Last week I attended Propel’s quarterly multi club conference, ‘New Ways of Working’ to catch the latest industry insights. Unsurprisingly, the consensus swayed closer to concern than confidence for the sector’s future. From discussions around inflation and VAT, to workforces, consumer confidence and Government support, the multi club was full of talking points as pressures bottom out.
The first thing I wanted to write about was the main talking point – the big energy bills. On the opening ‘Money Talks’ group, one panellist said, ‘the best will survive and thrive”, suggesting costs and inflation are not as much of an issue for the top 25% and that businesses aiming at richer markets in the South-East of England will likely do better. But what does this mean for the smaller operators? If we look back at the last two years and the relentless toll they had on the industry, can we look forward now at the effects of VAT and see these businesses fighting another two years? The truth is, we don’t know what will happen. We know that consumer confidence is lower, there’s an issue around labour, and inflation in energy of 500 or 600% certainly won’t make it an easy fight.
Is Government intervention a viable consideration or a hopeless dream? One speaker suggested that the new Prime Minister could have a positive effect for the sector, noting how during the pandemic, Hospitality’s importance to the economy was recognised. This attention from the Government did a lot in the way of exposing how many people are directly and indirectly employed by the sector. The sense I got was an extremely cautious optimism, with the hope of help underpinned by a message to not rely on the Government and assume that the support could fall away, and costs will flow through.
Whilst these concerns are ever-present and should be talked about, the discussions around labour took centre stage for me. All of these issues in one way or another circle around the fact that we are a people-based sector. It is an indisputable truth, and one that will be the sector’s saving grace. When we talk about people, we are talking about customers, but equally, we are talking about workforce. Running a high-labour business is becoming more and more complicated, and it will begin to hit returns and margins. In a sea of cost crises and demand impact, now more than ever it is crucial to tackle struggles around labour availability, costs, and retention. Alleviating these concerns should form the foothill of every business plan.
The fundamentals haven’t changed: the team experience influences the guest experience. Consumers are less forgiving about service – they are out less and so now more than ever operators need to ensure excellent service. I found that Turtle Bay appeared to really take this message on board. Recruiting hard and building a workforce with a ‘One love Culture’ that centered on diversity, inclusivity, retention, and development was their core competence, and this freedom within a framework works wonders for business.
Many operators may ask: what steps can I take towards creating a culture of happiness for my staff and customers? My advice would be to start with the basics: understanding your trading patterns and organising your rota accordingly makes the world of difference. Staff are not overworked and feeling the stress of an understaffed team, and customers are not experiencing long queues and bad service. Opening up platforms for your staff to express their thoughts and feelings at the end of a shift creates a culture of honesty and safety in the workplace.
As Alex Reilley, Chairman of Loungers suggested, we need to make “commitments to change” – it is too easy to assume you lose people because of pay, and actually, it’s about letting people challenge you. That should be the real employee-value proposition.