‘We need people’: Berlin’s grand reopening hit by labour shortages

Before the pandemic, assistant manager Josh Fine never had a problem finding people to staff the restaurant in Berlin’s hip Michelberger Hotel. Now he is advertising on social media and on local food blogs in an effort to fill vacancies.

“All restaurants like us are in this situation,” said Fine. “We need people.”

After being closed for months due to coronavirus restrictions, restaurants in Berlin and much of Germany have reopened to outdoor diners over the past week, their fold-out tables pouring on to sidewalks. But customers in the slowly reviving German capital are not the problem — it is the question of who will serve them.

A lack of staff across Europe is hampering the reopening plans of hotels, restaurants and bars, which threatens to hold back an expected economic rebound as vaccinations accelerate and Covid-19 restrictions are eased further. Some managers in the sector say they may raise wages to attract workers, adding to short-term inflationary pressures.

Similar problems have plagued the hospitality industries in other countries that were quicker to lift coronavirus measures. In the US and Israel, high unemployment benefits have been blamed for people’s reluctance to return to work, while British pubs have lost staff from EU countries who returned home after Brexit.

Emily Harmon, co-owner of Berlin’s ORA restaurant-bar © Erika Solomon/FT

In Germany, restaurateurs have myriad theories for why staff are hard to find, ranging from migrant workers who left due to the pandemic and are yet to return, a flight to other sectors, worries over further lockdowns and frustrations with working conditions.

“One reason I think we have these shortages is that people working in hospitality went home and over the past six months they reassessed their lives,” said Emily Harmon, co-owner of Berlin’s Ora restaurant. “It highlighted issues in the sector: low pay rates, long hours . . . If I didn’t own this business, I’m not sure I would have stayed in this industry.”

Harmon said she retained 40 per cent of staff after many returned home or moved to places with fewer restrictions and better weather, such as Portugal or the Caribbean. Another issue was that everyone was hiring at the same time: “That puts a lot more pressure on to find talent,” she said. 

The total number of people employed in German restaurants and hotels has fallen from 2.4m before the pandemic to just over 2m in September, according to the sector association Dehoga. Almost 600,000 of these were still on the country’s Kurzarbeit furlough scheme in January.

Line chart of ifo employment barometer (2015 = 100) showing The German labour market is reawakening

The problem for many workers in the sector that has been largely closed for seven months is that many are self-employed or in “minijobs” that pay no tax and do not qualify for furlough. Even those who were furloughed received only two-thirds of their wage, and must survive without the extra they earned from tips and overtime, forcing many to look elsewhere.

“Some hospitality workers went to Austria or Switzerland, which reopened earlier,” said Ingrid Hartges, general manager of Dehoga. 

Others were hired by companies that prospered in the pandemic, such as Amazon, or the supermarkets Aldi and Lidl. Yet Hartges said she was optimistic many would return. “Ours is a people business, not like stacking shelves, we make people happy,” she said.

Rodrigo Franco, owner of La Despensa, a tiny Paraguayan restaurant in Berlin’s trendy Friedrichshain neighbourhood, said he had given up trying to hire new servers and now handed customers freshly brewed coffee and empanadas from the wooden counter himself.

Rodrigo Franco, who owns a Paraguayan restaurant, says many restaurant workers went into gig economy work © Erika Solomon

“The quality of service workers here in Berlin was a disaster even before the pandemic,” said Franco. “I love to serve people, but if we’re honest, I think a lot of people do not.” He said many restaurant workers he knew went into gig economy work, such as the grocery delivery service Gorillas.

Unemployment in the EU has risen by 2m people to 15.5m since the pandemic hit and the European Central Bank estimates a similar number of people have been furloughed or dropped out of the workforce altogether.

But despite this extra “slack” in the labour market, Katharina Utermöhl, an economist at Allianz, predicted that restaurants, hotels and bars may have trouble finding staff for some time.

“It is not a sustainable sector in terms of whether it can stay open; what if infection levels rise again and it has to shut down?” she said. “People may prefer to stay in other jobs.”

Line chart of Unemployment rate (%) showing Europe's jobless rate has been more stable than in the US

Fine at the Michelberger Hotel said he knew of one high-end restaurant manager who was running the place by himself just weeks before his planned reopening, and others that have decided not to open yet at all.

The number of job ads placed by German restaurants and hospitality groups fell sharply last year, but rebounded with a 22 per cent rise in the first three months of 2021, according to StepStone, the online recruitment service. Equally, searches for openings in the sector were up 27 per cent in April from the previous year.

“A lot of people will go back to the hospitality industry, such as students wanting to be in contact with people again rather than being stuck in their room studying remotely,” said Tobias Zimmermann, a StepStone analyst. 

Zeev Rosenberg, manager at Berlin’s Amo by Amano hotel, characterised the labour shortages as a “personal corona revolution”, with people who once worked full time deciding they were happy to make less money and work less, or have weekends off.

“You’re telling people again: you have to work,” after months away from employment, he said as his cooks grilled sandwiches in an open kitchen. “The whole system is changing for employees — this is strange for us.”

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