New jobs in UK hospitality sector 'non-existent'

Paul Gilley says he has never seen so few new jobs in the UK hospitality sector - across restaurants, bars and hotels.

Recruitment is bad overall but in hospitality it is "non-existent", says the boss of London-based recruitment firm PJ Search & Selection.

Mr Gilley has run his business for 20 years, specialising in the hospitality sector. Back in March, he says that everything stopped overnight.

"Contracts were being cancelled, all permanent vacancies were drying up and within a week we had nothing," he says.

Despite England being set to come out of the current lockdown on 2 December, returning to a tier-based system and with Christmas fast approaching, Mr Gilley does not see things improving until well into 2021.

"The hospitality sector is going to try its damnedest to have a good Christmas, but with social distancing rules in place you can have only less than half the normal number of customers, so extra staff just aren't needed," he says.

"Places are opening their doors not to make money, but to lose less."

Recruitment agencies are a very good barometer of a country's economy. And across the UK they have seen business dry up, as unemployment has risen due to Covid and the subsequent lockdowns and tier restrictions.

The latest official figures show that the UK unemployment rate rose to 4.8% in the three months to September, up from 4.1% in the previous quarter. And the unemployment rate among 16 to 24-year-olds, who make up much of the staff across restaurants, bars and hotels, is now 14.6%, also according to official data. Overall UK unemployment is now expected to reach 7.5% next year.

This bleak situation also applies to retail, and is replicated globally, says Ann Swain, the chief executive of APSCo, an international trade body that represents the recruitment sector.

"In March, education recruitment fell off a cliff because schools were closed down, and other markets followed with permanent recruitment dying for weeks or longer for the likes of retail and hospitality," she says.

But Ms Swain says recruitment has since picked up in areas such as distribution, healthcare and the pharmaceutical sector, where firms have been looking for Covid vaccines.

In fact, some entrepreneurs are launching new recruitment firms to capitalise on these trends. One such is UK industry veteran David Spencer-Percival, who has started Life Sciences People, focusing on the pharmaceutical and life sciences sector.

"The sector is seeing record investment," he says. "If you are already in a downturn or recession then there's everything to play for if you time it right, as the economy can only move one way - up."

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Looking at how the UK's recruiters have fared this year compared with other countries, Ms Swain says German firms have had an easier time, because Germany has had fewer coronavirus cases.

Meanwhile in Australia, the situation has varied from city to city, she says. The stricter the Covid restrictions, the more unwilling firms have been to recruit. As a result, recruiters in Melbourne were badly affected while the situation was much better for those in Sydney.

"In Singapore and South East Asia it has been a lot of 'on-off', whereby everything goes back to some normality, then closes down, therefore permanent recruitment has been restricted," says Ms Swain.

Kathryn Woof, managing director of 33 Talent, a Singapore recruitment firm for the public relations and marketing sectors, says she might have had to close her business if it had only focused on recruitment.

In March "we went from working on a million dollars' worth of jobs to zero in three weeks," she says.

"Even though our sector was not as affected as hospitality, a lot of our clients didn't have the luxury of proceeding as if nothing was wrong. They had to freeze their headcount, reduce wages and shorten work weeks because they were assuming the worst."

Ms Woof says her business was already doing some human resources consulting and training work, so pivoted her team to focus on those two areas instead.

As a result of gaining business in these areas, as well as moving to a four-day week, she has been able to keep all 12 of her staff employed.

While the recruitment side of the business is now slowly recovering, it is only working on about 20% of the number of jobs compared with pre-Covid levels, she says.

The bounce back for recruitment firms in other parts of the world has been better. This has been the case for MatcHR in Ukraine, which helps western firms employ remote tech staff. Its clients include Booking.com, TikTok, Stripe and Merck.

"In March the whole world stopped, so in a matter of two to three weeks we lost 70% of our turnover. We had to fire 60% of our staff, and we were still bleeding money," says MatcHR co-founder Adriaan Kolff.

A deal with TikTok signed in February kept the business going, he says. Then in recent months a growing number of US firms have been wanting to hire Ukrainian tech workers.

Mr Kolff say this has helped MatcHR return to making 90% of its pre-pandemic earnings and it has hired back some of the staff it had made redundant.

While MatcHR is one of the lucky ones, many recruitment firms are pinning their hopes on the roll-out and success of the Covid-19 vaccines.

Until then, Paul Gilley in London says he is more focused on an e-commerce business he set up earlier this year, to bring in a much-needed income.

APSCo's Ann Swain says: "The global recruitment market is always a bellwether for the economy because the minute organisations or governments feel unease they stop recruiting."