Hospitality staff, wage woes

Hospitality outlets are continuing to cite hiring skilled labour as one of the most difficult challenges of the industry but a report out this morning indicates wage levels may be part of the problem.

The 2013 Hospitality Report, which includes an Otago breakout, found nearly 61% of this year's respondents chose labour costs as the biggest test for their business.

''Operators don't see this changing. It also rates as the highest-predicted challenge this year. Needless to say, as hospitality is such a labour-intensive industry, any reductions that can be made to labour costs will positively impact a business' bottom line,'' the report said.

However, in the remuneration section of the report, the authors said for many hospitality operators wages appeared to be under tight control until business conditions further improved.

The hourly rate across all hospitality positions last year was $15.90, ''unfortunately'' well below the New Zealand average hourly wage of $27.

Across New Zealand, average hourly wages rose risen 2.6% in the last year, and since September 2008 the average wage after tax has increased by a total of 22%.

In the hospitality industry, hourly rates showed more subdued growth as hospitality operators worked to keep their labour costs under control, the report said.

The report was prepared by the Restaurant Association of New Zealand and the Auckland University of Technology.

When analysing remuneration trends in the hospitality industry over a five-year period (2008-12), average hourly rates increased between 1.2% for a head chef position to 31.7% for a food-to-go position.

Of note, while the head chef position increased only 1.2% over that period, executive chefs saw their hourly remuneration increase 19.6%. The only position to record a decrease in the period was that of a function manager, which fell 1.1%.

Real growth, adjusted for inflation, indicated that 30 of the 36 positions surveyed had wage growth. The growth ranged from 0.9% (housekeeper) up to 20.8% for security and door staff. The six positions that remained static over the period were cashier, front office, function manager, head chef, host and pastry chef.

The report also attempted to measure employee productivity, noting measuring workforce productivity was a subjective matter, especially in hospitality.

In 2011, when many regions in New Zealand suffered from a decline in industry sales, the Otago region experienced growth of 12.8%. That assisted the area to reach its peak level of sales per employee of $67,021, 4.5% above the national average.

However, in the last year, productivity in the region fell 4.8% and is now $63,821 - 5.3% lower than the national average.

The region had the highest average per capita hospitality spend of $1921 in 2012. ''With an increasing above-average number of employees per outlet at 7.51, staffing levels will need to be closely monitored and maintained in coming years to ensure growth in sales per employee increases again,'' the authors said.

Sales revenue per Otago outlet also recorded a decrease of more than 4% in 2012 to $479,221. That was close to the national average of $479,627.

While hospitality spending per capita in the region also dropped over the year by 4.7%, from $2015 to $1921, it remained the highest in the country - 22% higher than the national rate of $1574.

Restaurant Association chief executive Marise Bidois said the past few years had been challenging for hospitality businesses.

''We are feeling more confident about the outlook for hospitality. We saw strong growth in overall revenue in 2012, or 6.7%, and expect a more modest increase in 2013.''

The industry continued to grow and, with recent reports of consumer confidence improving, that would also have a positive flow-on effect in the year to come, she said.

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