Why is the job market for skilled staff so difficult?

An exploration of the reasons behind today's difficult job market.

Many of our clients are continuing to have a great deal of difficulty finding skilled staff. In our training courses this is often raised as the biggest current challenge to management. At the very time when economics are becoming difficult and margins are under threat, there is an explosion of new restaurants and cafes, and the skill base on the job market has hit an all-time low.

Young people seem to be avoiding hospitality

Traditionally, part-time hospitality jobs have been the mainstay of youth and student employment, but for some reason this seems to be rapidly changing. Today, many young people seem to be reluctant to work in hospitality, judging from the universally poor response to recruitment ads. There is a perception that the money is poor and the working hours destructive to social life — but it’s been that way for quite a while, and we used to be able to get staff, so what’s changed?

I’m noticing that many hospitality businesses are defaulting to employing migrant staff with poor English language skills in front-of-house roles in desperation. They are experiencing a cruel squeeze between a rock and a hard place — the options to either have no staff and wreck their business, or poor staff and damage their business.

Many young people avoid hospitality because of the hours and perceived poor pay.

Selling prices have not kept pace with inflation in your costs

All your costs have increased above inflation while your selling prices have not kept pace.

I think the root cause behind the whole issue is that the pay and conditions in hospitality are rapidly falling behind community expectations, and the increase in new businesses has diluted the market so far that very few operators are able to increase their pricing in order to cover the cost of better pay and working conditions. In other words, pricing has fallen way behind inflation.

Another possible explanation is that our education standards are getting so high that relatively few people want to do basic jobs any more.

Where have all the Technical Colleges gone? They transmogrified into TAFE colleges, many of which have since becoming universities. To illustrate this I get quite a few Arts and Humanities graduates reluctantly coming through our supervisory training, resentful of the fact that they can’t find a ‘professional’ job and are ‘stuck’ in hospitality. I have never understood the logic of sausage machining graduates out into an economy that has no jobs for them. Recent moves to charge more for degrees that don’t lead to a job may change this over time.

Skilled key staff are especially problematic

Moving up the hierarchy, things are desperate. Try finding a Head Chef or a Front-of-House Manager who can control staff and costs, and you’ll recognise what I’m alluding to. It’s chilling to spend $2000 on advertising looking for an experienced Restaurant Supervisor and only getting three applicants, two of whom are hairdressers looking for a career change and the other is a tired old waiter looking for a hands-off job. That’s been happening a lot lately.

Particular issues in kitchens

People don’t realise that there is a direct nexus between high salaries and working hours, and this creates problems with staff stability. This is particularly evident in commercial kitchens. A business owner might reluctantly pay his Head Chef $90k per year, because you won’t get a decent one for much less, but to make it work commercially they will expect a 60+hour working week. In other words, you want the money, you work 1½ jobs. In reality, this arrangement is a pretty poor deal; it’s really a $60k job with 20 hours of poorly paid overtime each week.

Quality kitchen operation is labour intensive and many wage cost problems occur here.

The other issue we’re seeing is a prevalence of the old scam of putting the kitchen staff on a flat salary and then working them 60 hours a week. If you’re a cook on a $45k salary and you are made to work 60 hours a week, you are getting screwed. Your hourly rate is peanuts and you have to put-up with nights, weekends and a punishing work environment. It’s no wonder we’re having trouble with staffing.

The Gordian Knot

Trying to stay afloat while paying everybody properly often creates an unsolvable problem.

My point here is that in times of employment difficulty logic suggests that you should be doing everything you can to keep your existing staff stable, but if you gave them appropriate hours and pay you would probably go broke. You are stuck with the status quo — that is: hours and conditions that are killing your chances of staff stability, thus creating the necessity to recruit more often into a horrific job market. It’s a kind of HR Gordian Knot.

If natural economic forces take their course we could have a long wait for this situation to resolve itself. It’s not going to happen until the industry regains balance. That means less businesses, higher prices and customers who are confident to spend.

Meanwhile, if you know any property developers, tell them not to build any more cafes or restaurants, please?

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For documentation to support the management systems discussed in this article, please visit our resources website.

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