The United Kingdom has a long way to go before formally leaving the European Union, but the move could soon create staffing issues for U.K. hotels.
REPORT FROM EUROPE—With the United Kingdom government on the verge of triggering the first steps of exiting the European Union, sources warn that hoteliers need to have strategies in place for potential staffing issues that could arise from the so-called “Brexit.”
As early as next month, the U.K. is expected to invoke the official exit procedure by invoking Article 50 of the Lisbon Convention. Sources said this could cause two primary problems: Hiring EU nationals will become more difficult, and the British pound could lose value, making working in the country less attractive.
Even if the process starts soon, it will be a matter of years before the U.K. officially leaves the EU, and many hoteliers are not sweating the transition just yet.
“Frankly and honestly, I have not seen a great change of attitude from employers, and that is because of the time issue. Article 50 needs to be triggered, and then there are at least two years of negotiations,” said David Buckle, an employment lawyer at Cubism Law. “And then what happens if there is a breakdown in these negotiations?”
Buckle said this attitude reflects the reality of the industry.
“Another factor is the nature of hotel employment is generally short,” he said. “There is traditionally a high turnover of employees, so if you look at all of this in terms of what might happen in two years’ time, that might not affect employees now. What we might see is an acceleration of concern and action as it becomes clearer as to what the EU’s position will be.”
While the regulatory effects are still in the distance, the uncertain nature of the situation and the reality that the U.K. is ultimately leaving the EU is already having an impact on potential employees’ attitudes.
Stewart Campbell, managing director of management company Redefine|BDL, was highly critical of the move, saying it equates to a massive attack on the free movement of people and will have a disproportionately large effect on the country’s hotel industry since the majority of staff are born outside the U.K.
Campbell said he’s already seeing Brexit-related turnover.
“We’re seeing fewer candidates (from the EU), as the weakness of the pound (sterling) means real wages are diminishing when converted into euros,” he said. “People are leaving the industry.”
Buckle said that ultimately any discussion about preserving the rights of EU nationals to work in the U.K. will “be a discussion on reciprocity” and will hinge on future negotiations.
Thomas Mielke, managing director of AETHOS Consulting Group, said recruitment within hospitality organizations has slowed down as a result of the increasing complexity of the hiring environment. This might not mean a drop-off in the actual number of hires, but hoteliers are finding themselves in an ever-more-difficult balancing act, weighing the skills needed, the availability of candidates, the affordability of the “right” candidates and securing the “cultural fit.”
“Throw in issues like diversity, and you certainly do have a complex task at hand,” Mielke said. “Now, with the ‘labor insecurity’ the industry is facing, there are additional aspects (human resources) departments need to take into consideration.”
He said this causes hoteliers to hesitate when making staffing decisions.
“The current limbo is thus acting like a stop sign (that) does not want you to end your journey but asks to pause and take a break before you continue,” Mielke said. “This slowdown in recruitment is, however, not only putting increased pressure on the resources of any HR department but also on the business leaders and the operations itself.”
Brexit-related changes will hit all hotel employees, Buckle said.
“There’s a broad range of employees who could be affected, in terms of visas, permits and sponsorships, from management to cleaners, and there will be a cost attached to all of it,” Buckle added.
He noted that hoteliers need to continue to work under the existing rules, as Brexit and the related negotiations haven’t happened yet.
“If you discriminate against those who have freedom of movement, you will be penalized,” Buckle said. “Proving discrimination might not be easy, though.”
The whole area will prove to be a minefield, especially in an industry where speaking other languages is seen as a benefit, not an issue, Buckle said.
“Legally there will have to be a cutoff point,” he said. “There might be a status quo on laws as they stand in the short (term), but then there might be more variance as time goes by. The government’s white paper on Brexit talks of having a ‘review,’ and that could hide any number of potential issues.”
Buckle said immigration law ultimately will have to change to accommodate Brexit even if employment regulations stay the same.
“They will have to change, as they were so fundamental to the Brexit referendum,” he said, adding that EU nationals wishing to stay in the U.K. should consider applying for higher status in order to remain.
The European Parliament is currently investigating accusations the U.K. is impeding rights of EU citizens living in the U.K, which is contained within Article 21 of the Treaty of the Functioning of the European Union and Article 45 of the Charter of Fundamental Rights.
Regardless of what the legal ramifications are, Mielke said the hospitality industry will almost certainly have to face a “talent squeeze.”
“It looks like there will be additional administrative burdens to secure the amount of talent needed and only time will tell whether ‘local’ talent can sufficiently fill that gap,” he said. “It is therefore now, more than ever, crucial for HR departments to look at and reassess their internal talent management and development programs.”
Mielke said hotel companies should consider:
- How is your firm helping existing employees to succeed and progress in order to secure the next generation of leaders?
- What does your retention rate look like, and what can be done to improve it?
- Are compensation and benefit schemes aligned to the company’s overall talent strategy?
- Are you aware how current employees are feeling, their worries and what can be done to alleviate them?