Staffing shortages are throwing a pall over the influx of overseas visitors, as restaurants and hotels close rooms, cut menus and limit occupancy to cope.
Auckland chef Nic Watt is taking part in a Sunday job fair for tenants at retail and hospitality hub Ponsonby Central, hoping to find up to a dozen staff for his Inca restaurant, so it can get back to serving daily lunches and a full menu.
Watt reckons he could easily absorb 30 more workers across his four Auckland eateries, and is anxiously awaiting the arrival of three skilled staff from Indonesia and Bahrain.
But there’s a warning that simply flooding the market with migrants to solve current shortages would set back efforts to reshape employment practices in tourism where a recent survey found almost 60% of job advertisements drew fewer than five applicants.
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A snapshot of the industry showed that in the June 2021 quarter, the estimated median hourly income for tourism was $21.58, which was $6.18 less than the median hourly income across all sectors, resulting in a 22% pay gap.
Issues such as low pay, a significant number of employers flouting labour laws, small businesses lacking management skills, and gender inequities leading to more women losing tourism jobs through the pandemic, are outlined in a draft plan to attack the tourism’s long-standing workforce woes.
None of that surprises senior lecturer at AUT’s school of hospitality and tourism David Williamson whose research is widely quoted in He Mahere Tiaki Kaimahi, the draft Better Work Action Plan released on Wednesday by Tourism Minister Stuart Nash.
Williamson says intense demand meant a lot of pay parity knocked out of the sector after the Employment Contracts Act was starting to return, and simply “turning the cheap migrant labour tap back on full” would put more downward pressure on wages and conditions.
The action plan proposed by a group of Government agencies, unions, Māori and industry representative suggests a tourism and hospitality accord that would set workforce standards, including wages, and endorse good employers.
But first up more basic changes are needed, such as better resourcing the Labour Inspectorate, so it can clean up the significant minority of “rat bag” employers breaking the law, Williamson says.
Later this year he is due to repeat his 2021 study Voices from The Front Line which surveyed 400 hospitality employees.
It found about 20% of workers did not receive holiday pay, were not paid or given time in lieu for working statutory holidays, and did not get rest breaks.
About 80% had not received any training in their current or previous roles.
Both Tourism Industry Aotearoa and the Restaurant Association submitted against the Government’s proposed Fair Pay Agreements Bill, arguing compulsory FPAs were inflexible and would place further compliance pressures on employers.
Williamson says this sort of resistance is outdated and minimum standards are urgently needed.
“You have to be realistic and say ‘your labour market is in crisis, and you can’t attract young people to your industry because your pay and conditions are not good enough’.”
Horwath HTL’s latest report on the hotel industry predicts staff shortages will become even more acute and are likely to last some time, with five more former MIQ hotels and five new hotels expected to open before the end of the year.
“[For] New Zealand to maintain its reputation with overseas visitors, developing the right workforce has never been more critical than now.”
Tourism Industry Aotearoa chief executive Rebecca Ingram points out that authors of the draft work plan urged caution over the accuracy of the $6.18 median hourly pay gap because of the pandemic’s impact on tourism data.
She says 70% of tourism businesses surveyed recently were paying at least the living wage ($23.65), and a third were offering bonus and incentive payments.
Watt says pay rates have moved considerably in the past two years.
“It’s supply and demand, there’s not the supply, and staff are quite simply going somewhere else for another $1 or $2 an hour.”
He pays a finder’s fee to staff who help secure new recruits – “I’ve paid one staff member $1500 over the past year because she got three people for me” – and he pays a $2000 bonus for 12 months continuous service to retain skilled employees.
The Go with Tourism website was set up to match displaced workers with employers and the median wage for 94 jobs currently advertised is $25 per hour.
The lowest paid position was $21.84 for a kitchen hand in Auckland, and the highest was a $75,000-plus salary for a Queenstown chef.
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