Job Support and Kickstart Schemes Set to Fail to Prevent Redundancies in Hospitality, Travel & Leisure Particularly Among Young People

Last week, WiHTL (Women in Hospitality, Travel & Leisure) conducted a survey of HR Directors from 20 companies in hospitality, travel and leisure (HTL), representing over 200,000 employees, ranging in size from 100 to 50,000 employees on the impact of Covid-19 on youth employment in HTL. The results gave a stark reminder of the challenges being faced.

The findings were stark. The pandemic has had an overwhelmingly devastating and significant impact on their businesses and they are having to make difficult decisions regarding site closures and redundancies.

The economic importance of the sector cannot be underestimated. The UK hospitality industry alone accounts for nearly ten per cent of UK jobs, making it the third-largest industry by employment in the UK, employing 3.2 million people directly. With the pandemic resulting in one in three 18-24-year olds losing their jobs and the number of young new claimants for Universal Credit more than doubling between March and June (Retail Times), WiHTL was interested in particular, in the impact of the pandemic on youth employment.

Those aged 18-24 years old were so far more likely to have been furloughed than made redundant. Respondents stated that 81% of their workforce in this age group were furloughed and the majority of respondents (76.2%) stated that 0-25% of redundancies to date were aged 18-24.

Source: WiHTL survey - Impact of Covid-19 on Youth Employment in HTL - Q: What % of your workforce aged 18 -24 have been made redundant?

With October seeing the end of the UK government’s furlough scheme and the introduction of the government’s new Job Support Scheme however this looks set to change. 42.9% of respondents stated that they will be making further redundancies once the furlough scheme finishes with the likelihood of this increasing as 28.6% saying they still weren’t sure.

Pitfalls of the Job Support and Kickstart Schemes

57% of respondents said they are not planning to use the Job Support Scheme - a government scheme designed to ‘protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19.’ The reasons for them not intending to use it were that they felt it was costly and too complicated to implement which made it financially unviable.

The same number of respondents felt the government’s Kickstart Scheme - a scheme which provides funding to create new job placements for 16 to 24 year olds on Universal Credit who are at risk of long term unemployment - wouldn’t work for them. The overwhelming reason being that employers are trying to protect existing jobs and are not in a position to offer new ones. Many have recruitment freezes in place with one respondent commenting “we have just reduced our headcount so I can't foresee us needing to hire new employees until Q4, 2021 at the very earliest, unfortunately.”

Research by the recruitment app, Placed, found a more positive view of the Kickstart Scheme from young people with one 19 year old student sharing, “I think the Kickstart Scheme is very useful for young people. Typically throughout lockdown we were the first to lose our jobs or be furloughed. It’s been a problem for young people to get the jobs in the first place even before lockdown as we lack the experience to get jobs but then can’t gain experience as we can’t get the jobs.”

However, even potential applicants to the Scheme are able to see its shortfalls, particularly for the hospitality industry, with one 22 year old part time hospitality worker commenting, “I think it sounds good but what kind of jobs would it apply to? And is it just a better paid apprenticeship? It suggests employers would have to make a completely new role up for whoever does the scheme.”

The complexity of the scheme was seen to be an issue. “There are a lot of rules,” says the Recruitment Manager for a national restaurant chain. He’s keen to employ more young people after lockdown because ‘they bring energy like no other to our business’, but he’s not convinced that Kickstart is the only answer.

Those companies that are planning to use the scheme are unsure as to how many placements they will be able to create.

A call for more sector specific government support in HTL

When we asked respondents how they felt the government could support youth employment in the hospitality, travel and leisure industry, the common themes were requests for greater flexibility in the apprenticeship levy (relaxing rules and restrictions on it to make it more usable during these times), a simplification of the Job Support Scheme and the Kickstart Scheme, greater sector specific financial support, and acknowledgement that the Hospitality, Travel and Leisure sector is one of the biggest employers in the UK and thus support, training and educational funding should mimic this.

“It’s a super industry to start in at a young age and develop within. Greater promotion is needed in schools and colleges with vocational qualifications on offer to support. Hospitality schools exist on the continent but far less so in the UK”, commented one WiHTL survey respondent.

Tough times ahead

There were concerns that the impact on youth employment in the industry will have a wider, longer lasting impact on social mobility with all of respondents of the WiHTL survey feeling it will have some kind of negative impact on social mobility. They cited that there will be less opportunities available for young people and that Covid-19 will set back the great efforts to close the already growing opportunity gap.

One WiHTL survey respondent commented, “There are tough times ahead for the younger generation, which will impact significantly on their mental health.”

A further respondent shared, “The growth of a national, UK based, hospitality service culture to grow and nurture a pool of dedicated potential employees is fundamental to the survival of the industry in the future.”

Tea Colaianni, WiHTL Founder and Chair commented: “The hospitality, travel and leisure industry will find it very difficult to regrow through the mist of continued social distancing measures, local lockdowns and travel restrictions. Sadly, we have already seen substantial job losses, restructurings and administrations in our sector. Our research shows that the impact on women, people from ethnic minorities and young people is acute and substantial. Those who experience long-term unemployment are more likely to be employed in semi-skilled and unskilled occupations when they do re-enter the labour market, and are likely to suffer a negative impact on earnings over the duration of their working life. The industry needs targeted support to tackle the current employment challenge.”