A new survey by the Restaurant Association of New Zealand reveals the challenges set to rock the industry this year. The Restaurant Association, an industry body that represents more than 2200 hospitality businesses nationwide, asked its members to weigh in on what they think will be the biggest challenges facing the industry in 2018.
Lack of skilled employees was ranked as the number one challenge for hospitality business owners.
“Skilled migrants play a crucial role in supporting the shortfall of workers in the hospitality industry, so it is important that the industry can continue to employ migrant workers where no suitable New Zealand candidates can be found,” said Marisa Bidois, Chief Executive of the Restaurant Association.
Bidois met with the Immigration Minister earlier this year where he gave his assurance that government will continue to work with businesses to ensure they can access the skills needed to remain viable in business. Exacerbating the challenges in recruitment is the ANZSCO database, the government occupation classification portal for visa applications, with which 65 percent of respondents had experienced problems using.
With increases to minimum hourly rates, unsurprisingly managing wage costs came in second place with 41 percent of respondents citing this as a crucial issue for the industry. Managing government legislation also featured highly with 40 percent of respondents selecting it as a key challenge.
Bidois said that the sector is facing pressure from all sides. “With changes to employment law including the reversal of rules around 90 day trial periods and more prescriptive rest and meal breaks, hospitality owners are having to be increasingly creative to keep their businesses afloat.
“In addition to this, the Government plans to lift the minimum wage by around six per cent per annum over the next three years which will leave New Zealand with the highest minimum wage relative to average income in the OECD.
“Many other industries have the option to switch to automation, however with hospitality being a more analogue and personal operation, automation is not currently a viable option. Our industry relies heavily on labour and our survey indicates that many will simply not be able to afford the increased costs. The obvious losers in this are the customers who will ultimately pay the price for increased prices on menus.
“Despite concerns regarding rising costs of doing business in our industry, another area of importance is raising the standard of employee welfare and eradicating exploitation. Our survey found six in 10 operators in New Zealand’s hospitality industry agreed there was worker exploitation in the industry.
“Employers who are mistreating migrant workers bring the reputation of the industry down as a whole and we want to assist in removing exploitation from our industry however we can. Those that are not following the rules create an uneven playing field when it comes to being able to deliver a competitive offering to customers. Business owners that are not compliant are able to undercut those that are doing everything correctly.”
Restaurant Association is currently developing an industry accreditation system to combat worker exploitation and highlight employers with good business practices. Despite these challenges, optimism within the industry is still high. Three quarters of respondents remain optimistic or unchanged about the next twelve months.
“Our industry employs 120,000 individuals across 18,000 businesses and contributes $47.8 billion to New Zealand’s GDP,” said Bidois. “We have a very important role to play, not only in the social fabric of Kiwi’s lives but also a huge part of the tourism offering.”