Tourism businesses warn that staffing crisis could shut them down

Up to 30 per cent of tourism and hospitality businesses say they could face closure if the sector's staffing crisis is not resolved, according to new research by Fáilte Ireland.

But workers in the sector – who were also surveyed by the State tourism authority – complained of long or unsocial hours for bad pay, “condescension” from customers and poor treatment from managers.

Fáilte Ireland, at the unveiling at the Convention Centre Dublin on Tuesday of its strategy for 2022, revealed the results of two major pieces of research on the sector’s labour crisis. That included a survey of 1,000 employers as well as a study to measure the perceptions of 5,000 workers with and without experience of the sector.

The results shed light on the scale and causes of the labour crisis crippling the industry, which currently sees it with 40,000 unfilled roles after pandemic restrictions and business closures drove away thousands of workers, compounding a pre-existing staff shortage.

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The research reveals that more than a quarter of the sector’s workforce who were forced to avail of the pandemic unemployment payment (PUP) subsequently left tourism and hospitality to work in other industries. Paul Kelly, Fáilte Ireland’s chief executive, said there was a “mass exodus of workers into other industries that reopened earlier”.

According to Fáilte Ireland, about a third of last summer’s workforce comprised people who were completely new to the sector, which some employers have previously admitted led to pressure on service standards.

About 80 per cent of businesses surveyed said the labour crisis could force them to cut trading hours or otherwise reduce capacity in their business.

The crisis is most acute in roles associated with food and beverage functions, according to employers. About 88 per cent of businesses who hire chefs say they have “considerable difficulty” doing so.

Ten per cent of employers said they had resorted to offering a “signing-on bonus” for new staff, while 12 per cent said they have paid “introduction fees” to people who connected them with potential workers.

Hiring obstacles

Employers say the biggest hiring obstacles they face are the unsocial hours required, while 60 per cent also cite “unrealistic wage expectations” from prospective workers.

While the finding on unsocial hours chimes with the perceptions of current, former and potential workers surveyed, the employers’ experience of wage expectations sits uneasily with the view that workers have on pay in the sector.

More than 60 per cent of workers contacted via recruitment site Jobs.ie felt they were “not paid what they are worth” in the tourism and hospitality sectors.

More than half of those surveyed said that in their last job in the sector, they were paid €10-€12 per hour, while 16 per cent said they were paid €10 or less.

The legal minimum rate of pay recently rose from €10.20 to €10.50 per hour, but Fáilte Ireland said the low pay findings of its survey were likely to be caused by the fact that the minimum wage was lower again for workers under the age of 20, and those under 18 only had to be paid 70 per cent of the minimum wage.

Fáilte Ireland found, however, that many workers would be prepared to return to the sector if its low pay and working conditions were addressed. “The situation is recoverable,” it said.

To help combat the crisis, Fáilte Ireland has revealed it is tendering for a company to run a new Excellent Employer initiative. It is designed to improve working conditions and make tourism and hospitality businesses more attractive to potential staff. To receive the Excellent Employer designation, businesses must sign up for three years, commit for all their managers to receive formal training on staffing issues, and allow a formal survey of staff each year.

Identifying trends

The results of the surveys will be used to devise "action plans" for individual businesses, according to Jenny De Saulles, Fáilte Ireland's director of sector development.

The collated results of the 500 businesses that it hopes will take part will also be used to identify trends. The Excellent Employer scheme will be formally launched in April, and Fáilte Ireland will fully subsidise participating companies’ fees for the first year, and partially subsidise them for years two and three.

“We are pushing an open door here with many employers, who know that some of the working culture in the industry has to change,” said Ms De Saulles.

As part of its 2022 strategy, Fáilte Ireland is also doubling investment in marketing for domestic tourism to €10 million, while it will launch a new strategy for business tourism in the second quarter of the year.