Population and Immigration in Relation to Hospitality Market in the UK - Essay Example

Population and immigration in relation to hospitality sector in UK. The hospitality sector is made up of fourteen industries comprising of hotels, providers of holiday accommodation, pubs and bars, restaurants, take away food outlets, holiday parks and youth hostels (People 1st, 2005). The hospitality industry is probably the world’s fastest-growing, job-creating profession, employing one in ten people worldwide (Agcas, 2005). It is a large and growing sector currently employing 1.9m people. There has been a growth of six percent in the number of new establishments over the past four years and a growth of seven percent in the employment in this industry in the last five years. People1st, the Sector Skills Council (SSC) for the hospitality, leisure, travel, and tourism sector, UK, envisages an additional 15,000 new jobs between 2002 and 2012, in addition to the 846,000 replacement jobs lost through labor turnover. AGCAS also believes industry will require 30,000-35,000 trained people at management and supervisory level year on year until 2010. Meeting labor requirement is a perennial problem in the industry. This essay will examine why this sector is not popular with the British local people and why there are so many immigrants in this industry. The rationale for the labor requirement can partly be attributed to the Olympic Games being held in London in 2012 (People 1st). According to Lockwood and Guernier (1990), Travel and Tourism analysts, hospitality sector in the developed countries are experiencing labor shortages and can expect to face greater shortages in the future (cited by Choi et al, 2000). The world has shrunk due to advanced technologies and hence finding labor round the globe is easier than it used to be. Due to globalization and free market economy, the recruitment strategy too has to undergo change. Migration of labor worldwide in the hospitality industry is very common. According to People 1st, 11 percent employers find it difficult to fill up the vacancies, as there are not enough people interested in the jobs. Not many skilled people can be found in this industry, and this is a customer-driven industry. Customer satisfaction in this industry is vital. This sector traditionally recruits a young workforce yet the biggest challenge that this sector faces is that of skills shortages. Skills in this industry range from the unskilled porter to the highly skilled managers. The majority comprises the unskilled staff including the food and bar service staff, semi-skilled including the commercial and clerical staff and the kitchen staff (Choi et al). While employers do look for a degree, work experience in the hospitality environment suffices. Another reason for the labor shortage and apprehensions for the future is because very few students are going in for courses in hospitality. The potential is tremendous but awareness of the benefits is lacking. Staff turnover in the sector is extremely high; skilled chefs and managers are in great demand. Managers in this industry have to be well equipped in various fields – the ability to recruit, train, and retain staff, foster repeat clients, which imply sound marketing skills, commercial and business sense, problem-solving ability, patience and management of people. Retention and motivation is another important area which needs attention. Training and development could to some extent help overcome this problem. Career opportunities in this sector are tremendous but due to various reasons, the industry has not been able to attract the local British people. One of the reasons why the local people are not attracted to this industry is the low wages. In UK jobs in this sector are characterized by high degree of part-time working. In four years up to September 2004 employee jobs grew from 140,000 to 1.77 million. (Minimum National Wage). The enforcement of the minimum wage had a strong impact on the earnings in the hospitality sector. Sixteen per cent of employees were paid at the adult minimum wage in April 2004; twelve per cent of employees were paid less than the adult rate of the minimum wage in spring 2004. In the retail sector the hourly earnings depends upon the firm size whereas in the hospitality sector it is the same irrespective of the firm size. Even though the British Hospitality Association (BHA) feels that the high staff turnover in the industry has eased due to recruitment from overseas, this sector continues to face difficulties in recruitment and retention and labor shortages specially chefs. The hospitality sector is clearly affected by the minimum wage. The culture in the hospitality sector differs from the regular retail jobs. Here people cannot expect to stick to nine-to-five job five days a week (Agcas). Work here is customer-focused, service-oriented, and specialized. It usually calls for shift work or unsocial hours of work (People 1st). To move up the ladder staff has to be flexible and adapt to the ever-changing culture of the industry. Within 5 to 7 years, it is possible for a trainee to reach the level of the General Manager of a hotel but it requires a lot of dedication and commitment. This is tough for the local people as they prefer a regular job with fixed hours of working. Besides, the payroll and incentives in this industry are not attractive enough for people to think in terms of a career in this sector. Another reason why local people do not prefer this industry is because of seasonal demand. The native worker would prefer permanent job, which also ensures security. This in turn increases the workload on the existing staff. As a result, customer satisfaction is affected. Due to these reasons, the hospitality sector in UK has started looking overseas to meet its needs. According to the Office for National Statistics, 89 per cent of the sector workforce is of British nationality (People 1st). As mentioned above, this sector recruits young workforce but demographic data reveals between 1971 and 2002, the number of under 16 year olds fell by 16 percent while 65 years olds and above increased by 27 percent. As baby boomers retire this gap would further increase and if this trend continues the sector would have to change its recruitment policy. The world population is unevenly distributed. Out of the ten most populous countries of the world, five countries namely, China, India, the USA, Indonesia, and Brazil – contain half of the world’s population (Choi et al). Six of the top ten countries are in Asia, which implies that most people are concentrated in a few parts of the world. Unevenly distributed population in the world is the main cause of labor shortage. People move out of their own country for economic reasons, or to find better jobs. When people emigrate in search of better oppurtunities, the country benefits too, as the unemployment level comes down. This also becomes a source of earning foreign exchange. Skill enhancement is another positive outcome. Immigrants also bring potential benefits to the host country especially in a sector like hospitality in UK which is experiencing labor shortages. It prevents wage inflation because unskilled migrant labor works at a low wage. The number of migrants in UK has increased over the years due to skill shortages. Legal Migrants are good for the economy maintains the Home Secretary of UK (Blunkett, 2003). They contribute 2.5bn pounds in taxes but consume much less in public services such as housing. They also contribute to the economy by way of insurance payments. Caterer & Hotelkeeper (2004) reports that the majority of immigrants to UK came from Poland (56%), followed by Lithuania (17%) and Slovakia (10%). Half of eastern European and 40 percent of the total immigrants joined the hospitality industry. Most of them took low-skilled jobs like kitchen and catering assistants, as waiters or room attendants. Martin Couchman, deputy chief executive of the BHA, states that the new immigrants were helping to fill some jobs but it was far from satisfactory. The patterns of economic globalization and transnational migration are reflected in and affected by the structure of urban labor markets. Migrant now form 8% of the UK population (ESRC). Linda McDowell, School of Geography University of Oxford and Claire Dwyer, Department of Geography, University College London, states that the hospitality sector continues to have a high demand. Areas in the hospitality sector like catering, laundry, messenger services, cleaning and portering have been privatized or contracted out. They are treated as casual labor. This has resulted in two-tier labor force - the self programmable and the generic. The first is highly valued but the generic is undervalued and under-skilled. Their terms of employment result in high level of exploitation. Evans et al (2005), members of the Department of Geography, Queen Mary, University of London, carried out a research sponsored by the Economic and Social Research Council (ESRC), the Greater London Authority (GLA), Oxfam, Queen Mary, University of London and UNISON. The research was on the state of the low paid workers in four service sectors in London, one of which was the hospitality sector. This research result showed that work in the hotel and hospitality sector is dominated by migrants equally from Eastern Europe and Africa (27.5% each). Most European workers were from Poland, followed by Lithuania. due to the sub-contracting in the industry, wage discrimination and poor working conditions are rampant. This is one of the major reasons of high labor turnover in the industry. Workers in this sector experience the lowest pay rates. Besides, there were complaints of working overtime or on weekends without receiving extra pay. Exploitation, low wages, and poor working conditions, no benefits, result in small job cycle as not many work beyond twelve months in a particular job. Data source for estimating emigration flows from the UK is limited. However, data derived from the IPS (International Passenger Survey) by Office for National Statistics (ONS) reveals between 1996 and 2000, the net inflow migration was positive. This fewer people left UK than which came in to UK. The reasons for inflow of migrants was equally for work, joining the spouse or for studies whereas the reasons for outflow (emigrants) from UK was mainly work related. The population in UK is expected to grow till 2031. The reasons would be two-fold -more births than deaths and more immigrants than emigrants (NSO). The local people in UK resent the migrants for various reasons. Migration Watch (2005), an independent and non-political organization, feels one of the main reasons is the number of transnational marriages that take place. Such marriages cause a setback in the integration process. Racial segregation will soon become an issue in Britain. The flow of spouses from the Indian sub-continent doubled between 1996 and 2001 (Migration Watch). As a result today in Bradford nearly 30% children have mothers of foreign origin. Ethnic minorities increased by about 50% between 1991 and 2001 in Manchester, Birmingham, and Bradford. Another reason for the resentment against the migrants is that they are prepared to work at a low payroll and put in more hours of work. This consequently also reduces the number of jobs for the British, apart from keeping the payroll low. Housing is another major concern, which affects the local people. Migration Watch reports that by 2021 one million homes would have to be built purely for immigrants. The present government in UK has introduced the quota system for low-skilled workers in the hospitality sector. The current quotas for 2004/05 are 6,000 permits for food processing and 9,000 permits for hospitality (Home Office, 2005). This scheme introduced in 2003 was meant to alleviate the recruitment problems in the sector. Now, the Governments Five-Year Strategy on Asylum and Immigration, published on 7 February 2005, states these schemes would be phased gradually as additional labor is now available from the EU accession states. Due to stiff competition within the industry, employers tend to be secretive about the source of their labor. Under the Immigration, Asylum and Nationality Bill 2005, the offending employers could face upto 2000 Pounds Sterling for each illegal worker, and possibly a two-year jail sentence (Caterer & Hotelkeeper, 2005). The employers would also have to keep a regular check on the work permits of the immigrants as per government regulations. Labor across the world is becoming educated, skilled and highly ambitious. Choi et al state international migration in the hospitality industry will increase as information technologies advance. The demand in one region can be met by the supply from another part of the world but UK has to ascertain the impact immigration would have on its economy. Skills have the potential to increase or reduce the performance of the sector. Training contributes to productivity. Training and skills have to be supported by the right organizational culture. We can thus conclude that the job cycle in the hospitality sector is very small, with a very high turnover of staff. The native worker does not prefer this industry because of low pay, more hours of work and seasonal demand. The migrant workers find it suitable because he earns much more than he would back home and unskilled labor is in abundance. The local people resent the influx of migrants. The recruitment strategies need to be changed and the strict government regulations will further aggravate the labor shortage in the sector. The only way to attract people to this industry is to bring about innovative changes. The minimum wages have to be given and the hours of work have to be flexible to suit the individual requirements. Incentives have to be provided. There has to be strict adherence to the maximum number of hours that any one can be allowed to work. The government and the sector itself should take steps to motivate students to go in for the formal courses because the industry requires highly skilled managerial staff to be able to meet its needs successfully. Unless these changes are brought about this sector would not be able to attract quality staff as in other areas. This sector has tremendous potential and challenges but lacks the right managerial staff. 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