(Bloomberg) -- A taco and tequila joint is offering a perk to its line cooks and waitstaff that’s usually reserved for white-collar professionals in the UK: private health insurance.
The west London restaurant Los Mochis, which specializes in the unlikely combination of Mexican and Japanese fare, is offering the coverage in a bid to attract employees during a critical staffing shortage in the UK. Immigration law changes post-Brexit have resulted in a deficit of 330,000 workers, and the hospitality industry has been hit especially hard.
“It’s been super challenging for everybody,” says Markus Thesleff, who co-owns Los Mochis and the just-opened cocktail bar Viajante87 in Notting Hill as well as Sale e Pepe in Knightsbridge. “It means as an employer, we massively have to step up the game.”
In the UK, private health insurance in hospitality is generally offered to senior management in large hotel groups. The few people with coverage working on a restaurant floor are usually head chefs and general managers. The rest of the staff is covered through the National Health Service. Only about 11% of the UK population had private medical insurance at the end of 2020, according to health-care market intelligence provider LaingBuisson.
But the additional coverage is becoming a hotter commodity in the UK amid ongoing issues with the NHS. The country’s three largest insurers, Bupa along with Aviva and Vitality, recorded 480,000 new sign-ups in 2022. The appeal includes speed of care: People can generally get appointments within a matter of days, whereas the wait time for NHS appointments in England now averages 14.6 weeks, up from 8.4 weeks in January 2020. Almost 380,000 people in England have been waiting over a year for treatment, 231 times more than it was at the beginning of 2020. Private insurers can also offer customers coverage for specialists, such as treatment for sports-related injuries, and access to private hospitals.
Thesleff also likes the idea that his employees will alleviate strain on the NHS.
He estimates it costs £40,000 ($49,000) annually to cover 70 of his employees through Bupa, the UK-based health-care group. The rest—more than 100 people work at Thesleff’s restaurants—will be offered coverage once their probationary period ends, he says.
Thesleff, who was born in Finland and grew up in London, worked in his family’s UK-based consumer-packaged goods company before moving to the hospitality sector. He started opening swanky Pangaea night clubs in New York, London and Marbella in the early 2000s, then set up shop in Dubai, where he helped launch a series of restaurants including the well-regarded Japanese spot Okku. After retuning to London, he opened Los Mochis in 2021.
And Thesleff is on the hunt for more employees, because he has big expansion plans.
In the two years since it opened, Los Mochis has already become a destination for tequila fanatics. Inside the high-energy hangout, a Day of the Dead shrine sits near the entrance, and there are more than 400 kinds of agave spirits, with an emphasis on hard-to-get bottles. One of the bestselling drinks is the Los Mochis Tommy’s margarita, made with tequila, agave and lime juice in a glass rimmed with a mixture that includes the Japanese spice mix togarashi. It’s a genius addition to the potent margarita, and the restaurant sells close to 2,000 of them a week.
The menu, meanwhile, features one of the city’s best guacamoles, made with freshly smashed avocado, as well as a selection of sashimi, including seabass and chu toro. A handful of other dishes fuse Mexican and Japanese cuisines, as the Tommy’s margarita does, such as chipotle miso soup and yakiniku tacos, which feature the barbecued beef popular in Japan.
The Los Mochis footprint is about to get much bigger. Thesleff has announced a new outpost of the restaurant, at 100 Liverpool St., slated to open in the fall. The 14,000-square-foot space will seat 420, with an outdoor terrace and a license to stay open until 3 a.m. He plans to hire around 250 people for the project. “That’s obviously going to massively increase” the cost of insurance, says Thesleff. “But you know, it’s a cost of doing business.”
The health insurance price tag will come out of restaurant profits, Thesleff adds. (Dishes at Los Mochis aren’t cheap; the price of two modestly sized tacos starts at £15; the poached lobster ones cost £36.) He and his partners will undoubtedly need to look at pricing again.
Thesleff says the health insurance offering hasn’t generated a stack of new résumés from job applicants. But, he says, his places haven’t seen a lot of turnover, which is an ongoing challenge in the hospitality industry. Generally in the UK, around 6% of staff leave every month. That saves money on training new employees.
Insurance has helped fill a handful of senior-level positions. “We have a new director of finance from a big international brand,” Thesleff says. “And one of the key factors for them was insurance.”
In the US, where there isn’t a national program like the NHS, approximately 32% of restaurants offered health insurance in 2022, unchanged from a decade ago. Some add a surcharge for “staff benefits” on checks.
“Look, in a hypercompetitive market for employees, we need to do and be better than other people,” says Thesleff. There’s an upside to adding insurance, despite the cost, he insists. “Whenever there is turmoil or fear or change, it creates massive opportunity.” In fact, he sees it as a way to make the restaurant industry a place where people want to seek out jobs and make careers. “I think the biggest thing is that we need to normalize our industry.”
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--With assistance from Lisa Pham.
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