Executive summary
1. This Report presents stakeholder views on fair work challenges and opportunities in the hospitality industry in Scotland. The research underpinning the report is linked to a wider investigation of potential fair work policy levers available to the Scottish Government. The research involved in-depth interviews with 15 key stakeholders spanning 11 hospitality organisations over Autumn 2023. The aim of this report is to consider a range of policy levers available to the Scottish Government and how these may be received among hospitality industry stakeholders.
2. The hospitality industry in Scotland offers business opportunity, jobs and careers, but also a range of fair work challenges. The sector is heterogeneous, delivering a broad range of products and services and catering to a wide variety of markets and customers.
3. Parts of the industry are characterised by high levels of non-standard employment contracts, underemployment, low pay, unsocial hours, significant staff turnover (reflecting high part-time and temporary/seasonal employment), and the workforce is disproportionately made up of women, young people, racialized and migrant workers. Jobs themselves are diverse and span a wide range of skills, though most workers are in elementary occupations.
4. For many, hospitality is not an attractive industry in which to work. Skills shortages could stimulate a business model shift geared toward the retention of workers, and fair work practices may well assist in improving the reputation of the industry as a place of work.
5. The research used a model of change toward fair work that focussed on increasing awareness; improving understanding; building endorsement; identifying relevant actions; providing support for implementation; supporting monitoring and evaluation; and enhancing knowledge sharing and learning on effective practice.
6. The research framed the approach of government to leveraging fair work by drawing on Hood and Margett’s (2007) NATO approach, where governments can use Nodality – their position of influence in networks; Authority – their regulatory power; Treasure – the use of government resources; and Organisation – human and organisational assets available to government. In Scotland, the devolution settlement defines the Scottish Government’s authority powers.
7. Stakeholders identified a number of key business challenges facing the hospitality industry: rising operating costs; available housing and transport in their locale; attraction and retention, stemming in part from the industry’s poor reputation; uneven pattern of demands for services; and visa restrictions affecting labour supply.
8. Key fair work challenges affecting the industry were identified as low pay; unsocial working hours and patterns; challenges in delivering training in the context of variable shift patterns and high operational pressure points; and work intensity and stress.
9. However, many saw that the industry was improving in fair work terms; that there were pockets of good practice; and that the need to improve attraction and retention was driving greater attention to fair work. Specifically mentioned were the industry’s offer in terms of progression and social mobility for some; the offer of flexible working hours for those needing to work flexibly; and the provision of important non-pay benefits such as subsidised accommodation for some.
10. Beyond the fair work dimension of opportunity, stakeholders pointed to the presence of more stable ‘career’ workers; a range of mainly informal voice channels (though little collective voice); and fulfilling work that was sociable, offered opportunities for travel and exposure to different work contexts, relatively autonomous working and opportunities for ongoing learning. Respect at work was considered more variable, with good practice sitting alongside pressurised workplaces and traditional and not always respectful management.
11. It was widely agreed that hospitality needs to improve its reputation, promote the industry as an attractive career, and leave behind what many saw as legacy issues that were inconsistent with fair work – alongside strong industry leadership in encouraging and supporting improved practice and in deterring poor practice.
12. The interaction between addressing business challenges and fair work was, however, contested: some thought addressing business challenges took precedence before improving fair work; others felt prioritising fair work could help address businesses challenges.
13. The stakeholders had a range of views about what fair work levers are needed or might work most effectively. Some favoured incentives for business. Others believed that any lever for fair work had to deliver clear benefits for employers to ensure its effectiveness.
14. The table below identifies the range of levers by the mechanism of policy influence. The colour coding system identifies strong stakeholder support (grey), mixed stakeholder support or a limited range of views (light grey) and limited stakeholder support (black).
| Authority | Treasure | Nodality | Organisation |
|---|---|---|---|
| Targeted awareness campaign | Further conditionality | Development of accredited fair work training | Business support, tools and diagnostics |
| Embedding fair work in employability provision | Strategic joint capacity investments | Support for fair work charters | Support for a fair work hub |
| Support for Real Living Hours – minimum number of hours 4 weeks notice of schedule change | Support for formal fair work accreditation – externally monitored | ||
| SG, public sector/body and ILG fair work champions | Support for fair work communities of practice |
15. There was support among the stakeholders for targeted awareness raising of fair work in hospitality, and a mixed view of how much awareness there was in the industry. Several stakeholders felt that the time was right for a broader discussion of fair work, with businesses more receptive due to widespread recruitment and retention difficulties.
16. More business appropriate language might, according to stakeholders, highlight the business benefits of fair work, alongside attention to the specific needs of sub-sectors of the industry and different locations.
17. Few stakeholders had experience or strong views on employability provision, or of how policy to embed fair work more deeply in the provision might deliver. However, of those who did have a view, engaging with fair work through employability services was considered to be of potential benefit to their business.
18. Real Living Hours accreditation was considered a challenge for some in the industry, given their patterns of demand and ability to plan staffing in advance. Living Hours accreditation requires real Living Wage accreditation, and some businesses were not so accredited. Some stakeholders could not see how a commitment to living hours could be aligned with their current business models or the business models adopted by many in the industry.
19. Stakeholders recognised that Living Hours might be important to staff, and more were likely to say they could deliver 16 hours minimum contracts that believed they could deliver four weeks’ notice of shift changes.
20. There was significant support for fair work champions at industry leadership level and, potentially, within trade bodies and associations, and a general recognition that greater capacity in fair work, and dedicated capacity especially, could support greater understanding of, and actions to deliver, fair work across the hospitality industry.
21. Stakeholder views on further conditionality were mixed. Some felt that conditionality rewarded businesses already delivering fair work. Others felt that fair work conditions should help businesses more on their journey to fair work, that is, by putting them in the position to deliver fair work more effectively.
22. According to some stakeholders, fair work conditionality is currently a substantial driver of improved practice in hospitality, with employers adopting fair work practices to access support, for example, from public agencies. Contact with public agencies on conditionality can also initiate wider discussions with businesses about fair work and how to support it.
23. Employer stakeholders were also strongly of the view that conditionality should be seen in the wider context of the specific challenges facing, for example, rural and island hospitality businesses, in relation to transport and housing infrastructure, and how these affected their ability to meet fair work conditions.
24. Stakeholders did not offer detailed views on strategic joint capacity investment as a lever, but generally agreed that further capacity is key to delivering fair work in the industry. While most discussion focussed on capacity for employers, specifically through trade organisations, and only a few stakeholders raised capacity building by supporting capacity investment for workers or unions. Notably, only one comment focussed on the potential of unions and employers developing capacity together.
25. There was strong stakeholder support for fair work education and training. It was felt that this was important for leaders and managers as well as staff. Training would only be effective, however, according to many stakeholders, if it was industry-led and delivered in ways that made it accessible across small businesses and the different industry sub-sectors.
26. Stakeholders showed no real support for formal external fair work accreditation either at industry or sub-sector level, raising concerns both about potential complexity and cost. The sole exception was where employers felt that formal external accreditation might assist them in engaging wider stakeholder groups in education and training and help improve recruitment prospects.
27. There was more – although mixed – support for a hospitality industry charter. Those who supported it believed it had to be industry-driven and bring identifiable business benefits. Crucially, many argued that engagement with a charter had to be across businesses, not just key managers, and include front line staff.
28. One limitation of charters that some stakeholders referred to was the lack of enforcement mechanisms. One response to this is to have greater worker engagement with charters but also the potential to develop joint employer-union charters that would have mechanisms of joint enforcement that avoided the costs of external monitoring.
29. Stakeholders voiced considerable support for industry-based communities of practice, viewing peer-to-peer learning on fair work as a crucial source of information and insight. Support to develop such networks was considered valuable.
30. Several businesses gave highly positive feedback on the approach to fair work taken by Highlands and Islands Enterprise. This involved identifying key players in the industry with good examples of fair work practice, learning from their practice and their challenges, using their insights and outcomes to engage other businesses and spreading knowledge and understanding of fair work. HIE’s approach connected businesses in what was effectively a community of practice.
31. Overall, support for networks or communities of practice was strong, and policy support may be a crucial catalyst to establishing and developing such networks, alongside access to appropriate support materials.
32. Hospitality stakeholders also recognised the importance of good intelligence, data and business support tools, and were not all confident about where to access fair work support materials in general, or on specific aspects such as equality, diversity and inclusion or wellbeing. In this regard, the fair work website operated by Highlands and Islands Enterprise provided a good example of practice, giving employers insight and access to supporting documentation which appears to have stimulated interest in fair work.
33. Beyond the potential efficacy of the proposed levers, many stakeholders thought there was significant negativity towards government policy within the industry, making discussions of policy levers more challenging. These views ranged from concerns over a confused policy landscape; discontent over policy differences between Scotland and England, specifically in relation to rates relief; and perceptions that the Scottish Government isn’t sufficiently supportive of business.
34. Concerns were also raised in relation to local government policy, particularly in relation to licencing processes, with complaints of bureaucracy, delays, a lack of fitness for purpose and inconsistency in the treatment of different businesses at different times. Some policy supports were welcomed, however, such as public funding for talent development in hospitality.
35. Three specific requests of policymakers were made by stakeholders: to develop a more positive and forward focussed narrative about the industry itself; from employers, to provide fiscal relief or incentives to deliver fairer work, and to work with the industry to drive improvement – to co-produce tailored solutions rather than to rely solely on ‘carrots and sticks’.
36. Across all stakeholder discussions was a strong sense of the diversity of the industry and the limits of a one size fits all approach to leveraging fair work. Some of this diversity reflected industry sub-sectors who faced different demand pressures.
37. Overall, stakeholders understood that no single policy lever on its own was likely to effect significant change, but that combinations of levers had potential to enhance fair work in the industry.