Business

Hospitality sector faces ‘perfect storm’ in 2024 as wage demands increase

Next year’s minimum wage increase ‘could cripple Irish hospitality businesses’, says managing director of Excel Recruitment

The 2024 hotel and catering salary guide published by Excel Recruitment on Thursday says the 'spiralling cost of employment' is the biggest threat facing the hospitality industry next year. Photograph: iStock

Ellen O’Regan
Thu Dec 14 2023 - 05:00

The Irish hospitality sector faces a “perfect storm” of employment law changes taking effect next year, with employers already struggling to keep up with wage demands, according to a prominent recruiter.

The 2024 hotel and catering salary guide published by Excel Recruitment on Thursday highlights that the “spiralling cost of employment” is the biggest threat facing the hospitality industry next year, with salary increases reported all across the sector.

The guide notes that chefs have secured some of the greatest pay rises in the sector in the past year, due in part to huge demand for staff in these roles.

The average salary of a second-year commis chef has risen by about 14 per cent from €28,000 to €32,000, while a junior sous-chef can now expect a typical salary of €45,000, a 12.5 per cent increase from €40,000 a year ago.

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The average salary for a receptionist has increased by 12 per cent, from €32,000 to €36,000, while a wedding coordinator can expect to earn €40,000 on average in 2024, up 6.7 per cent from €37,500 in 2023.

Shane McLave, managing director of Excel Recruitment, said that wage increases are being seen largely in more junior roles.

“The cumulative effect of the seemingly modest incremental increases that we are seeing across the board in these lower-paid but high-volume roles is putting huge pressure on businesses in the hospitality industry, and this will dominate the fortunes of the hotel and category sector in 2024,” he said.

He added that an increase in the minimum wage from €11.30 to €12.70 in the new year “could cripple Irish hospitality businesses in 2024″.

The recruiter noted a recent Ibec report, which found that 84 per cent of businesses increased wages this year, and 82 per cent plan on increasing them again next year.

Excel’s report noted that there are a number of factors currently driving employment costs up and which will “no doubt result in many small and independent establishments closing their doors for the last time”.

These include the rise in minimum wage, enhancements to paid sick leave, pension auto-enrolment, and the housing and cost-of-living crises that are forcing people to seek accommodation outside cities.

[ Michael Brennan of Killarney Hotels: ‘It’s probably more efficient to close at Christmas’ ]

Mr McLave said that the nature of hospitality work is becoming less attractive in a candidate-driven employment market, and employers are offering increased standard benefits to attract staff.

“Employers are consistently finding themselves under pressure to up their game in order to retain and attract staff but given the financial pressure that so many are under and the increased costs employers are facing, this can only go on for so long,” he said.

Ellen O'Regan

Ellen O’Regan

Ellen O’Regan is an Irish Times journalist.

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