£1,000 Signing-on Bonuses in Restaurants Are Not a Solution, But They Could Be a Start

Since lockdown restrictions were relaxed in spring 2021, it has become rare to walk past a bar or restaurant in the U.K. without spotting a “staff wanted” sign in the window. The COVID-19 pandemic prompted some workers to leave the industry altogether; meanwhile, Brexit introduced new restrictions on immigration, affecting a sector that had long relied on E.U. labour. The initial pent-up demand, from customers keen to return to bars and restaurants after months of lockdown, coincided with fewer workers looking for jobs in hospitality.

This perfect storm is generally referred to as a “recruitment crisis,” and has got employers thinking about creative ways to tempt workers into the industry, from using app-based casual labour to addressing hostile working cultures. Most recently, some are now responding to the economic laws of supply and demand with a drastic action: by paying more money. The keenest are even offering unprecedented sign-on bonuses to sweeten the deal, in cases amounting to thousands of pounds.

Until recently, a “golden hello” was more common in executive-level office jobs. Banks and law firms, for example, have long offered sign-on bonuses to lure in the so-called brightest and best talent. Their use in the hospitality industry is a sign of just how desperate employers are to attract talented kitchen staff, who are particularly in demand.

Reports of dramatic pay rises, however, do not tell the full story. In 2009, in the midst of a financial crisis, the median gross hourly pay in the accommodation and food service industries was £6.21, according to the Office of National Statistics. By 2020 it had increased by around 40 percent, to £8.72. But when inflation is taken into account, hospitality pay has all but stagnated over the past decade. In 2020’s money, the 2009 median wage is around £8.52. This means that, in real terms, hourly pay increased by just 20 pence over eleven years, averaging less than two pence a year.

Higher wages and sign-on bonuses, more than a generous gift to potential employees, are a long-overdue corrective to a decade of wage stagnation. While this may spell good news for workers, this trend is more often reported as a problem for the employers who pay wages. A recent Guardian headline, for example, sympathised with the small restaurants “forced to offer” large sign-on bonuses. The article did not detail how or by whom those employers had been “forced.”

This is another demonstration of how the position of workers in hospitality is too often overlooked in the U.K. media, as part of a status quo which rarely questions consumers’s insatiable demand for a plentiful supply of new and competitively priced bars and restaurants. If profit margins are tight (they are), and employees deserve a fair wage (they do), then something might have to give.

With many customers cancelling bookings due to the recent prevalence of the Omicron variant of COVID-19, alongside the ongoing structural problems of high rents and labour shortages, it is certainly not an easy time to run a bar or restaurant. However, the “fundamental rethink” of hospitality that many hoped for at the start of the pandemic has not yet materialised; with or without a £1000 golden handshake, it is still not an easy time to work in the industry either.