiter more than a fantastic 24-year-old with far greater skills and experience?

A number go further. Harry Cragoe, owner of The Gallivant worked out that his employees would be better off being paid £9 per hour along with a new list of perks and incentives than they would be on the minimum wage and their share of the tronc.

Almost a year and a half since the introduction of the new pay regime at The Gallivant, repeat business is up, 30-day forward-looking occupancy is north of 90% and, on TripAdvisor, people talk almost exclusively about how good the staff are. Cragoe is clear that happy staff must be having an effect.

At Oakman Inns, the national living wage is used as a base level. New members of staff who complete the required training within their first three months will automatically see their pay rise to a rate above that prescribed by the Living Wage Foundation. Borg-Neil is adamant that you have to pay people a wage they can live on, but equally firm in his belief that they must be motivated to earn it.

Think beyond the wages

Investing in training, encouraging volunteering, flexible working hours and innovative bonus schemes are all part of the mix that will help encourage staff loyalty and commitment – over and above pay.

As Borg-Neal says: “You need to inspire people, explain what you’re doing and why. Then you need to educate them, measure them and, crucially, reward and recognise them.” He introduced a scheme that sees employees nominate colleagues for going above and beyond – that’s as well as the annual OakFest – a celebration day for all staff.

And for those who don’t know, Borg-Neal is someone worth listening to, he oversees the top-ranked hospitality business in the Best Companies to Work For list and, in the past year, Oakman Inns has increased the number of employees staying with them for more than 12 months by 26%.

Most chefs working for Nicholson, at Tredwell’s, are expected to work around 56 hours over seven shifts, down from 18 hours a day when she started. Recently, she agreed to take on an inexperienced 40-year-old mother, on a fixed 40 hours per week deal to fit in with her childcare needs and has been rewarded with a super-efficient, highly motivated member of the kitchen team. Nicholson is adamant that the secret of a happy team and good staff retention is finding out what people are capable of and then giving them the chance to shine and climb the ladder. Nicholson is another industry figure whose view in this sphere has genuine credence.

Tips and services charges

Transparency costs nothing. In fact, an opaque, murky approach to tips and service charges can come with a big price tag. Just look at the Twitter storm that greeted reports that many in the sector weren’t doing right by their employees, failing to distribute tips and service charges fairly and creaming off a chunk. That was genuinely bad for business.

Service charges are discretionary and diners will vote with their wallets. It is straightforward to include a message either on the menu, bill or website about what the charge is and how it is shared. No ifs nor buts. Transparency should be there for staff too in the form of a clearly communicated arms-length tronc system with no management interference.

In terms of clear communication with customers, few spell it out more simply than The Gallivant, which opted to ditch service charges at the end of 2015.

Visitors to The Gallivant are greeted with a clear message about higher pay and cost regime. It closes, saying: “We think this approach is far more equitable and completely transparent for everyone. We are passionate about putting smiles on our customers’ faces and believe this will only make us more able to do this. We hope you will continue to support us as we take this bold approach.”

We’re not expecting all restaurants to follow The Gallivant’s lead, although we will continue to watch with interest their progress. But we don’t think it’s too bold an ask for every hospitality business to review its whole employment package.

We know it’s tough out there, and there are serious challenges, but these businesses mentioned here aren’t freaks or outliers and they have proved that it is

not just possible to provide a fair deal for staff, but profitable. By dishing up that

fair deal, employers are laying the foun-dations of a sustainable business – in every sense of the word. As Will Beckett of Hawksmoor, another exemplar, puts it – it’s about turning your biggest headache into your biggest asset.

If you’re paying the national living wage to all, are transparent on service charges and investing in staff beyond wages, share your experience at www.foodmadegood.org/fairdeal where, in April, we are hosting a conversation about treating people fairly. Use the hashtag #dishupfairpay.

■ Andrew Stephen is chief executive of the Sustainable Restaurant Association