Human One at the forefront of hospitality industry’s response to new immigration plans
The UK government’s plans for a new points based immigration system which will enter force after 2020 have caused shockwaves in a number of industries, but little more so than in the hospitality sector.
At a time when the mindsets of both government and industry on the issue are veering in different directions, one London based hospitality recruitment organisation is finding itself at the forefront of industry’s response.
Human One is a specialist hospitality recruitment company. Of its over 1600 staff, 41 per cent are Romanian nationals and 17 per cent are from Bulgaria. Both are EU nations, meaning the ability for citizens of these countries to enter the UK will be directly affected by the impending changes.
Handicapping the sector with labour shortages, according to Human One’s managing director Amber Blount, will inevitably cause issues for the British economy in the long-term.
Referring to statistics from trade association UKHospitality, Blount highlighted that the hospitality industry is the UK’s third-largest employer generating one in six new jobs.
Furthermore, nine per cent of the total number of jobs in the UK are in the hospitality sector, equating to 3.2 million individuals directly employed in the industry. A further 2.8 million are indirectly employed by it.
Financially, it also generates £130 million per annum in turnover, which is more than the automotive, pharmaceutical and aeronautics industries combined. Direct gross tax receipts paid out by the industry also provide a further £39 billion a year for the Treasury.
It begs the question, therefore, as to just how restrictive the new immigration system will be and how heavily it will impact industry operators such as Human One.
The points based system, as laid out by ITV News, essentially works as a 70-point threshold that an applicant must reach to be successful in gaining a visa.
Minimal non-traceable criteria that applicants must meet are speaking English at a required level [worth 10 points], having received a job offer from an approved sponsor [20 points], and having a job offer at an appropriate skills level [20 points].
Tradeable criteria includes more points being awarded for larger salaries, better qualifications and if the role in question is in an industry with labour shortages.
Given that large parts of Human One’s workforce are dominated by foreign nationals who will not be earning high salaries, labour shortages could well be likely. The system essentially serves to set a minimum salary threshold above what a typical worker in the sector would earn, and does not deem the role as ‘skilled’.
Indeed, as the Guardian reports, even bodies such as the Confederation of British Industry have raised concerns about the impact of the new immigration system in labour, echoing Human One’s concerns. The care sector and farming industry has also followed suit in raising the alarm.
But, what could the solution for industry be?
Should the hospitality sector eventually be deemed an industry with labour shortages, any foreign national hoping to enter the country for work in the sector will be handed 20 points under the new system. However, simply waiting for this to happen would cause the sector numerous recruitment problems in the interim which would limit is operational ability. This, therefore, is hardly a solution for the industry to play to the system and continue to thrive.
Another potential solution is the possibility of industry operators raising salaries in order to help foreign applicants reach the 70-point threshold.
As the system currently stands, heading into a job with a salary of £20,480-£23,039 would be worth zero points. Meanwhile, a salary of £23,040-£25,599 is worth 10 points, with 20 points being awarded for a salary of over £25,600.
If an applicant has a PhD in a subject relevant to their role, they will receive a further 10 points. 20 points are awarded if the PhD relevant to the role is in a STEM subject.
If hospitality firms were to raise salaries to the threshold of £25,600 per year for applicants to earn 20 points, this would mean upping wages to £12.31 an hour. The National Minimum Wage for over-25s as of April 1 2020 will be £8.21 per hour. The National Living Wage for the same age group will be £8.72. This will no doubt have an adverse impact on industry operators financially by vastly increasing their outgoing costs.
Referring to the Guardian, Blount pointed out that home secretary Priti Patel’s hope for the new system is that it will entice business leaders to move away from seeking foreign labour and instead look to cash in on the eight million Brits be between the ages of 16 and 64 who are currently deemed “economically inactive”.
Patel believes that these individuals could be the answer to industries suffering from labour shortage woes once the new system enters force.
These “economically inactive” individuals mainly consist of students, individuals in long-term unemployment, retired people, and those with caring responsibilities.
However, the likelihood of these individuals providing the answer has also been called into question by the sector.
Human One has gathered statistics of its own registered workforce, which revealed that of their 1600 registered staff since its foundation, a mere 103 are British, representing six per cent of their total workforce.
More worryingly so, just 34.33 per cent of that British pool of workers remain active today, equating to just 34 individuals. 47 have since left, which suggests a retention issue for British workers in the industry, while 22 were deemed unsuitable for the role.
Understandably, therefore, the sector does not align with the home secretary’s views that turning away from foreign labour and looking to recruit “economically inactive” British workers provides a tangible answer.
All in all, these differing perspectives suggest a major discord between industry leaders and the government, and the latter would do very well to heed the concerns of the industry before pressing on with its plans.