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BRIGHTON, England (Reuters) – For Josh Hughes-Davies, the best thing about his job in a bar in the coastal city of Brighton is the free meal with every shift.
For his manager, Barrie Chapman, the overtime he now gets is a huge boost once unheard of in the hospitality sector. Their regional manager Jen Eaton (NYSE:ETN) looks back in horror at the 14-hour shifts she once worked in casinos in heels with no break.
Like thousands of others in lower-paid sectors of the British economy, all three have benefited from a gradual improvement in employment terms since the global pandemic and Brexit forced companies to work harder to find staff in a tight labour market.
The shift follows years of warnings from unions and campaign groups that the balance of power in Britain had swung too far towards employers, leaving many lower-paid staff working unpredictable hours with poor benefits and little protection.
Nick Collins, CEO of Loungers which employs Eaton, Chapman and Hughes-Davies among 8,000 staff in restaurants and bars across Britain, said expectations of employees had risen.
“And rightly so. The combination of Brexit and COVID have transformed the market,” he told Reuters.
Conversations with 18 company bosses, HR managers, a union, economists, recruitment groups and workers suggest big employers in hospitality, retail, logistics and security are all offering more flexibility over the hours people work, better financial support for sick leave or private healthcare and other perks.
Since the pandemic, U.S. giant Amazon (NASDAQ:AMZN) UK has joined retailers Tesco (OTC:TSCDY) and Marks & Spencer (OTC:MAKSY), as well as logistics group XPO and security company G4S (CSE:G4S), in offering flexible working contracts.
Global recruitment company Indeed told Reuters there has been a steady increase in the percentage of postings offering paid sick leave over the last 18 months, including in hospitality and other lower-paid sectors such as healthcare.
Tesco, Britain’s largest private-sector employer now provides its 310,000 staff with an online private family doctor.
And data from the Office for National Statistics (ONS) show the percentage of people saying they are happy with their hours has been at the highest level over the last year since 2007.
WAGE RISES
While the moves can increase costs and complexity for employers, the former finance director of a FTSE 100 company said businesses had no choice as staff retention had become such a hot topic when workers were hard to find.
The executive who sits on other company boards said he expected the use of automation and the hunt for efficiencies to grow as employment costs rise. He asked not to be named because he was not authorised to discuss the matter publicly.
Britain’s labour market started to tighten in 2021 as older people retired early during the global pandemic, Europeans returned home after Britain left the EU and an increasing number were too ill to work.
With just under 1 million job vacancies still open, it has been one factor behind Britain’s stubbornly high inflation rate. It hit 11.1% in October before falling to 6.7% in August, still one of the highest of any major economy.
That has forced major employers such as supermarkets, logistics groups and big coffee and food chains to raise wages on multiple occasions in the last 18 months, and even resort to making counteroffers to prevent staff from going elsewhere.
Regular pay, excluding bonuses, was 7.8% higher in the three months to July than a year earlier – the joint-fastest growth since comparable records began in 2001.
Loungers said that while its overall wage costs had risen, profits had continued to grow and staff loyalty had increased.
At its “Alcampo Lounge” venue in Brighton, staff can get a free meal per shift, flexible hours, bonuses, and overtime for salaried employees. They also get some weekends off and avoid having to work late and then open early.
While the rapidly growing company had always prided itself on offering above-average pay and decent terms, some of those changes have come in since the pandemic.
“There’s been a trend in hospitality to work staff hard, to not treat them very well, because there was always another person that would come in,” said head chef Chris Lloyd-Rogers.
“That’s changing because of the way the world is right now,” he said, referring to the many eastern Europeans who used to work in kitchens but left Britain after Brexit and the pandemic.
JOB SATISFACTION
Tony Wilson, director of the Institute for Employment Studies (IES), said as the labour market tightened companies tried to provide flexibility and job satisfaction to lure back those who had left the workforce.
While Britain had one of the highest minimum wages in the world compared to average salaries even before the current labour shortages, it was very much a laggard in the area of minimum employee benefits, according to the Organisation for Economic Co-operation and Development.
“That’s why people leave work, and it’s what brings people back,” Wilson said.
Recruitment website Indeed said its regular survey of job seekers showed that the most highly valued benefits were flexible working and sick pay.
Retailer M&S, which provides meals for warehouse workers and gift cards at Christmas, said more women had gone into store management roles after they allowed retail managers to share jobs, or do a four-day compressed week.
“The pandemic certainly accelerated our focus on making flexibility work for our store managers,” HR director Sarah Findlater said.
Fiona Walters, the head of the UK arm of security and outsourcing group G4S, said allowing staff including prison wardens to work shorter shifts or split shifts did increase complexity and the cost of managing the workforce.
But she said it had helped to recruit more women and there had also been a small drop in the rate of staff leaving.
“We’re seeing green shoots,” she said.
Over the past year, the number of working-age people who say they are not in employment because they are looking after family or home – a group which is 85% female – dropped by 167,000, or a 10% decline, according to ONS statistics.
The Resolution Foundation think-tank says, however, that despite the recent shifts there is still a stark divide between the sick pay and maternity leave that workers can get depending on whether they are in well-paid or low-paid jobs.
The Indeed data for the last 18 months showed that only 8.9% of job postings in hospitality and tourism offered paid sick leave, though that was still a stark jump from 4.5% when they first started to look at the trend in March 2022.
The labour market is, however, showing clear signs of cooling as the economy slows, posing the question of whether employers will retain the new approach to hiring and retention.
Wilson at the IES said bosses should get used to tighter conditions in general because of the country’s ageing population and tighter immigration controls – and that could be bad news for smaller firms struggling to compete.
Amit Puntambekar has to work 90 hours a week at the supermarket he runs near Cambridge – and rope in his elderly parents to help – because he cannot match the salary and benefits being offered by the big supermarket chains to attract enough staff, despite paying more than the minimum wage.
“I’m at my wits’ end over what to do,” Puntambekar said.
(James Davey reported from Brighton, Kate Holton and David Milliken reported from London; Editing by David Clarke)
