13 Nov 2018

Finding good staff in the hospitality industry

From Afternoons with Jesse Mulligan, 1:27 pm on 13 November 2018

Restaurateurs are facing chronic staff retention problems because of tightened immigration laws, an Auckland business owner says, but a hospitality worker says low wages are to blame. 

Gus Obeid, owner of the Gusstop Cafe in Auckland, says staff are difficult to find, and retaining them is also a constant headache.

no caption

Photo: 123rf.com

Gus employs eight people three of whom are non-New Zealand born. He says it’s not uncommon when they advertise for staff to get no replies.

"When we do get replies, 90 percent of them are from people with no proper work permit,” he says.

Many of those, who are “excited, committed and would love to turn up to work on time” are not available because of new regulations, he says.

“We would love to hire local applicants. In fact, I would prefer to work with the local people - [it’s] better for our business - yet it is impossible, well near impossible, finding people who can stay with us longer than six months.”

New Zealanders see hospitality jobs as a passing phase, he says.

“It is staffing who are the beating heart of our business and at many times this beating heart is under resuscitation or on life support and it is really an ongoing headache for us.

“This industry is not envisaged as permanent, it’s a passing phase. It takes us six months to train someone and the day we start to rely on them is the day they give their notice.” 

He says it's “costly, frustrating, ongoing madness,” and doesn’t believe wages are the problem in his case.

“We pay above minimum, way above. You see our industry has its own dynamics and we’re not an IT or a law firm business, we can’t pay 50 percent of our revenue in wages. It’s just not sustainable.

“Comparatively speaking, we do pay them well above minimum wages and we are constantly raising their pay.

"I don’t believe it is the pay. You obviously have to pay them well, which we do, but I don’t think it’s the only reason why people just leave, they ... I don’t know, it’s a generational thing, a cultural thing. 

"It’s just a passing phase: after six months they go.”

He says it’s common to see CVs from local applicants with 20 jobs listed within a few years. Foreign applicants on the other hand are more committed.

“It is extremely difficult, and it has become even harder, for them [foreign workers] to acquire proper work permits…I believe lately it has become even harder and the decline rate for applicants is quite high.”

The Auckland industry is in a growth phase which will only make the problem worse, he says.

“The opening of Commercial Bay and the America's Cup is looming and the local supply has always been significantly anaemic  - it’s a very dire problem.”

A hospitality advocate responds:

Barista preparing a cappuccino

Barista preparing a cappuccino Photo: 123RF

Chloe Ann-King is an advocate and hospitality worker and she got in touch with Jesse Mulligan to respond to Gus’ observations about staff problems.

A worker with 13 years experience, she says money and conditions are very much a problem.

“Wages are a massive issue. People do not want to work in an industry where we are paid so poorly that we can’t even afford rent, even though we’re highly skilled workers.”

Poor conditions and the flouting of employment law are also rife, she says.

“We don’t get breaks, we are denied our 8 percent holiday pay - which is a major form of wage theft in my industry.

“This is not just individual employers making the choice to pay poverty wages and flout employment law, this is a structural issue. We know that poor employment policy has played a massive role in the further casualisation of hospitality.”

She says the Employment Contracts Act 1991 made things much harder for hospitality workers. 

“It made joining unions voluntary, it dismantled workers’ rights and it undermined penalty rates.

“There has been a massive boom in the hospitality industry in this country, but there has been absolutely no boom in our wages.”

Listen to the full interview with Chloe Ann-King