A LABOUR EXPERT has questioned a claim by Fáilte Ireland that the country needs to fill 40,000 vacancies in the hospitality and tourism sectors.

The tourism authority suggested earlier this week that the industry was experiencing a recruitment crisis, largely due to vacancies arising from the impact of the pandemic.

But Ciarán Nugent of the Nevin Economic Research Institute told The Journal that he is not convinced there is a crisis, saying reports claiming this are likely to be “overblown”.

“40,000 vacancies – that’s a huge, massive claim about demand in the sector,” he said.

“Considering we’re likely not going to get the same amount of tourism this summer, I’m wondering where this demand has come from, especially given that employment numbers returned [to normal] in July 2021.”

Research conducted by the Department of Social Protection into people who closed PUP claims found last October that 62% of people who returned to work had resumed employment with the company they worked for pre-pandemic. 

It also found that the accommodation and food sector saw the largest number of people – 71,000 employees – return to their pre-Covid employer, representing 58% of people who returned to work in that industry.

The remaining 42% – or 52,000 people – were found to have taken up work for a new employer, with around 33,500 people moving to a different sector – mainly into the retail sector and admin and support services.

But the other 18,500 workers joined a new company within the accommodation and food sector itself.

Nugent suggests that these trends are “completely natural and would likely occur in regular times anyway”, given the reliance of the sector on young people and students.

“Any difficulties in recruitment are temporary in nature and logistically, it’s difficult to hire 40,000 people in the space of a couple of weeks. We’re only back fully open for two weeks now,” he said.

He also pointed to claims last summer that issues around recruitment in the hospitality sector were because the PUP was too high, despite data showing that the majority of those who had been on the payment had returned to work in the industry. 

“That turned out not to be accurate,” Nugent said.

“Even in an environment where foreign visitors to Ireland were way down, the number of jobs in hospitality rebounded to pretty much exactly what they had been the summer before: 50,000 people re-entered just that sector alone in those three months.”

A spokesperson for Fáilte Ireland told The Journal that while the authority has not tracked labour vacancies in previous years, it believes the vacancy rate “must be well above previous levels on the basis that this is now widely regarded as the number one issues affecting tourism from the businesses themselves”. 

Recovery of tourism

On Wednesday, representatives from Fáilte Ireland attended a conference at the Convention Centre in Dublin to discuss how to help the tourism industry recover.

Speaking at the conference, CEO of Fáilte Ireland Paul Kelly said: “The pandemic has had a profound impact on the industry’s skill base, with a mass exodus of workers into other industries that reopened earlier.”

He said that tourism is “a building block for regional balance and a critical contributor to social cohesion”.

“It is essential for creating sustainable communities and a significant generator of jobs in regional and rural Ireland. As a critical part of the national economy, only when tourism recovers can there be a nationwide recovery,” he said.

The authority published data which surveyed 1,000 businesses and 5,000 industry workers as part of research carried out between July and November 2021.

That research claimed there are 40,000 vacancies in the sector, 24% of which are estimated to be at senior level, and that recruitment and retention challenges only emerged as the industry reopened.

A further 30% of the businesses surveyed said that they could face closure if recruitment challenges are not resolved. 

They highlighted unsocial hours, competition from other employers and unrealistic wage expectations as the most common reasons for recruitment and retention challenges.

Smaller firms also said they were finding it hard to compete with larger ones on pay. 

Meanwhile, workers in the sector who were surveyed also said they generally enjoy the working environment in the sector, but a third said they are concerned about job security, pay and unsocial hours.

Unsocial hours in particular were found to be a major reason why some workers longer want to work in the sector.

Cost of living

Nugent also explained that some employees may have left the hospitality sector due to the rising cost of living not being reflected in their wages.

The number of people unemployed in January 2022 stood at 7.8%, up from 7.4% in December 2021, meaning that more people are looking for work, Nugent said.

Research from the ESRI published last year found that 43% of minimum wage workers in Ireland were involved in sectors disproportionately affected by job losses and closures during the pandemic, including in accommodation and food services.

The rising cost of living also means that lower-paid workers in particular are able to do less with their money, and Nugent believes this will put pressure on Government to increase both the minimum wage and welfare payments. 

“There’s going to be an issue about minimum wage, which of course will disproportionately affect the hospitality industry,” he said.

“It is an uncertain time for the hospitality industry obviously. Of course, they won’t want to bear the brunt of inflation, especially at the bottom of the scale.”