Is this the 'death of the great British summer job'?

The Herald Scotland

2 days ago

The decline has come on the heels of a hike in employer national insurance contributions, which took effect in April alongside increases in the national living and minimum wage. Chancellor Rachel Reeves announced the changes in the Autumn Budget as the Government took radical steps to boost the UK's battered public finances, but it seems the after-effects of the move are coming home to roost.
UKHospitality said the hikes in labour costs imposed £3.4 billion of additional annual costs on the industry, declaring that 84,000 jobs have been lost in the sector since the Chancellor announced the changes last October.
And the effects are continuing to be felt as employers cut back on casual and temporary staff during the key summer months to save cash.
It spells bad news for the thousands of young people who will have been looking for work ahead of the new academic year this autumn, as well as those looking to take their first steps in the world of work.
Allen Simpson, chief executive of UKHospitality said: 'This is the time when hospitality businesses would be frantically hiring staff for the busy summer months, when the sector expects to welcome families to their hotels, and serve millions of people with ice cream on the beach, fish and chips on the pier, and cold pints in the pub garden.
'I know from personal experience how important hospitality summer jobs are for getting young people experience of work, however hiring this year has fallen off dramatically, with 22,000 fewer jobs available compared to last year. It is sadly reflective of the impact we have seen from increased costs over the past nine months – less employment, less opportunity and less growth in the economy.
'Unless the Government acts, we could well be seeing the death of the great British summer job. That's not good for the economy, for businesses, or for the people that need this flexible work during the summer. We need to see action at the [Autumn] Budget to reverse this damage. That starts with fixing NICs (national insurance contributions), lowering business rates and cutting VAT (value-added tax) for hospitality businesses.'
UKHospitality has not been alone in observing the trend. The most recent Small Business Index from the Federation of Small Businesses, which gauges sentiment among the organisation's members, found that in the second quarter nearly one in six (16.1%) in Scotland said they expect their staff numbers to drop. This was a slight increase on the first quarter, when 12.7% expected staff numbers to fall and more than double the number in quarter two last year (6.8%). The index also revealed a fall in the number of small businesses which said they would be recruiting, to 10.5% from 12.7% in the previous quarter and 12% a year ago.
According to the FSB, the rise in employer national insurance contributions has clearly had an impact on recruitment plans.
There is plenty of anecdotal evidence of the trend, too. Speaking to family, friends and colleagues, it is undoubtedly the case that it has been a lot more difficult than usual for young people to pick up casual or part-time work this summer, including in hospitality and retail – both traditionally big sources of employment for this demographic. Mr Simpson is correct to note that the lack of work will have a significant impact on young people, especially on those who are looking to move into the world of work for the first time and gain the experience that is so crucial to their development. This dearth of summer work has financial implications too as hard-pressed families were perhaps counting on some additional income amid what continue to be challenging economic times. Some young people would have been looking for work over the summer to build up cash to support them over the forthcoming academic year.
There is a potential impact on consumers too. Doubtless, hospitality operators will do their best to forecast the amount of staff they need over the summer. But what happens, for example, when the sun shines and people flock to the seaside or other popular spots in big numbers? Will pubs, cafes, hotels and restaurants have the staff they need to cope if they are deluged by thirsty and hungry customers? How understanding will people be if the service they receive falls short of the expected standard, even if it does for entirely justifiable reasons? Probably not very in my opinion, especially given how expensive it now is to eat and drink out in the UK following years of high inflation.
Of course, it is only fair to note that some hospitality operators are performing well despite the additional cost pressures they now face. Over recent days there have been positive trading updates from pub giants JD Wetherspoon and Mitchells & Butlers, owner of high-street brands such as O'Neill's, Harvester, and All Bar One, which have struck an upbeat note about their prospects even though labour costs have risen sharply. But it is important to remember that companies of this size, which own thousands of pubs between them, are a good deal more equipped to ride out the rise in costs than smaller independents.
These undoubtedly remain challenging times for hospitality and it is a crying shame that, as businesses adapt to the new cost environment, it is thousands of young people who will be among the biggest losers.