Excel Recruitment predicts that many small, independent establishments may close their doors due to soaring salaries and new worker entitlements that are driving up employment costs.
It said the biggest-ever rise in the minimum wage is about to hit.
This will take the basic wage rate that employers must legally pay their staff from €11.30 to €12.70 per hour.
Chefs are enjoying the greatest hikes and will stay in high demand into 2024, according to the hiring specialist firm’s new Hotel and Catering Salary Guide.
It reveals that a hotel receptionist’s average salary has risen by 12pc for recruits on last year from €32,000 to €36,000, while a wedding co-ordinator can expect to earn €40,000 on average next year. This is up from €37,500 this year.
Average pay on offer for a second-year commis chef has risen by about 14pc – up from €28,000 to €32,000, while a newly hired sous chef can expect to earn an average salary of €52,000 in 2024 – up from €47,000 this year.
The predicted pay rises for recruits are bucking the trend of modest increases in hospitality and retail salaries over the last decade. Wages in these sectors have long been considered among the lowest in the economy.
Shane McLave, managing director at Excel Recruitment, said the biggest threat facing the hospitality industry in 2024 is the “spiralling” cost of employment rather than staff shortages.
He said the impact of the minimum wage increase is huge because it takes in such a large amount of people within the hospitality industry, and has a knock-on effect on pay rates for other roles.
“But the devil is in the detail,” he said. “The wage increases we are seeing are in more junior roles.”
He said staff in entry-level positions, and bar and waiting staff, are being offered what were once rates paid to those in supervisory roles. Mr McLave said pay rates range from €13 to €15 an hour.
“The cumulative effect of the seemingly modest incremental increases that we are seeing across the board in these lower-paid but high-volume roles is putting huge pressure on businesses in the hospitality industry and this will dominate the fortunes of the hotel and category sector in 2024. Wage increases could cripple Irish hospitality businesses in 2024.”
The report says wage increases for “high-volume” junior roles have put huge pressure on employers. It describes the challenges facing the industry as a “perfect storm”. This is due to a combination of employers struggling to keep up with wage demands, it said, on top of extra costs due to new laws including extra paid sick leave days.
It says two more large jumps in pay are expected due to plans to replace the minimum wage with a new living wage. This will likely increase minimum hourly pay to €15 an hour in 2026, it said.
A Department of Enterprise spokesperson confirmed that the €1.40 increase to the minimum wage will be the largest increase to the pay rate since it was introduced in 2000.
He said the latest figures show there are 118,400 people earning the full minimum wage rate.
