Tauranga hospitality businesses: Increased pay rates won't help struggle to fill management roles

Tauranga hospitality businesses say increased pay rates will not help fill restaurant and cafe management roles.

The comments come after the Restaurant Association and Hospitality New Zealand warned the Government of a severe shortage of cafe and restaurant managers.

However, the Ministry of Business, Innovation and Employment has rejected industry calls to place restaurant and cafe managers on the country's Immediate Skills Shortage List.

Instead, the Government said businesses would be able to fill the roles if they increased pay rates.

Restaurant Association chief executive Marisa Bidois said Bay of Plenty businesses were struggling the most from a shortage in restaurant and cafe managers, alongside Queenstown and Hawke's Bay.

Hospitality New Zealand Bay of Plenty regional manager Alan Sciascia said there was a shortage of experienced cafe and restaurant managers in Tauranga.

Sciascia said staff shortages were made worse by the increase in the minimum wage, which jumped $1.20 to $17.70 an hour on April 1.

"Businesses can only afford to pay so much. The only way a business can afford to pay its staff more is if it charges its customers more for the goods and services provided," he said.

"If it tries to get more customers (and therefore more revenue) to cover the additional staffing costs then they need more staff to service those customers. It is a Catch-22."

Area and entertainment manager at The Rising Tide and sister bar High Tide Tauranga, Lisa Rooney, said a blanket pay increase was not necessarily an effective solution to filling hospitality management roles.

"It really all comes down to equity," she said. "Payment should reflect the liability that the manager undertakes when running the business and how much discretion they are given by the owner to run the business."

Rooney said the increased minimum wage had added pressure, especially to smaller businesses struggling during the quieter months.

"But the cost of living has increased hugely over the past few years and Mount Maunganui isn't the cheapest place to live and spend in, so staff do need the increase too," she said.

Yudu editor Helen van Berkel said it was not necessarily the pay that was keeping people out of the industry, but a perception the industry was hard work and lacked a career path.

The Government's suggestion to pay more was naïve for an already struggling labour-intensive sector that has been disproportionately hit by minimum wage increases, van Berkel said.

Immigration Minister Iain Lees-Galloway said the Government was working to build a system to meet regional labour needs "without reaching for immigration as the first resort".

"Café and restaurant manager roles were declined due to a lack of evidence that effective training and retention strategies have been implemented by the industry to employ New Zealanders," he said.

"This doesn't mean they can't employ migrants, it just means they have to satisfy a labour market test before recruiting migrants."

What is the Immediate Skills Shortage List?

The Immediate Skill Shortage List (ISSL) is regionally based and identifies occupations where there is a skill shortage within a region.

If the job you are recruiting for is on the ISSL, and a migrant worker meets the requirements for that occupation, they may be granted an Essential Skills Work Visa. This means that they can work in New Zealand temporarily.

The ISSL will be replaced by the Regional Skill Shortage List on May 27, 2019.

Source: New Zealand Immigration