Food for thought for restaurant sector in latest Labour Force figures

The latest Labour Force Survey was released this week by the Central Statistics Office and paints a picture of an economy that is continuing to recover following the easing of Covid restrictions.

It showed that the number of people employed in Ireland increased by 10.1% to just over 2.5 million in the year to the fourth quarter of 2021.

It is the first time the number has exceeded 2.5 million since the CSO data series began.

But it is not an equal recovery across the economy.

Looking at the employment figures on a sector-by-sector basis, it is clear that certain categories of businesses are bouncing back far quicker than others with growth in some industries now ahead of pre-pandemic levels.

For example, employment in the Information and Communication sector was almost 31% higher in the fourth quarter of 2021 compared to the fourth quarter of 2019, that equates to an additional 39,400 people working in the industry.

"The buoyant Irish jobs data emphasises remarkable economic 'bouncebackability' but also highlights sectoral divergences," according to Austin Hughes, Chief Economist with KBC Bank Ireland.

He notes that while a range of areas that would tend to be significantly associated with the operations of multinational companies as well as healthcare are showing buoyant growth, the current momentum in the Irish jobs market is not evenly distributed.

"The pandemic and the structural changes it has prompted have seen sustained employment losses in a number of sectors, most notably hospitality related areas and support services," Mr Hughes said.

The accommodation and food service activities sector has seen employment levels fall by 9.7% or 17,300 compared to the fourth quarter of 2019.

The hours worked per week in the sector are also still below 2019 levels.

Restaurants Association of Ireland CEO Adrian Cummins says there is no surprise within the hospitality industry that employment is still below pre-pandemic levels.

"We've been flagging this since the middle of the pandemic. In 2020, at the beginning of the lockdowns, one third of workers left the industry.

"15% returned to their home countries and 15% went to other sectors that were seen as more stable," he said.

"Those numbers have not come back into the industry."

In a recent survey by Fáilte Ireland, 30% of businesses in the tourism and hospitality sector said they could be forced to close if recruitment challenges aren't resolved.

The study also estimates that there are 40,000 vacancies across the industry with unfilled roles across every level, from front of house to middle management where 25% of the vacancies lie.

Calls for 'one stop shop' for visas and work permits

Mr Cummins says that there has been a "mass exodus" from the hospitality sector right across the European Union and that employers are now looking beyond the EU's borders for workers.

That means visas and work permits, a process that Mr Cummins describes as slow and cumbersome. He says it can take months for workers to come through the system and he is calling for a 'one stop shop' for visas and work permits in order to simplify the process.

The Department of Enterprise, Trade and Employment says it recognises the impact delays on the processing times for work permits has for businesses and their workers and has developed a plan of action which includes the recruitment of additional permanent and temporary staff and the temporary reassignment of staff from other areas of the department.

Aside from attracting workers from abroad, the Restaurants Association believes that one of the best ways to boost employment in the industry is to make the hospitality sector more attractive to Irish school leavers.

"We need to go and show the young people of Ireland that there is a career for them in the industry," Mr Cummins said.

That will require big changes to workers' terms and conditions according to Dr Tom McDonnell, co-director of the Nevin Economic Research Institute, the trade union-backed economic think tank.

"Employers in the hospitality sector will have to offer better security for workers and more regular hours, giving people career paths and increasing wages as years pass," he said.

"As we move towards a living wage, it will increase pay in the hospitality sector."

Dr McDonnell believes however that we are likely to see some business closures in the industry.

"There isn't necessarily a happy ending here. There may have to be a consolidation in the sector which means less restaurants and less hotels," he said.

"Over the medium term, I would see hospitality becoming a smaller part of the economy but we shouldn't lament the decline of the sector in the long term as it reflects a move towards better paid jobs," he added.

As the economic recovery continues and disposable incomes rise, demand for restaurants and hotels will increase.

So too will the wages on offer but attracting Irish school leavers and workers from abroad will continue to be a challenge in a jobs market where employees are in such high demand.