Younger people seeking careers in hospitality could pay the price for soaring business costs which are likely to lead to reduced employment opportunities.
The stark warning issued by Regency Purchasing Group, one of the UK’s leading procurement businesses, comes as companies try to cope with rising costs, from increases in the minimum wage and employer National Insurance contributions to higher bills from their suppliers. It says that with budgets being stretched further than ever, companies are tightening their belts to balance the books – which is bad news for potential new recruits.
Alex Demetriou, founder of Regency Purchasing Group and CEO of Foodbuy UK&I, said: “Employers know that increasing the minimum wage for workers aged over 21 by 3.4% means that efficiencies will need to be implemented.
“When employing younger people, and faced with increases of up to 14%, you are looking for a significant efficiency from those younger members of staff.
“The other challenge is that, as the gap closes between 18-20-year-olds, and the over-21s, businesses face a choice of employing someone with 10 years’ experience, or taking on someone with none.
“The gap between the two used to be material but my fear now is that, as this gap closes, employers will undoubtedly choose experience every time, which will significantly limit employment opportunities for younger people.”
The national living wage, which applies to workers aged over 21, rose by 3.4%, to £12.21 per hour on April 1st, while the minimum wage, which applies to those aged between 18 and 20, has risen by 12.7% percent, to £10 an hour – the biggest increase since it was introduced in 1999.
Alex added: “Hospitality is such a special place, which harnesses so many of our future leaders across all sectors and industries.
“It’s one of the few industries that teachers you from a young age how to interact with different people.
“Walking along a seafront eating fish and chips is not a class-based activity, it’s an every-person activity and the young people working in our wonderful industry learn the skill sets to engage with all walks of life.
“Irrespective of whether they stay in hospitality or not, they learn invaluable life skills that I far will be lost if we do not find a way to encourage – and support – businesses to give young people a chance.
“It’s widely acknowledged that the inability to find work in the sectors they want to join, as well as potential spells of unemployment due to a lack of opportunities, early in someone’s working life can have long-lasting effects on the career path they end-up taking.”
