Caterer Hei Report Q2 2012

QUARTERLY HOSPITALITYEMPLOYMENT INDEXQ2 2012

Brian Wisdom, Chief Executive of People 1st

Like the rest of the country, I have been inspired by the amazing men and women competing in the London 2012 Olympic and Paralympic Games, but perhaps even more impressive have been the fantastic volunteers and ambassadors that have dedicated their time to ensuring that we presented the best face possible to the rest of the world. The positive image of the UK that was projected during the Games should help ensure a strong legacy for British hospitality for years to come.

At a time when the UK has slipped back into recession, job advertisement levels in our sector have remained relatively unchanged. While this differs from the progressive increase seen during the same quarter in recent years, it indicates a level of stability absent in some other employment areas.

During the last quarter the restaurant industry has experienced similar recruitment levels to the hospitality sector as a whole. We are noticing, however, a number of trends that are paving the way for a new customer base and new approaches to recruitment.

16 to 34 year olds, or Generation Y, are becoming an important market for restaurateurs, and at the same time present a wealth of opportunities thanks to their position as both potential recruits and an emerging clientele. This edition of our report gives employers advice on how the restaurant industry can create a sustainable strategy that will withstand the test of time by making the most of the opportunities Generation Y provide.

Ian Burke, Director of Caterer.com

Generation Y forms a large focus in this report and from a positive viewpoint at that. Encouragingly, a recent survey indicated that 57 percent of 16-34 year olds would consider a career in hospitality.1 It is a delight to see the industry evolve and be considered as a great place to work with excellent prospects.

This group is also taking the restaurant market through the quieter periods and spending money eating out. Restaurants are the first sector to really recognise the opportunities this generation offers and are using new media and branding to target young people. The restaurant sector takes centre stage in this report and there are some interesting facts and key trends for businesses to benefit from.

Overall job advertisements are down by eight percent, while application competition remains healthy in most areas, although there has been a slight decrease in applicants for chef positions. As we all know this area has always struggled to recruit skilled chefs, but now more than ever is the time to attract, train and retain. We do not want to see a further shortage and must really appeal to chefs.

It is exciting to see businesses attracting fresh talent through great websites, social media and creating a personality behind the brand, and these efforts are placing the industry in a brighter light than ever.

We hope we will see this trend continue and the hospitality gross value added (GVA) rise over the coming quarters. With the legacy of the London 2012 Olympic and Paralympic Games, we could be set to see the next quarter impact positively on 2012.

Forewords

1 http://www.bighospitality.co.uk/Trends-Reports/Industry-bodies-hit-back-at-research-into-young-people-working-in-hospitality

REFERENCES

Hospitality Employment Index – Q2 2012

Caterer.com in partnership with People1st 2

Contents

Hospitality Employment Index (HEI)

Job advertisements

Job applications

Job competition

Focus on restaurants

Trends in the restaurant industry

About us

4

5

7

8

10

14

19



Caterer.com has teamed up with People 1st to produce quarterly Hospitality Employment Index (HEI) reports that supply the sector’s stakeholders with the most current data.

These reports provide a strong indication of the industry’s overall economic strength and allow for a more detailed analysis of trends across specific job roles and geographical areas so that we can see which industry sectors are growing.

Written by People 1st, these reports are based on recent data provided by Caterer.com, including the numbers of jobs advertised and applications received. Raw figures are then analysed and interpreted to provide valuable intelligence across a backdrop of broader labour market trends across the hospitality industry.

Hospitality Employment Index (HEI)



Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q3 Q4

20102009 2011 2012

New job ads per quarter

37,120

32,448

37,41134,061

43,00040,532

42,564

36,48340,186

45,71948,101

39,815 40,007

Q2

42,000

This is the most substantial fall from comparable quarters since the Hospitality Employment Index began.

Despite the London 2012 Olympic and Paralympic Games bringing a sense of positivity to the nation, the UK economy continues to experience troubled times. Provisional figures for the second quarter of 2012 suggest the UK economy has slipped back into recession with a 0.7 percent shrinkage in overall GDP compared with Q1 2012. However, there are still signs that hospitality is faring better than many other areas as the service industries experienced a smaller decrease of 0.1 percent.2

In light of this economic uncertainty, some employers across the hospitality industry are being understandably cautious about their company’s growth and the ‘wait and see’ approach that we saw in the Hospitality Employment Index report last quarter is continuing.

The graph above shows job advertisements placed in each quarter since 2009, and indicates that recruitment activity has become more consistent recently.

Between Q4 2010 and Q1 2011, for example, the number of advertisements posted increased by ten percent, followed by an additional 14 percent increase in Q2 2011. Between Q4 2011 and Q1 2012, however, levels remained relatively steady, with an increase of only five percent in Q2 2012.

Overall, despite recruitment activity having slowed a little after peaking in Q3 2011, job ads are still up compared to where they were in 2009 (by 30 percent) and 2010 (by four percent) in Q2. Industry feedback also suggests that brand/chain restaurants in particular continue to thrive and many companies continue to grow.

There were 42,000 new job ads posted between April and June 2012 - a drop of eight percent from the same quarter of the previous year.

OVERVIEW

Job advertisements

42,000Job ads in Q2 2012

8%Compared to Q2 of 2011

2 http://www.bbc.co.uk/news/10613201

REFERENCES



On another positive note, levels of overseas tourism reached near record levels this quarter, with visitor numbers up seven percent and spending up five percent in May 2012 compared to May 2011.3 It is likely that events such as the Queen’s Jubilee contributed to this substantially.

For some business areas, the London 2012 Olympic and Paralympic Games have not brought the increase in business levels that the country hoped. For example, recent figures for the retail industry suggest that August was the weakest month for sales growth so far this year.4

Within London’s hospitality industry, however, this has not always been the case. Despite some businesses getting off to a shaky start, 60 percent of pubs saw an upturn in trade during the second week of the London 2012 Olympic and Paralympic Games.5

As 2012 continues, it is likely that the weak Euro will continue to affect the tourist trade adversely, although it is hoped that the London 2012 Olympic and Paralympic Games will help provide a boost to the industry long after they themselves have finished.

Job advertisements

“We are advertising more positions due to our growth and our competitors are doing the same.”Marcus Weedon, Senior Recruitment Manager, Carluccio’s Limited

3 http://www.visitbritain.org/Images/May%202012%20IPS%20Memo%20with%20charts_tcm29-33614.pdf

REFERENCES

4 http://www.guardian.co.uk/business/2012/sep/04/uk-retail-sales-olympics-august

5 http://www.bighospitality.co.uk/Trends-Reports/Pubs-see-sales-turnaroundduring-London-2012-Olympics



Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q3 Q4

20102009 2011 2012

Job applications made per quarter

592,115516,652

557,639513,904

729,818

595,226

685,672

575,979

857,254810,106 836,812

714,970

933,200

Q2

796,500

This quarter the number of applications reached 796,500. OVERVIEW

Job applications

This represents a two percent fall compared to the same quarter last year, no doubt the result of the eight percent slowdown in recruitment figures.

Overall, however, applications in Q2 in 2012 are up by more than a third (34 percent) on Q2 2011 and over one half (54 percent) on 2010.

796,500Job applications in Q2 2012





Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q1 Q2 Q3 Q4

20102009 2011 2012

Competition for job rates per quarter

16.0 15.914.9 15.1

19.7

14.716.1 15.8

21.3

17.7 17.4 18.0

23.3

Q2

19.0

With job advertisements falling by eight percent but applications only falling by two percent, the level of competition for applicants across hospitality has remained high. This quarter the level stood at 19 applications for every job posted.

OVERVIEW

Job competition

For Q2 this is the highest level so far, up from 16 in 2009, 15 in 2010, and 18 in 2011.

In line with previous Hospitality Employment Index reports, competition levels are inextricably linked to unemployment figures. The latest data available indicates that there were 2.58 million unemployed people across the UK in the three months to May 2012. This equates to just over eight percent of the economically active population and is an increase of 0.4 percent on the same quarter last year.6

Competition levels are also stronger than those of comparable sectors. In retail, a sector that has much in common with hospitality, competition currently stands at 15 applications for each job. These figures also prove that more jobseekers are looking towards hospitality as an area for employment as opposed to other comparable sectors.

Furthermore, the sector appears to be particularly popular with young people. A recent survey indicated that over half (57 percent) of 16-24 year olds would consider a career in hospitality.7

19Applications per job


6 http://www.ons.gov.uk/ons/dcp171778_269309.pdf

7 http://www.bighospitality.co.uk/Trends-Reports/Industry-bodies-hit-back-at-research-into-young-people-working-in-hospitality

REFERENCES



For the career prospects 40%

Because it’s exciting 38%

For the social interaction

For the money 24%

29%

For the culture 21%

For the flexible hours 17%

For the close proximity to where I live

Because I want to work for a specific brand 8%

11%

Why jobseekers want to work in hospitality/catering

As can be seen from the graph above, according to a user-profile survey carried out by Caterer.com, career prospects and excitement about the industry were given as the main reasons people want to work in catering and hospitality.8

WHY JOBSEEKERS WANT TO WORK IN HOSPITALITY/CATERING

In summary, many people are attracted to hospitality both because of the excitement roles in the sector can offer and the career prospects available.

As young people feature heavily within this group, effort should therefore be made to retain and attract young talent within the sector. Websites such as uksp.co.uk can help with this as they offer a comprehensive guide to the sector, signposting users to the paths they can take to progress further within the sector.

Job competition

“The trick, of course, is to provide those who do make a start in our sector with such a positive experience that they will never want to leave.”Philippe Rossiter, Chief Executive, Institute of Hospitality

8 Caterer.com, User Profile Survey 2012

REFERENCES



Q2 2012

331,294 /25,103 / -8%

Q2 2011

347,103 / 30%27,347 / 14%

Q2 2010

23,884 / 25%

Q2 2009

231,20219.161

-5%

266,925 /15%

Number of jobs advertisedNumber of job applications Change from previous Q2Competitiveness

Summation of selected restaurant roles

12.7 / 14%

11.2 / -7%

12.1

13.2 / 4%


Restaurants form a major component of the hospitality sector. Over the last quarter, the restaurant industry has exhibited similar trends to the ones seen across hospitality as a whole.

OVERVIEW

25,103Restaurant-related posts in Q2 2012

8%Adverts compared to Q2 2011

The number of advertisements across a selection of restaurant-based roles fell eight percent in Q2 2012 when compared to the same quarter in 2011.

Applications fell five percent from 347,100 to 331,300 in the same period, meaning competition levels have increased only slightly from 12.7 in 2011 to 13.2 in 2012.

5%Applications compared to Q2 2011



Restaurant management

7,126 / -8%

Catering management

920 / -45%

Food and beverage management

904 / -1%

Kitchen manager

537 / -8%

90,200 / -1%

14,438 / -43%

2,691 / -15%

18,502 / -2%

Number of jobs advertisedNumber of job applications Change from Q2 2011 - Q2 2012

Summation of managerial roles


MANAGERIAL ROLES

The number of advertisements posted for managerial roles in the restaurant industry has fallen in each area. Catering management advertisements in particular saw a fall of 45 percent from the same quarter of the previous year.

In line with this fall in job advertisements, the proportion of applications has also fallen in each area. Throughout the recession many businesses have found staff retention improving considerably. For some, this has made it less necessary to continue recruiting in management.

125,830Total number of managerial applications


“Obviously this is good for business as we would not have to train further people, but invest our time in delivering the tools that they need to succeed in their roles.”Marcus Weedon, Senior Recruitment Manager, Carluccio’s Limited



Waiting staff

82,145 / -1%1,362 / -4%

Catering staff

30,749 / 4%767 / -9%

Sommelier

1,390 / -34%118 / -49%


Summation of non-managerial roles


NON-MANAGERIAL ROLES

Job advertisements have also fallen in non-managerial roles, illustrating some business’ reluctance to expand staffing levels in such positions given the economic climate. Competition levels for waiting staff are extremely high. The number of advertisements for sommeliers has dropped by almost half (49 percent). This could be related to the economic climate, which has seen many people move away from the fine dining experience to more casual (and cheaper) alternatives.

114,284Total number of

non-managerial applications




Chef de partie

25,657 /4,965 / 0%

Sous chef

22,043 / 7%3,827 / 2%

Head chef

2,736 / -8%

Chefs

18,229 / -22%1,841 / -18%

7%

25,251 / -3%


Summation of chef roles


CHEF ROLES

The picture for chefs is more varied than other restaurant-based roles. Chef de partie advertisements have remained the same; sous chefs have increased slightly, while advertisements for chefs and head chefs have fallen.

Unusually, the number of applications for chefs has fallen more than the number of advertisements, which is why we are seeing a decrease in competition levels in this area. Skills shortages amongst chefs is one of the most acutely felt problems across the restaurant industry, so it is hoped that this is not the beginning of a further decline in the supply of skilled chefs across the country.

91,180Total number of chef applications




SUMMARY

Now more than ever, consumers are being attracted to places that are tuned into their lifestyle in terms of ambience and, of course, budget. This means that competition for customers across restaurants has become increasingly fierce.

Spurred on by attractive offers from the industry, recent research has indicated that the average UK consumer is going out for food and drink on 19.8 separate occasions each month. This is actually 2.3 more times per month than the same time last year and bodes well for the restaurant industry as a whole.9

There is, however, considerable variation across consumer groups, with 18-34 year olds leading the way in this market. Generation Y (18-34 year olds) goes out twice as often as Generation X (35-54 year olds), and three times as often as Baby Boomers (aged 55 and over).


While it is undoubtedly true that many people have been cutting back on their expenses, the fact remains that people continue to spend money.

The research suggests that, overall, Generation Y appears to be more carefree than their older counterparts. Furthermore, their tastes and preferences are likely to become increasingly influential in future as their spending power increases. Generation Z will also become more important to the market, following Generation Y’s lead.

To keep pace with their competitors and to continue to attract customers, the industry should pay attention to such trends and make preparations to meet these expectations in the coming years.

Industry commentators have noted a number of additional trends for the coming year, many of which reflect the increasing influence of Generation Y.10 Most notably, three key trends for 2013 are a move towards increasing informality, a greater emphasis on speed of service and putting the customer in control, and the rising influence of mobile technology, including apps.

9 Deloitte, 2012, ‘Taste of the nation: One year on … a social lifestyle’

10http://lostincatering.com/lostincatering/restaurant_trends_2013.html

REFERENCES




INCREASED INFORMALITY

This consists of a much more relaxed atmosphere, possibly influenced by the rise of the gastropub where dining out is less of an occasion than a traditional restaurant, but the food is of a high standard.

This surge towards informal dining can be linked to the long tables introduced in Wagamama restaurants 20 years ago. There is a much more social aspect to such restaurants, with the design promoting greater interaction between patrons and a very informal atmosphere. Along with this trend, fixed dining hours are becoming less recognised by consumers, with later dining far more commonplace.

In terms of recruitment, some businesses are also taking a less formal approach and applicants seem to be embracing this; one recent survey indicated that two thirds of candidates welcome obscure lines of questioning as part of their job interview, and 66 percent felt positive about their ability to respond to a weird question (such as ‘how would you get an elephant into a fridge?’).11

Far from the tradition of fine dining, many people now prefer a less formal dining experience.

Fast food has long been a part of the UK dining out market, but its ubiquity is now apparent.

PUTTING THE CUSTOMER IN CONTROL

Almost every high street in the country is home to at least one well-known quick service brand; for example, McDonalds alone has around 1,200 restaurants across the UK.

Generation Y is familiar with fast food chains, so it will come as little surprise that they expect comparably quick levels of service in other casual dining establishments. Having said that, while operators should be prepared to offer a speedy service, they must also be aware that guest preferences are more diverse than ever before, and consumers will expect to be able to take as much time as they like over their dining experience.

Similarly, consumers are using technology more to make reservations at short notice. The Peach Report states that one well-known restaurant chain gets 50 percent of its online bookings for later the same day.12

11www.hrmagazine.co.uk/hro/news/1074368/how-elephant-fridge-recruiter-advises-employers-weird-interview-questions-win-war-talent

12Peach Report, ‘How smartphones are replacing the walk-in diner’, www.peach-report.com/Trends/1440949/how_smartphones_are_replacing_the_walkin_diner.html

REFERENCES




Restaurants must ensure they are properly accommodating the diverse nature of today’s diner. However, this trend should also continue into recruitment processes to appeal to people that would thrive working in such environments. In short, sourcing candidates should be cost efficient, simple and effective in fulfilling the restaurant’s business needs.

One of the defining characteristics of Generation Y is their use of technology, with online bookings arguably the most obvious manifestation.

THE INFLUENCE OF APPS

According to the European Dining Index from Livebookings, online restaurant booking in the UK more than doubled in the first quarter of 2012 compared to 2011. Furthermore, bookings made via mobile phones had trebled.

The report also pointed out that nearly a third of restaurants in the UK do not have a website, and the authors estimate that this could result in an approximately £31,000 revenue loss each year.13

Of course, online bookings are only part of the story. Through mobile phone apps, users can look at menus, check deals or offers at nearby restaurants, read recommendations, and express their loyalty to a brand by ‘checking-in’ at a particular location. Clearly this offers huge opportunities for businesses to build their brand awareness and attract new customers.

Such trends are set to grow and develop further in coming years, affecting the recruitment process itself; there are already a wealth of apps available that make it easier for jobseekers to search and apply for roles. At the same time, the increase in mobile-enabled sites means recruiters can post jobs on the go.

Caterer.com’s recent user profile survey showed that 46 percent of respondents have used their mobile phones to apply for jobs and 60 percent have used a tablet. Moreover, 82 percent of respondents said they will make more use of their mobile phone or tablet in the future to search for jobs. This is a growing area and one that businesses should ensure they prepare for appropriately.

13 http://www.livebookings.co.uk/News/Hidden_restaurants_A_third_still_have_no_website_according_to_Livebookings_European_Dining_Index

REFERENCES



15-19

20-24

25-29

30-34

Age distribution of workforce (restaurants compared to whole economy)

35-39

40-44

45-49

50-54

55-59

60 and over

0% 5% 10% 15% 20%

RestaurantsWhole economy

Cooks 16%Managers and owners 23%

Chefs

Kitchen and catering assistants 46%

37%

Waiting staff 77%

Core occupations within restaurants (proportion of workforce aged under 30)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


THE UNIQUE ADVANTAGE OF RESTAURANTS

As Generation Y are socially driving the dining out experience, it appears the restaurant industry is perfectly positioned to capitalise on these trends.

The industry has an advantage as its workforce is largely made up of young people. As evidenced in the graph above, more than half (53 percent) of the industry’s workforce is under 30, compared with less than a quarter (23 percent) across the economy as a whole.14

Looking at the key job roles within restaurants, more than three quarters of waiting staff are under the age of 30.

In appealing to the emerging and developing consumer markets of Generation Y and Generation Z, restaurants therefore have a workforce that can fully relate to their clientele.

For this reason, and as prescribed by so many business development programmes, it is in the interest of restaurateurs to seek their staff’s involvement in the business, using their insight into the customer base to finely tune the service they offer.

14 People 1st analysis of the Labour Force Survey 2011, Office for National Statistics

REFERENCES



SUMMARY

The restaurant industry in particular has seen a multitude of changes in recent times but, despite this, many operators are continuing to thrive. Much of this is down to addressing the changing needs and demands of their clientele and, with recent research indicating Generation Y are the largest market for eating out, operators need to adapt to what appeals to them in order to maintain ongoing success.

In this quarter’s report we have highlighted a number of key trends that characterise Generation Y’s expectations. For example, restaurateurs would do well to consider Generation Y’s preference for less formal dining experiences, and the ubiquity of social media and e-communications among them to attract more custom and aid their recruitment procedures.

A young workforce already exists within the restaurant industry, so operators have a key demographic within their workforce to help capitalise on emerging trends.


This quarter’s Hospitality Employment Index suggests that recruitment levels have slowed down recently, but that the sector remains in good shape relative to comparable industries.



CATERER.COM IS THE UK’S LEADING HOSPITALITY RECRUITMENT WEBSITE

Since its launch in 2001, Caterer.com has pioneered online recruitment for the hospitality industry. Working with hotels, restaurants, pubs, bars and food service companies across the UK, it has developed a strong reputation as a leader in its field, helping both small and large businesses to improve their recruitment and retention processes.

If you are interested in finding out more about how Caterer.com can help you and your business, please either email [email protected], or call 0845 877 0064 to speak to one of their experts.

To register to receive Hospitality Employment Index updates, visit www.caterer.com/HEI

PEOPLE 1ST (WWW.PEOPLE1ST.CO.UK) IS THE SECTOR SKILLS COUNCIL FOR HOSPITALITY, PASSENGER TRANSPORT, TRAVELAND TOURISM

People 1st is a government recognised, industry-focused body established to support the development of skills and training within the sector. It works to transform skills in the sector and is committed to ensuring that public funds support the industry to develop only those qualifications and programmes that meet the needs of employers.

People 1st regularly conducts surveys for other organisations such as trade associations and public sector agencies. If you would like to use its expertise or commission it to conduct surveys on your behalf please contact Alastair Galbraith at People 1st ([email protected] or 01895 817 018) to discuss your requirements.

To download the latest Hospitality Employment Index, visit www.people1st.co.uk/HEI

Technical notesCaterer.com data is based on job ads displayed on the website. Ads are made by recruiters placing an advertisement within one of 36 job categories and 12 UK regions.

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Caterer Hei Report Q2 2012