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Faversham's Shepherd Neame on emerging post pandemic into a jobs scenario 'never this bad before', according to CEO Jonathan Neame

By: Chris Britcher cbritcher@thekmgroup.co.uk

Published: 05:00, 30 June 2022

Updated: 16:22, 30 June 2022

The hospitality industry has had, to put it mildly, a rather rough ride over recent years.

Forced to close its doors for much of 2020 and a large chunk of 2021 due to the pandemic, hopes of a festive revival were then dealt a huge blow by fears over the Omicron variant.

Shepherd Neame's chief executive Jonathan Neame

As that fear passed, so it emerged into 2022 to be faced by soaring inflation squeezing its profits margins and, most troubling of all, putting pressure on the budgets of those it most relies on - its customers.

Throw into that mix a shortage of staff and it's hard not to feel profoundly sympathetic to its plight.

Because while the sector is far from alone in struggling with the previously unencountered equation of record low employment going head-to-head with record high vacancies, it is far from exempt.

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"It's never been this bad before - not in my experience," says Jonathan Neame, chief executive of Faversham brewer and pub giant Shepherd Neame.

"There have been periods when it's been difficult for certain roles, but I've never experienced a situation where there are more vacancies than people to fill them."

Read more!
Staff shortages have had an impact on Shepherd Neame - with some pubs forced to close early in the week

The fact such a large percentage of its pub staff are public-facing roles makes any drop in numbers one that is felt in terms of what can be delivered.

So just what has the impact been on the quintessential Kentish company?

"A number of pubs," he adds, "particularly in rural areas, are tending to shut on Mondays [because of a lack of staff] and some on Tuesdays as well. They're having to focus their trade around the busiest sessions - which is obviously the end of the week and weekend.

"That does restrict demand potential a bit, but we're noticing when they do go out their spend is slightly higher."

In addition, it is currently in the process of reviewing its pay levels and "some pay rates have moved forward in the last few months or so" as it looks to woo workers.

The Shepherd Neame brewery in Faversham - it says vacancies across its pubs are currently up to 20% higher than pre-pandemic

When pubs reopened following the first waves of lockdown, it was among the first sectors to feel Covid pull the rug from under its feet.

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The fact it had closed the industry for so long - and the future, just 12 months ago - seemed so uncertain, many staff opted to cut their losses and get out of the sector in pursuit of industries less likely to be obliterated by future lockdowns.

And they left just as the jobs market saw demand for roles across all sectors accelerate.

"I'm sure the insecurity was - and remains - a factor in certain people's minds," adds Mr Neame. "I've no doubt at all. Hospitality has faced an existential crisis but that has passed and now we have different challenges, but no different now than anybody else in terms of inflation."

He estimates vacancies are running up to 20% higher than pre-pandemic levels with up to 80 roles currently available across its pubs portfolio.

The pandemic has played a part in staff numbers dropping as many looked to careers in less vulnerable sectors to future lockdowns

"It's not got any better since the lockdowns lifted," says Mr Neame, "but every sector is struggling with recruitment. I'm not convinced hospitality at the moment is any worse than any other sector. Retail, logistics, right across the piste there's a real challenge.

"Pre-pandemic we had challenges in kitchen staff - that has continued. It's more that some of the senior teams in our pubs - assistant managers and chefs for example - are quite difficult to recruit for.

"I think the fundamental issue is that there are more vacancies than there are unemployed for the first time ever.

"Why is that? Clearly a number of people have left the workforce and a number who have decided to do different jobs, or become self-employed.

"I suspect leaving the EU is part, but certainly not the whole, situation. There are skills shortages in the EU, particularly in all the same trades.

The pandemic prompted many staff to change direction in their career paths

"I read recently that Paris is 250,000 hospitality workers short - and that's significant. The US has got the same problem. This is a change of working life phenomenon which is going on. It's difficult to understand exactly what the issues are here."

Covid's impact on the economy has been significant - from fuelling the staff shortage we are currently experiencing, to contributing to a global scarcity of goods as production facilities catch-up after periods of closure.

It has altered our perception of the workplace - with more and more of us now expecting, and indeed demanding, a more flexible approach to achieve a work/life balance which prolonged periods of working from home introduced many of us to.

Yet, anecdotally, much has been made of how that is being felt within sectors who rely on unsocial hours being worked such as evenings and weekends - the periods in which, of course, the hospitality industry is most reliant on having a full-strength team.

"There may be some people who find the hours antisocial," admits Jonathan Neame, "but there may be different factors elsewhere which don't have antisocial hours.

Jonathan Neame says he's never known the jobs market to be in the situation it is now. Picture: Shepherd Neame/Martin Apps

"I genuinely don't think anyone has the answer here."

Working in the hospitality sector also has an historic image problem, where it was very much seen as hard graft, low pay and not career progression.

"There once was a definite negative perception five to 10 years ago," says the Shepherd Neame boss. "But if people hold that now, it's outdated. Because for those who do work in hospitality it can be a very rewarding career. It can be a very stimulating role and offer a huge amount of variety and career paths.

"It's definitely true that everyone in hospitality - not just Shepherd Neame - is looking at more training and trying to up-skill people. Which then provides them with more skills to go on and do other things.

"I know that's something we're committed to and others in the sector are.

Our need to socialise after lockdowns were lifted will be tested by the economic situation

"Perceptions are changing quite significantly and will continue to do so. Hospitality today offers a far more rewarding retail or face-to-face experience than almost any other sector.

"If anything, I've never seen a sector which is more determined to get back on its feet. I think if there is a recession or consumer squeeze that is going to bite even harder, the one thing people are unlikely to cut back on is there socialising spend.

"People have a great demand, particularly post pandemic, to socialise."

And that, ultimately, will be the key to the sector's salvation. We have all discovered a new fondness for the pub or restaurant - the ability to mix and socialise in a way which for 18 months we were prevented from doing. Not to mention a respect for venues local communities once took for granted.

Jonathan Neame says hospitality today offers many rewarding career paths

Concludes Jonathan Neame: "For a sector like ours, there may have been an awful lot of people who have decided to leave the workforce perhaps earlier than previously anticipated at the beginning of the pandemic and from my own perspective we'd welcome them coming back.

"People are as interested in the overall benefits - flexibility, training, the team they work with, the location - working locally has got a lot of attractions given the cost of fuel at this moment in time.

"Our sector provides a lot of part-time opportunities to do that."

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