Today’s Hotelier Roundtable

Sponsored by Access Point Financial

Hoteliers address the labor shortage in hospitality

by Peter Clerkin

When it comes to the economy, the headlines talk of a booming stock market, low unemployment, significant and steady job growth, and people keeping more of their paychecks thanks to tax reform. But even when things are great, there are challenges in the workforce, and in the hotel industry, one of the most significant challenges is labor. From workforce shortages and worker retention to finding the best employees, Today’s Hotelier wanted to get a sense of how the industry is getting ahead of these issues.

In late July, Today’s Hotelier held its first ever roundtable at the AAHOA headquarters in Atlanta where industry experts and insiders shared their perspectives on labor trends, workplace culture, and what the future holds for workers and hoteliers as the industry evolves. Access Point Financial sponsored the roundtable. As an AAHOA Silver Member, they are also a long-time supporter of AAHOA’s annual convention and trade show.

In the early part of 2010, as the nation emerged from the economic downturn, many believed that the new normal for full employment would be in the range of five to seven percent unemployment. Skepticism of the economy returning to pre-2008 strength remained high; however, a decade removed from the financial crisis that brought the global economy to its knees, the nation is seeing unprecedented and unexpected growth. Second quarter GDP sat north of four percent, and the latest figures show unemployment at four percent nationally. It’s even lower in certain metro areas, such as Atlanta where the jobless rate is 3.5 percent. But what does this mean for the hotel industry?

Chip Rogers, AAHOA president and CEO, served as the roundtable moderator and began by asking participants about the challenges that low unemployment presents when filling entry-level jobs. Many shared their difficulties in hiring and retaining employees in entry-level positions, such as housekeeping but the discussion took a quick and surprising turn towards a broader examination of workplace culture and how it can make or break a solid corps of talented and dedicated workers.

“The biggest challenge across segments is in housekeeping,” noted Keith Cline, president and CEO of CorePoint Lodging. Difficulties for companies include determining how they can enrich a worker’s life aside from a paycheck. He added that the wage pressure in the labor shortages is manifesting itself in overtime and contract labor.

Azim Saju, principal of HDG Hotels, observed, “There’s more demand for labor. The labor force, especially Millennials, want more from a job than just a paycheck. Retaining top talent is exceptionally challenging, and recruiting is hard – people want to work for a company that has a mission, a vision, core values, and compensation that will keep them there for a long time.” Building a workplace culture that helps employees understand how their role fits into the bigger picture requires a change in the dialogue. Dinesh (Dan) Rama, president and managing director for NewGen Worldwide, noting that hotels would often cycle through the same workers as they competed for their labor, asked, “When do the economics fall apart when it comes to hotels swapping staff for hourly raises of 10 cents, 20 cents, or 30 cents?”

Countering the nickel and dime mindset that leads employees to switch jobs frequently is challenging; however, O’Mally Foster, vice president of culture and talent resources at Vision Hospitality Group, spoke about Vision’s multifaceted approach to workplace culture building that helps them retain employees. “People want to have their life outside work. Culturally, if you have a sound, focused culture, that says, all the other things, someone can offer 10 cents more, but are they offering you the family environment that we have? Are they offering you a place where you belong, where you feel connected? That is what helped us maintain the staff that we have.” He also spoke about how Vision found success in partnering with local high schools and a vocational course that highlights the opportunities for advancement in the industry.

Other participants echoed this sentiment of helping employees escape a shortsighted mindset and focus on who they are, where they are within a company, and where they have the potential to go rather than the particular job they perform.

AAHOA Chairman Hitesh (HP) Patel, president of Capital City Hospitality Group, suggested that companies can set themselves apart by creating an environment of respect for employees and recognizing their work-life needs. He cited flexible work hours as an example, noting that his company allows employees to create a schedule. This can be particularly beneficial to single parents or students who might not be able to work a traditional six- or eight-hour block. Patel noted that this approach greatly helped in the retention of housekeepers, and pointed out that, because of more precise check-in times, some of his employees are able to fill PM housekeeping shifts.

Heetesh Patel, chief executive officer at Renal Management Company, said, “Celebrating employees through birthday parties and monthly events helps create more of a family environment. This translates directly to higher survey scores for job satisfaction.” He added, “The dividends it pays by having the commitment from our staff has been monumental for us…For us, it’s invaluable to build that family atmosphere from the beginning.”

Panelists talked about the younger generation and what steps hotels could take to make careers more attractive to them. “Millennials want to know that the work they do has an actual impact – they don’t just want a job,” said Dan Rama. Azim Saju noted that educating employees about the causes a company supports and encouraging them to get involved in their communities as well contributed to a greater sense of mission and purpose.

While much of the early discussions centered around creating a workplace culture and how that can retain workers, moderator Chip Rogers pressed panelists about recruiting. According to every panelist, making clear the opportunities for advancement within an organization is one of the surest ways to attract and retain employees. Keith Cline said, “It’s impossible to be an employer of choice if you have no examples of advancement in your organization.” Ricky Raman, chief operating officer at PeachState Hospitality agreed, “You’ve got to show them that opportunity in-house”.

Building upon the earlier discussion of workplace culture, O’Mally Foster suggested that replacing the sterility and box checking of the interview process by allowing prospective hires to observe and immerse themselves in the workplace culture before an interview could allow for a better assessment of whether an employee would be a good fit. “Let them really get involved in [the culture]. Then you sit down and converse with them about their thoughts about what went on…and really get that organic conversation going on.”

Jyoti Sarolia, chief operating officer at Ellis Hospitality LLC highlighted her practice of asking prospective hires to take fifteen minutes to walk around the property before their scheduled interview. “After allowing them that time to engage with the property and employees, the interviewee is given a series of questions to assess how they would react in the environment.” She noted that this initial interview process is successful in identifying those individuals in whom the company wants to invest. “A lot of it is a sense of what you feel,” said Heetesh Patel. “Their resume can’t determine if you should hire them.”

Concluding the discussion, panelists spoke to potential changes in the workforce as technology begins to play a greater roll in the hospitality industry. While some jobs will inevitably be lost to automation, panelists agreed that there will ultimately be a hybrid model. Machines are not likely to replace employees entirely, but there will be fewer jobs for people to perform. Efficiencies in room design and cleaning, check-in kiosks, and apps that place food and drink orders are all advancements that pull guests one step back from human interaction, but the panelists seemed hesitant to endorse the likelihood of a fully-automated hospitality future. “There will always need to be people in hotels to deliver authentic experiences, to create some type of relationship with our guests,” said Keith Cline. “It doesn’t matter how much automation you can create, how are you going to have a self-making bed, a self-cleaning bathroom?” said HP Patel. “At the front desk, you could have machines checking people in…for me, I like having that interaction…checking in, going to the bar or restaurant…losing that interaction, that’s not something I’m ready for yet.”