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$10,000 bonuses: Inside the hospitality worker crisis

Australian currency and workers in a cafe.
The Austraian hospitality industry is desparate for workers and employers are willing to offer some incredible perks to obtain staff. (Source: Getty/Barcats)

Hospitality workers have been through two tough years. Lockdowns put thousands out of work and uncertainty about the pandemic’s end made working in the industry insecure.

But now, as the country reopens, those with skills in the industry are some of the most in-demand workers in the country.

Almost two years of border closures prevented skilled workers and university students from entering the country, which in turn has led to a huge shortage of the workers usually relied upon to fill these hospitality roles.

Job ads for the hospitality and tourism sector saw an increase of over 76 per cent this year, according to SEEK data.

“With such phenomenal demand for talent, the number of applications per job ad were no match and we saw a continued decline in applications from May to November,” SEEK managing director for Australia and New Zealand Kendra Banks said.

“We expect demand for candidates to remain high as businesses attempt to secure themselves some long sought-after new talent in 2022.”

This has led to employers offering major incentives to find workers, but also could be the catalyst to significant change in an industry that has primarily seen a lot of staff change over.

Chart comparing jobs ads posted on SEEK and the amount of applications per role.
(Source: SEEK)

Attractive incentives

Hospitality venues around Australia are boosting the pay packets of thousands of workers in a bid to attract and retain workers.

It is estimated that around one in 10 positions in the hospitality and tourism market were being filled by temporary visa holders before the pandemic hit.

Jeffrey Williams, CEO and founder of Barcats, said workers were being paid hundreds, and, in some cases, thousands of dollars more because of the severe skills shortage in the industry.

“The shortage is so dire there is considerable poaching of staff within the industry,” he said.

“63 per cent of venues around Australia report having to pay staff significantly more than usual to attract or retain them.

Jeffrey Williams, CEO and founder of Barcats
Jeffrey Williams is the CEO and founder of Barcats. (Source: Provided)

Since venues were able to start opening again, Williams said the Barcats, an online jobs platform for hospitality, had seen a 400 per cent increase in listings on its site.

Williams said the pay rate for hospitality workers has doubled in some cases.

“A qualified bartender who, before COVID, would earn about $26 an hour may now earn $50 an hour,” he said.

“Likewise, some qualified kitchen hands have seen their hourly wage increase from $26 an hour pre-pandemic to $42 now.”

Williams said he had also heard of a chef working in the Central Coast, in NSW, demanding $35,000 a year more to do the same job.

“A chef in a Victorian restaurant recently walked out mid-shift to go to another job after being offered a significant pay rise,” he added.

The owner of the popular Woollahra Hotel in Sydney, Alistair Campbell, said he had to pay a significant spotters fee to find staff - $1,500 for full time staff and $750 for casuals.

"Some people are offering bar managers a $10,000 sign on bonus; others give people a $500 tab if they refer staff to the venue,” Campbell said.

SYDNEY, AUSTRALIA - SEPTEMBER 27:  Swans flags are seen on the Woollahra Hotel during AFL Grand Final Week in Sydney, on September 27, 2012 in Sydney, Australia.  (Photo by Ryan Pierse/Getty Images)
The Woollahra Hotel in Sydney. (Source: Getty)

Retaining staff is key

Brad Jenkins. head of leisure at Lewis Land Group, owner of the Fiddler Hotel and Camden Valley Inn, told Yahoo Finance he recognised there was going to be an issue with staff shortages when the borders shut last year.

“We brought in sign-on bonuses for the chefs back in February, and we offered those bonuses to the chefs who were already with us as well,” Jenkins said.

“We did a really good push at the start so when venues were able to open back up most of those chefs came back to us.”

As well as sign-on bonuses for chefs, Jenkins said they took the time to talk with their staff and really understand what was important to them.

“We recognised for a lot of our staff that having a car was really important to them, so we launched a giveaway,” he said.

“Every time someone works a shift they get an entry, and we’re doing the draw just after Australia day.”

Brad Jenkins. head of leisure at Lewis Land Group and the bar at The Fiddler Hotel.
Brad Jenkins is the head of leisure at Lewis Land Group. (Source: LLG)

Jenkins said the idea came out of speaking with the staff that they had and understanding their needs, rather than just focusing on money.

“We spoke with everyone in the workforce to ask them ‘do you like the work that you’re doing, the shifts that you’re doing’," he said.

"It’s important to know your staff on an individual basis and what makes them happy to work for us."

The issue, Jenkins said, is that when you lose one staff member you typically need to hire three to replace them.

“If you’ve managed to retain five chefs, but you usually have eight, then you have five people working an eight person job,” he said.

“So, everyone is overworked and frustrated, and that’s why they leave. So, retention is the most important thing.”

‘If you can’t handle the heat…’

As Jenkins said, when people are overworked they’re typically not happy in their job and seek to find another.

And with rising staff shortages, the push for employers to create a better working environment has never been more important.

Associate professor Richard Robinson from the University of Queensland Business School told Yahoo Finance that the current situation has pushed the industry to improve.

“The hospitality industry is dominated by part-time and casual contracts. So, when the lockdowns hit these workers had absolutely no protection,” Robinson said.

“They had to sustain themselves and they went to other industries to secure work. And those workers are unlikely to come back, frankly, because the conditions they're experiencing in other industries are probably better.”

Kitchen staff preparing organic greens for dinner service on the line in restaurant kitchen
Rising staff shortages are pushing more people out of the industry as they feel overworked. (Source: Getty)

Robinson said that more policy is needed to help propel the hospitality industry to compete in the wider working environment.

“Flexibility is the word that's often used to hallmark hospitality, but that flexibility often works in favour of the employer, but not the employee,” he said.

“Don't get me wrong, there are gold standard employers out there and I’m not painting them all with the same brush. But I think overall the public's perception of the industry, and its working conditions are quite low.”

Robinson said that while incentives may help employers attract workers for the moment, broader work must be done.

“The warm afterglow of pay increases wears off pretty quickly."

“And it's actually those intrinsic rewards and the way that people are treated and dignified on the job that will be more likely to keep them in an occupation or industry,” Robinson said.

Robinson said that security and safety is incredibly important to people and hospitality venues should consider changing their mindset.

“Even if you work part time, we need to abandon this mindset where casual, zero contract and precarious work is the norm in the industry, rather than the exception,” he said.

“You can offer people stability of work, while also recognising that hospitality is one of those industries that's highly seasonal.”

Robinson said that creating a positive working experience, even for those who are only in the industry for a short time, is an important piece of the puzzle to improving the industry overall.

“We need to create a better experience for those people so that they speak positively about their time in the industry, even if they don't intend staying in for a long time,” he said.

“Then their younger brothers, sisters or children might be inclined to take up opportunities in hospitality down the track, and some of them might see the enormous potential career paths that are open.”

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