Hospitality industry warns of reduced career opportunities for young people

One of the UK's leading procurement businesses has warned that younger people seeking careers in hospitality could pay the price for increased business costs. 

The stark warning 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.

Regency Purchasing Group, one of the UK’s leading procurement businesses, 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.

With the UK’s largest network of field-based procurement managers, Regency works with thousands of leisure businesses throughout the UK, including some of Britain’s biggest and best-known attractions, hundreds of golf clubs, plus pubs, restaurants, hotels, zoos, farm attractions and many others, typically delivering cost savings of between 8-14%.

Image: Regency Purchasing Group 

Regency has an in-depth understanding of the ongoing pressures facing leisure and hospitality businesses because they also own and operate several businesses in the sector, which means much of what they do is driven by their own first-hand experience.

As they are still coming to terms with the impact of Brexit, the Covid-19 pandemic, and the cost-of-living crisis, many of these businesses will struggle to be able to afford to take on the next generation of hospitality workers.

Image: Alex Demetriou, Founder of Regency Purchasing Group & CEO of Foodbuy UK&I

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 1 April, 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.”

To find out more about Regency Purchasing Group, visit www.regencypurchasing.co.uk.