Restaurant sector to be hit the hardest with proposed reduction to workers' salary threshold

Meanwhile, a points-based immigration policy could dramatically affect access to labour.

The proposed reduction to the salary threshold of overseas workers could be posing a threat to the overall hospitality industry as 42% of workers come from the European Union and 11% originate from other parts of the world, according to latest analysis from Fourth.

With 60% of its current front-of-house staff coming from abroad (49% from EU and 11% from other parts of the world), the restaurant sector will be hit the hardest, the hospitality software provider noted.

The said proposal seeks to cut the salary threshold from £30,000 to £25,600.

The sector’s back-of-house operations will also be affected as 75% of staff are from abroad (61% from EU and 14% from the rest of the world).

Similarly, the QSR sector will also be hit with having over six in ten overseas workers (half coming from the EU and 11% from other parts of the globe).

Even pubs and hotels, which have a lower reliance on foreign workers, will bear significant impact of the salary threshold cut, having 33% and 40% of workers hailing from abroad, respectively.

“This move will undoubtedly add further fuel to the fire in the industry’s ongoing fight to attract and retain the best employees,” VP of Analytics Mike Shipley said in a statement.

[T]he new legislation doesn’t take into consideration the specific nuances of the hospitality industry, such as tips, which are not included in the calculations for the new thresholds, he added.

Based on nationality, Fourth highlighted that the most affected overseas workers are coming from Poland (11%), followed by those from Italy (7%), Portugal (6%), Romania (5%) and Spain (4%).

Immigration policy seen to “dramatically affect” labour access
Meanwhile, CGA group chief executive Phil Tate raised their concern over the government’s proposed points-based immigration policy, which it said could “dramatically affect” access to labour, and in turn would “hurt investment, weaken the high street and ultimately reduce the pleasure of eating and drinking out.”

On the firm’s latest Business Leaders Survey, which was conducted before the proposals were made, it was revealed that two in five (41%) of 174 business heads polled claimed a points-based system for immigration would have a negative impact on the industry.

When setting a criteria for potential workers, labour shortage (77%) was seen as a primary consideration, followed by language skills (56%), experience overseas (40%) and offers of employment (38%).

To ease pressure on labour shortages, two-thirds (66%) of leaders are in support of the suggestion to make a temporary visa last for either 24 or 36 months, compared to the average length of workers tenure within the industry of 14 months.