One issue dominating the recovery program of United Kingdom hotels and hospitality is labor.

Furlough schemes, the huge reduction in revenue, employees seeking and finding new industries to call home and the lingering effects of Brexit all have created concerns for hoteliers.

“Labor shortages have been exacerbated by COVID, not by migrants. For example, Mitchells & Butlers has lost 7,000 of its 37,000 staff to furlough, and they are just not coming back,” said Bob Silk, relationship director at U.K. bank Barclays.

Those with hotel industry skills and experience might not find their way back, while the devastating effect of the pandemic on other industries, notably retail, is leading to more applicants for most open positions.

“Adverts for jobs are inundated with applicants, so the challenge is to sift through them. I know of one 5-star hotel in Knightsbridge that laid off all its staff. Some 350 people now back, but they had 40,000 applications,” Silk said.

Thomas Mielke, managing director at AETHOS Consulting Group, said he is a firm believer that talent pipelines need to be sustainable, but they currently are not.

“Irrespective of whether staff shortages are now caused or only exacerbated by COVID-19 or Brexit, one thing is clear: There does not seem to be a reliably large enough talent pool here in the U.K. to fill the required vacancies. This has been the case for quite some time now but is not a problem unique to the U.K. either,” he said.

Mielke said there is definite evidence of employees not returning to the hotel industry from furlough. Some have returned home to their European Union countries or stayed in the new sector where they might have found temporary employment during the pandemic.

He added some employers have taken actions such as offering 20% pay raises to lure people back or to poach them from the competition.

“Some might say this addresses a longstanding issue around pay, others might only see this as a temporary and short-term solution. Sustainable, it certainly is not,” Mielke added.

Hoteliers need to be proactive, and many have been.

Crerar Hotels CEO Chris Wayne-Wills said his firm is investing more than £1 million ($1.39 million) in recruiting approximately 35 staff members — money that will pay salaries but also build careers to retain those employees. Crerar has seven hotels, all in Scotland.

The Edinburgh-based firm also is instigating an employment initiative, the Crerar Academy, to provide “access to training and development through university partners, access to industry body scholarships and a dedicated [Scottish Vocational Qualifications] partnership aimed at allowing employees to gain formal qualifications,” according to a news release.

Those taking part in the program will hope to emulate Crerar’s Carolyn Carrington, who started as a receptionist at the firm and now is general manager at its Golf View Hotel in Nairn, Scotland.

“The industry does provide opportunities for lifetime development. There are opportunities for travel, and no two days are the same, but we do need to give a job with life, not for life,” Wayne-Wills said.

“Firstly, we have to lead by having the leading hotels in our markets,” he said, noting the company is focused on a portfolio-wide renovation and re-positioning to its assets to 4-star, full-service hotels that remain authentic.

He added when U.K. hotels reopened in May, his company's hotels had occupancy of 91%.

Average daily rate "is trading positively ahead of 2019 due to repositioning,” he said.

He said U.K. hotels were set to face labor challenges even before the pandemic took hold.

“Brexit would always have been a challenge, as there was a tendency to non-U.K. workers. Strategically, we had to recognize the impact it would have, and COVID-19, too, has meant we had to re-evaluate things,” he added.

Wayne-Wills said the industry has had to adapt to changing workforces before.

“In the late 1990s, it seemed that every bar person was an Australian. In Manchester, then almost everyone was Portuguese, and then we saw lots of Polish staff. What we are seeing now is different in that it is more difficult, but the outcome depends on how we turn a lens on that,” he said.

Hotels weren't the only industry hit hard by the crisis.

“Hospitality has been impacted, and that creates instability, but the bigger reality is that there has been more at risk in retail, and we all need to adapt. There is a new level of trust in home-working, using Zoom and other software. My first reaction was to go Zoom, and the new normal becomes the new normal very quickly,” Wayne-Wills said.

He said the industry has faced a reckoning on how to structure its workforce as "lots of jobs now do not need to be done on site."

Crerar is focused on employee benefits that attract and retain staff, while giving them the notion of a career.

“Benefits should reflect the lifestyles our teams have,” Wayne-Wills said of his rural portfolio.

“You work for us, you can get driving lessons up to £250 ($345), an extra day’s holiday on your birthday, cash-back schemes on the weekly food shop, a treat each week such as a coffee to a cinema ticket, paid job-swap days, a full wellness package with free access to apps, meditation, health, online [healthcare] and prescription delivery,” he said of some of the ideas the firm has implemented.

He added many benefits do not require a cost outlay.

“We’re the most dog-friendly company, and they can be brought to work. If you sadly lose a pet, there is bereavement time off. Flexible working is a must. With school starting in August, [employees] get the first morning off, and we all know this is one of the most important days. So are school nativity plays and sports days,” Wayne-Wills said.

The company also directly incentives employees finding job candidates.

“Recommend a friend and you can earn £250 ($348). Convince four friends and families, and that is then noticeable, and our colleagues of course are the best at knowing what our expectations and culture are,” he said.

Wayne-Wills said the motivation for an employee to change industries can be small.

“I was at our Glencoe … chatting to a breakfast chef who was thinking of leaving. We do pay the National Living Wage, but they said they could get 50p an hour more elsewhere, but with our academy, they might get to be head chef in three or four years. That creates a future, and that employee raising his concerns has him now on my radar, too,” he said.

AETHOS’ Mielke said rather than focusing on the status quo and the challenges at hand, it might benefit the sector to have a more constructive conversation about the talent strategy.

He said he believed the questions that need to be asked include:

• What are the reasons a relatively large number of employees have decided not to return? Was it compensation?
• What can the industry do to drive employee engagement and loyalty outside of pay increases?
• What would make employees stay?

He said sustainable-talent strategies recognize the need for ongoing and proactive talent management, and they rely on alignment of business needs with hiring best practices.

“It also requires companies to have a very good overview of their internal competencies and talent gaps. Some organizations have used the time during the pandemic very wisely to engage more actively with their staff [furloughed or not], training and developing them in those areas where they know the internal talent gaps are and/or where they know the organization will need more people when reopening,” he said.

“Many have also sought out and proactively nurtured ‘passive talent,’ as well as young graduates, in a very targeted way, looking to attract more people to the industry. Others have put efforts and resources behind developing more structured and concrete training and development programs rewarding employees more quickly, offering attractive career development opportunities and/or career paths, which can provide more earning potential or, for example, greater flexibility to work part-time or from home,” Mielke said.

He said that those businesses taking proactive steps have reported fewer difficulties in recruitment.

He added that even if some employees choose a new career, businesses should assure that they leave in good terms.

“Sometimes, though, letting go of these employees is the right thing for the staff and the company. It allows for them to gain experiences elsewhere, to be exposed to different work environments or learning opportunities. Just make sure that these employees are ‘good leavers.’ They might recognize that the grass is not always greener on the other side and/or help build your employer brand by spreading a positive word of mouth,” Mielke added.