By Andrea Rasca
The hospitality sector is under pressure, but foregoing fair pay is not a long-term solution, writes Andrea Rasca
Over the years, hospitality and retail sectors have been stretched beyond belief by crises from Brexit and the loss of overseas staff to the lack of footfall during the pandemic and now the cost of living crisis.
Hospitality and retail leaders are understandably feeling overwhelmed. But while the upcoming National Living Wage that kicks in from April (increasing minimum income from £10.42 to £11.44 per hour for over-21s) might feel like another blow, paying workers a fair wage is absolutely essential to the future of these industries.
The reality is that businesses need to take more responsibility for their employees and the communities in which they operate. While keeping wages low will help businesses in the short-term, in the long-term, they will only drive away talented people to work in better paid sectors.
While big businesses are not afraid to commit to lofty ESG targets, smaller hospitality businesses also have a role to play and, in many ways, can make more immediate and significant differences in their communities.
It’s an uncomfortable truth, but the hospitality sector has a track record of low pay. In 2023, the lowest-earning employees in the UK were aged between 16 to 21 years (48.9 per cent), with 39 per cent working in the hospitality industry. Wage growth in the hospitality industry only increased by six per cent in the third quarter of 2023, compared to nine per cent in finance and business and seven per cent in manufacturing.
To prevent workers leaving the hospitality and retail sectors, they need to be paid fairly, otherwise we will see talented chefs and service people opting for more lucrative careers. As businesses, we should be committed to paying people a fair wage that enables them to lead a happy and productive life.
Hospitality or retail businesses that invest in their workforce will ultimately benefit through higher productivity, greater loyalty and increased retention. This is more important than ever with the new migration policies that will raise the minimum salary for a skilled worker visa, worsening the pre-existing labour shortages.
All businesses must become more committed to holistic sustainability both within their organisations and in the communities they operate in. While the environmental aspect of ESG gets the majority of the attention, the social aspect, particularly fair worker pay, is often overlooked.
Wages in the UK have been chronically low for a long time and the UK does not stand up well against other developed economies like the US. Hospitality businesses must lead by example to drive better pay across the industry and even offer better pay than the new National Living Wage. Without a fair wage, businesses cannot expect workers to stick around for long.
In the spirit of fostering fair pay and supporting our communities, Mercato Metropolitano has committed to the London Living Wage and received the Mayor of London’s Good Work Standard by London’s first Night Czar Amy Lamé. We urge those who can pay the London Living Wage to do what they can to support the 10 per cent rise introduced last year from £11.95 to £13.15.
It is important for leaders to not only be pro-business but unequivocally pro-people, and it is critical that no one is left behind in our communities. This can only be accomplished if businesses are prepared to pave the way and embody the change that they so frequently talk about.
