JPRestaurants, part of the family run Jersey Pottery group has three Crab Shack locations, the Oyster Box and Banjo, plus three Café Ube locations in Jersey with a fourth inside a bank facility. It also has the schools catering business, Capsicum Catering. ‘We haven’t had the same challenges that we are hearing from the rest of the industry and other similar industries that rely on what I guess people refer to as low salary migrants,’ says Dominic Jones, director of JPRestaurants. ‘I would absolutely say that the pool of employees is tighter than it was, but we employ between 160 and 180 people and we are not having the same problems as other people in doing that.’
The management team have brought in various initiatives that relate to conditions and contracts, and perhaps more controversially - pay. In June of this year they committed to paying the living wage to all of their employees. That’s not the minimum wage, which in Jersey is £7.50 or Guernsey, £7.75, that’s the living wage as defined by Caritas, the amount that is deemed to cover all the basic essentials of living, and that’s currently £10.20 in Jersey.
So what drove them to make that decision? ‘Even though we were slightly above market norms we felt that wasn’t enough, but it was such a significant rise we put up prices to make that extra payment. So we took the decision that we were going to stand out from the crowd and put our prices up and potentially make ourselves less competitive. For us in the short term it hasn’t had that impact, if anything we’ve become busier since we’ve done it.’
Dominic believes that by increasing basic pay you won’t create wage inflation as the economy will find its balance. Tax take increases, people have more to spend and the government has to pay out less in benefits. He thinks our islands have relied too long on importing cheap labour to shore up both hospitality and agriculture businesses.
‘When you get used to an unlimited supply of cheap labour you don’t invest in productivity and in working smarter, you rely on people to do jobs which other things can do. In our business we’ve achieved a 20% increase in productivity (over last 5 years) so although we are paying people more we are employing less people.
‘It’s a tricky one and we are lone voice but it may be that when prices go up businesses can’t afford it and you may have a reduction. We have over capacity here in the restaurant market in the island, there are too many restaurants and they’re not full. So they all need to be staffed up and they’re relying on cheap labour. Now when you express that to people in the industry they say well small businesses can’t go to the wall but I would look at it the other way, and say is it fair that we’re paying people £7,50 an hour who can’t afford to live in the island? So it may be that we need an adjustment and I’m not saying that needs to happen as a big bang but over time surely it’s something we should be aiming for, which is more vibrant stronger businesses that pay more tax.’
It’s a different take on dealing with the skills shortage because effectively it’s saying that by under paying people we are shoring-up inefficient businesses. It might be the most controversial, but it’s not the only initiative JPRestaurants have brought in.
You can read the full article in November's Business Brief
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