HOW CAN it be difficult for hotels to hire staff when the unemployment rate is 13 per cent and youth unemployment is as high as 29 per cent? Is it possible to experience acute labour shortages in an industry that does not require highly skilled workers at a time of high unemployment?
This is not the only paradox. Apparently, the number of workers employed in the hospitality industry increased by 13 per cent to an all-time high of 33,192 in 2016, while at the same time the number of unemployed hospitality industry workers rose by 11 per cent. This would suggest that hotels and restaurants are hiring younger workers and foreigners instead of staff that belong to unions and demand wages based on collective agreements.
Union representatives argue that since 2013 hotels have been hiring workers on personal contracts which cost less than hiring them on collective agreement payment and terms. Hoteliers and restaurateurs have seized the opportunity provided by the crisis to lower their labour costs, which they had always claimed were too high a percentage of their total costs, rendering hotels uncompetitive. They did not take into consideration union acceptance of across-the-board pay cuts.
In a way both sides have a strong case. Hoteliers have tried to keep labour costs low so that they remain competitive while unions have been seeking higher pay for members at a time when the hospitality industry is booming, with record numbers of visitors and unprecedentedly high occupancy rates at hotels for the second year running. While hoteliers may be correct in trying to keep wages down, because the current boom might not last, unions also have a point in arguing that hospitality workers should benefit when the tourism industry is thriving, especially as they accepted pay cuts during the recession.
Perhaps hoteliers have decided they want to build their cash reserves during the good times, but hiring workers on contracts might prove to be a short-sighted approach as it could lead to high staff turnover, which is not very good for businesses whose workers constantly have to interact with the customers. Collective agreements might make no sense when imposing the same wages across an industry, but if they are custom-made for a business, they offer stability, continuity and a degree of security to workers that boosts loyalty.
Apart from unions, the efforts to keep wages down are now encountering another foe – the market. According to a report in this paper on Tuesday, experienced hospitality workers are leaving one hotel to work for another offering higher wages. This is inevitable when there are labour shortages. The next step would be for hotels to offer higher wages for new recruits, because they cannot be understaffed during the peak months. The market will resolve the problem of low wages.