The hospitality industry was badly damaged by the COVID-19 pandemic. Government restrictions and fear of getting ill kept people at home for the better part of a year and half. Many businesses did not survive, and those that did experienced massive losses, both monetarily and in experienced staff. As the industry tries to recover, it faces another large challenge. Most hotels and restaurants are extremely understaffed, and it doesn’t appear that the situation is likely to improve anytime soon.
The Hospitality Industry’s Labor Problem
The hospitality industry has always had a comparatively high degree of worker turnover. Many people work in the hospitality industry only temporarily while they either attend school or look for other work. The COVID-19 pandemic hit the hospitality industry hard, and many industry workers were either laid off or left their jobs voluntarily.
While the pandemic was at its peak, this mass exodus of workers didn’t have a huge impact. Most hospitality businesses were operating at such a low capacity that the loss of workers wasn’t a major problem. However, as the pandemic receded and people ventured back out, the labor shortage began to be felt. Many restaurants and bars have been forced to reduce their hours of operation due to a lack of workers.
How bad is the labor situation right now? A recent survey conducted by the American Hotel & Lodging Association Foundation found that 97 percent of hotels responding reported having a staffing shortage. Half of respondents said that shortage was severe. A recent AHLA Foundation analysis projected an overall loss of over 150,000 jobs from pre-pandemic numbers, amounting to a 7 percent decrease. The Bureau of Labor Statistics found that the turnover rate in 2020 for the hospitality industry was 130 percent, vastly higher than the pre-pandemic rate of around 80 percent.
What is driving the labor shortage problem right now? Two factors are cited most often by former hospitality industry employees. First are the compensation and benefits. The hospitality industry has long been known for its relatively low wages and lack of benefits compared to other industries. This is hurting the industry right now as it struggles to retain employees and hire new ones.
Second is the lack of a path to advancement. Moving up the corporate ladder in hospitality is rare, and most long-term employees like to have a clear way to a management position. Right now, the hospitality industry isn’t providing one. Another issue is the increased awareness of the importance of mental health brought on by the pandemic. The long, irregular hours worked by hospitality employees are not conducive to stability and good mental health.
How to Attract and Retain Hospitality Workers
In order to combat the labor shortage, the hospitality industry may have to make some changes with regards to working conditions and compensation. The most impactful change would be to offer higher compensation and better benefits to employees. The downside to this is that it will add substantially to overall operating costs. However, in the present environment of increased travel and people returning to their old routines of eating out, these businesses are once again experiencing an increase in revenue. All industries are resistant to change, but now that things are finally on the upswing again, adapting the industry’s hiring model will be necessary for resilience in this new economy.
The long, irregular working hours are another area that impacts employee morale and productivity. Increased flexibility in choosing shifts combined with stability in scheduling will make these jobs more attractive. This is a change that can be implemented without a huge degree of difficulty or expense; it just requires a shift in mindset. No longer are employees competing for work. Employers must throw their hats in the ring and offer improved working conditions in order to recruit and retain the best talent.
New forms of benefits and compensation could help, too. For example, establishing apprenticeship and management training programs can attract young and ambitious job seekers into the industry, as can tuition reimbursement for those wanting to further their education. Employers can work with employees to determine degree programs or certifications that are appropriate to an employee’s goals and talents as well as the employer’s needs. A policy of offering more flexible work schedules would also allow employees to take advantage of these educational opportunities.
The hospitality is already relying on increased automation in order to enhance the guest experience. The convenience of using apps and other self-service technology to make orders, book hotel rooms, and check in remotely has paid off in the short term, with most consumers enjoying the flexibility and time-saving nature of these advances. The time has come, however, for the focus of increased automation to include lightening employee workload and enhancing the worker experience.
Additionally, there is a limit on how much automation is possible or desirable. The hospitality industry is a service industry, and it relies on its employees to be the face of its companies. As in the retail industry, the personal touch still counts for a lot in hospitality. Having the best people in place and retaining them for the long haul offers a sense of consistency for both guests and employees alike.