Wagamama latest to report staff shortage, Brexit curbs blamed for crisis

Highlights 

  • Wagamama reported struggle in hiring chefs across a fifth of its restaurants as the businesses across the country warn of recruitment difficulties due to immigration curbs.
  • Thomas Heier, CEO of Wagamama, blamed high demand in the UK post Brexit after EU workers were forced to leave.
  • The CBI has warned the government that labour supply problems could last for two years.

British Restaurant chain Wagamama has reported struggle in hiring chefs across a fifth of its restaurants as the businesses in the country warn of recruitment difficulties because of supply chain woes and staff shortages.

After the relaxation of Covid-19 pandemic restrictions in the UK, though the hardest-hit hospitality industry is limping back to normalcy, many bars, restaurants, and hotels are facing difficulties to fill the vacant positions.

Group CEO Thomas Heier said Brexit immigration restrictions was affecting the number of European workers looking for jobs in the country, but also blamed the increasing competition to recruit, as many logistic businesses are offering high wages and steep cash bonuses to help plug delivery and lorry drivers shortages. He added that the group is struggling to fill chef positions in around 30 sites of its 147 sites. 

Heier warned that shortages of chefs and supply chain challenges in UK could lead to increase in food prices. 

Industry lobby group UKHospitality described the shortage of staff as “critical”. According to Office for National Statistics, there was a 10% vacancy rate in the hospitality sector, equivalent to 210,000 roles.

Rating agency Fitch said that the movement of workers to Europe has been escalated by Brexit.  The businesses in Europe are facing similar challenges, although freedom of movement between the EU countries and higher unemployment meant that challenges were less acute, the agency highlighted.

Wagamama, Garfunkel’s and Chiquito among other brands, also reported unseasonally high demand. Through country has lifted domestic restrictions but traveling abroad is still restricted, which means spending has been directed elsewhere.

Also read: Lens on 3 FTSE retail stocks as supply chain disruptions hit food retail

According to the Recruitment & Employment Confederation (REC), the increase in demand for workers saw 193,000 new jobs advertisements posted in the week to 29 August alone.

According to Heier, Pan-Asian chain Wagamama is planning to open around more 40 sites over the next five years, including delivery kitchen.  It also aims to boost its franchise in the US and work closely with partners to expand its business in Europe.

Also read: Which UK companies are considering a 4-day workweek?

CBI warns staff shortage could last for two years

The Confederation of British Industry (CBI), Britain’s leading business lobby group, has warned the UK government that labour supply problems could last for two years if not taken urgent action to address the shortage of worker, which is continuing to affect businesses as they battle to recover from the impact of the Coronavirus.

CBI launched a broadside against the government and said that the economic recovery from the winter restrictions was being undermined by insufficiency of skills in key positions with increasing risks that the challenges would continue for some time.

CBI Director General Tony Danker said the problems can extend beyond the HGV lorry drivers, which is affecting supplies of foods to pubs, supermarkets, and other businesses. He added the country needs to tackle short-term economic needs and long-term economic reforms simultaneously.

Danker added that the government’s aim to make the British work force more productive and highly skilled was right but this can’t be achieved overnight.

According to the Road Haulage Association, the country needs around 100,000 more lorry drivers, which will take around 18 months to train enough people to fill the gap.

Also read: How Brexit has affected the UK banking sector 

The business group is calling for the government’s shortage occupation list, which helps recruit workers from abroad to fill the skill gap, to be updated to include welders, bricklayers, lorry drivers and butchers.

Various businesses had to reduce their as they are unable to meet demands. Restaurant owners have had to choose between lunchtime and evening services as they are unable to cater for both, hoteliers, limiting the number of bookable rooms.

The National Pig Association warned the government to agree to a temporary relaxation of visa rules as farmers may have to burn and kill around 1000,000 animals due to lack of butchers has caused a crisis on pig farms.

Danker added that the Furlough ending is not the panacea some people think will magically fill labour supply gaps. CBI said in a report published on Monday, that businesses with furloughed workers would probably bring them back, which would affect the companies struggling with labour shortages and also added that workers facing redundancy would probably prefer to get back into their old occupation with other companies or would need time to retrain into other sectors.

Also read: Should the UK govt extend furlough scheme beyond September?

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