Amid a national labor shortage and a gradual upturn in travel, hoteliers weigh strategies for winning over workers and rebuilding their teams, piece by piece
The numbers for the hospitality industry are even more alarming. In August 2021, 892,000 workers in the food-service and accommodation industries voluntarily left their jobs, more than any other business sector. The hospitality industry’s 6.4% quit rate for the month was the highest since the BLS began keeping track in 2000.
COVID-19 has led to a marked shift in labor-market dynamics, with workers holding the upper hand for the first time in decades. As leisure travel rebounds to pre-pandemic levels, many hotels are struggling to maintain their high levels of customer service and are missing out on revenue opportunities, resulting in a slower recovery for the industry.
With the labor crunch showing no signs of abating, hoteliers are reassessing their approach to hiring and retaining workers. It’s a big conversation split into two parts here.
First, we’ll examine why workers have been reticent to return to the hospitality industry, and what hoteliers can do to win them back. Then, we’ll outline how hoteliers can provide career-development opportunities for their top performers, the ones no business can afford to lose.
Why have some workers soured on the hospitality industry?
Long before Dr. Mehmet Erdem was an associate professor at UNLV’s William F. Harrah College of Hospitality, he was a hotel worker making $3.75 an hour. Now, some of his students are making $21 an hour as housekeepers and front-desk workers at Las Vegas hotels, with the opportunity to earn more by upselling guests.
Hotels are even offering sign-on bonuses of $1,500 to $3,000 to new hires who stay for six months or a year, Erdem said. Still, hotels in Sin City are facing a major manpower shortage.
“That tells me that the problem is not as simple as needing to pay employees more,” Erdem said. “The issue is the overall employee experience. Just like we study the guest experience and map out their journey, hotels need to look at the employee experience. When you do that, you can identify areas of friction.”
Research published by Joblist in July revealed the depth of the problem facing the hospitality industry. In a survey of 12,909 jobseekers, 38% of former hospitality workers said they weren’t even considering a hospitality job for their next position. In addition, more than half of the former hospitality workers surveyed said that no pay increase or incentive could lure them back to their old job.
Workers offered a number of reasons why hospitality jobs don’t appeal to them, including a desire to work in a different setting like an office, low pay, a lack of benefits, inflexible schedules, wanting to work from home, and the risk of contracting COVID-19. Moreover, some hospitality workers have been put in the unenviable position of checking guests’ vaccine cards or asking them to wear masks, which risks drawing the ire of some customers.
FIND THE WHY
Chris Adams, founder and chief executive of the Ellis Adams Group, a Los Angeles-based hospitality consultancy, said the pandemic served as a “wake-up call” for many hospitality workers. After years of working weekends and holidays, hospitality employees who had been laid off suddenly had more time to spend with their families.
As vaccines became available, former hospitality workers even got to visit friends on weekends, and they realized what they had been missing, Adams said.
“People started to ask themselves, ‘What am I doing? Where did my life go? Why do I put myself through this?’” Adams said. “In the past 18 months, people figured out that there’s more to life than what they were doing, and it’s kind of a thankless job that didn’t make sense for their life anymore.”
Hotels that offer a higher rate of pay for weekend and holiday shifts or implement a rotation so that workers get some weekends and holidays off will have an advantage over their competitors, Adams said.
When COVID-19 essentially shut down the hospitality industry, hoteliers had no choice but to lay off employees. But hospitality workers who had given years of service to their employers suddenly felt abandoned during a time of great uncertainty, Adams said. Many harbor resentment toward their employers or the industry and are unlikely to return.
As a result, many former hospitality workers have taken advantage of opportunities at rapidly growing e-commerce companies like Amazon, which often provide better job security, competitive pay, benefits packages, and meaningful perks such as free college tuition.
Adams said publicly traded companies, hedge funds, and real estate groups have made many hospitality workers feel like expense items on a spreadsheet instead of valued employees. Prior to the pandemic, these ownership groups had sought to streamline operations and reduce headcounts, putting a strain on those employees who remained, he said. Many hospitality workers are suffering from burnout as a consequence.
“We already had a very streamlined labor model that made it difficult to achieve the results we’re looking for in terms of the financial performance and guest satisfaction,” Adams said. “Lean is not even a good word to describe it. Most hotels are working with labor models that are nothing like they were 15 years ago, and at the same time, customers are asking for a higher level of service.”
MONEY ON THE TABLE
Due to inadequate staffing, some hotels are removing tables from their restaurants so guests waiting to be seated don’t get frustrated at the sight of available tables, Adams said.
“You’re trying to keep your guest satisfaction as high as possible, but you’re also losing money when you’re forced to do that, so it’s a Catch-22,” he said.
Similarly, some hotels are leaving large blocks of rooms unsold despite strong consumer demand simply because they don’t have enough housekeeping staff and other workers, according to Lynn Minges, president and CEO of the North Carolina Restaurant & Lodging Association. She said North Carolina’s hospitality industry employed 36,200 workers in September, down from 47,600 prior to the pandemic.
North Carolina has seen a sharp uptick in leisure travel in recent months, and shortstaffed hotels are having a hard time keeping up, she said.
“I think we’re all grappling with what we’re going to do to attract workers back to the industry and how we’re going to fill those many jobs that remain unfilled,” she said. “I do think that going forward, our industry acknowledges that we have to offer competitive wages, a robust benefits program, and flexibility to accommodate workers who have child care and family obligations.”
Minges said one hotelier in the state has begun offering valet parking as a free service to employees.
“I thought that was intriguing because it was something they could do fairly easily,” she said. “It’s innovative, and it’s a simple way to let the employee know, ‘You’re a VIP in our book.’”
At UNLV, Erdem said, researchers are studying how long it takes hospitality workers in Las Vegas to commute to work, find parking, and walk to the hotel entrance. After analyzing the data, researchers hope to make policy recommendations, such as a partnership between the city and hotels to create a shuttle service for workers or a reimbursement program for hospitality workers who use public transportation.
Researchers also are looking into whether it’s feasible for hospitality companies to provide day care options for workers, Erdem said.
“The industry needs to take a multifaceted approach to addressing this issue,” he added. Sumir Meghani, CEO and co-founder of San Franciscobased Instawork, said offering workers flexible scheduling is one key to becoming an employer of choice.
Instawork’s mobile app pairs employers such as hotels, bars, and restaurants with workers seeking shift work. Companies can view workers’ profiles, which detail their relevant experience, so they know what they’re getting, and workers can swipe left or right to choose the shifts and venues that appeal to them.
Meghani said more than a million workers have signed up, though the company hasn’t disclosed how many have accepted shifts. He said demand for workers is so strong that about 100,000 employees would be needed to fill all the shifts advertised by employers through the app. The company now operates in 25 markets and recently raised $60 million in financing to fuel its rapid expansion.
Meghani said the ability to choose only the shifts that work for them is a principal reason why workers are using the Instawork app instead of signing on with hospitality companies full time. Many workers are taking care of children or elderly family members and need a work schedule that doesn’t conflict with those obligations, he said.
“Our users are speaking with their swipes, and these workers are basically saying that they want flexibility,” he said. “They want to be able to pick a schedule that makes sense for them and their family. Businesses of all sizes need to adapt to the needs and desires of the workforce as they go back to work.”
Build it back
Career development is a cornerstone of worker retention
As a professor at the University of Central Florida’s Rosen College of Hospitality Management, Dr. Fevzi Okumus, knows that hoteliers face a dilemma when it comes to career development. Without sufficient manpower to properly serve guests, hotel workers spend most of their shifts putting out fires, leaving little time for training and skills development, he said.
Nevertheless, to win the battle for talented workers, hotels must juggle both priorities and convince young job seekers that there’s room for career growth in the hospitality industry. “If a hotel company can’t make time for career development, eventually it will lose its employees, so they need to think short term and long term,” Okumus said.
Managers should take the time to learn about each employee’s life and their career goals, he said. Some workers will be content to clock in, clock out, and return to their lives. But when skilled employees express ambition, they should have ready access to a mentor who can help them outline a career path.
A SOLID FOUNDATION
Simply establishing a mentorship program isn’t enough, according to Dr. Mehmet Erdem, associate professor of hospitality at UNLV. Hotel companies should make it clear that mentoring is a company priority by including it as a metric in performance reviews. Managers and executives should be scored according to the number of workers they’re mentoring, the retention of those workers, and their career progress, he said.
“You must have a systematic way of engaging every employee, and you need buy-in from management,” Erdem said. “If you want a leadership position, show me how many leaders you are preparing yourself. You incentivize the program from top to bottom in your organization and you do it in a systematic way so it can be observed, it’s measurable, and you can tie it to performance goals.”
Okumus said some hotel companies are doing an excellent job nurturing employees by cross-training them, broadening their skill sets, and providing access to educational opportunities. He said industry groups such as AAHOA and the American Hotel & Lodging Association offer good training and certificate programs. Some hotels even offer free tuition to community colleges and universities, which often will work with hospitality companies to tailor training programs to their needs, he said.
Each employee’s career plan should include a list of skills and achievements needed to advance to the next step and a financial incentive for getting there, Okumus said.
“Instead of having a mindset where employees are required to finish these training programs, you want to provide an incentive for finishing those programs, so it’s a different culture around training,” he said. “You want to build a transparent process where it’s easy to understand how they get from Point A to Point B, there are milestones, and there’s a reasonable timeline.”
Dr. Diann Newman, vice dean of the Chaplin School of Hospitality & Tourism Management at Florida International University, echoed the importance of tying skills acquisition to higher pay.
“You want to give them specific skills and then pay them for those additional skills,” she said. “You’re giving them training, and helping them stay current and innovative, which helps the company grow and helps to retain the talent that you currently have. If you tell people that if they establish certain competencies in needed areas, they’ll be paid for those skills, that’s a big motivating factor.”
FROM THE GROUND UP
Employees who have climbed the ladder are the best advertisements for a hotel’s career-development program, Okumus said. Accordingly, they should be showcased in employee newsletters and publications to illustrate to young workers that the path to growth is real and not just corporate rhetoric.
“There are many great stories about employees starting out as doormen or front-desk workers and becoming hotel managers, but those stories aren’t widely publicized,” Okumus said. “That’s something the hotel industry needs to do a better job of showing.”
Lynn Minges, president and CEO of the North Carolina Restaurant & Lodging Association, said career development can start before a new hire’s first day.
The labor shortage is leading businesses to cast a wider net and hire job seekers who might not have been pursued before, including people getting out of prison, struggling with homelessness, or dealing with addiction recovery. Americans with disabilities are another population that traditionally has been under-recruited by businesses, including hospitality.
“We’re going to have to reach out to some nontraditional workers, and I think the hospitality industry lends itself very well to those kinds of individuals who are seeking an opportunity and a second chance at life,” she said.
Minges said the charities and nonprofits that serve these populations often provide job-readiness training, and hotels can partner with these groups to address the workforce needs of the hospitality industry.
“There’s a lot of work we can do with those potential new employees before they ever show up for work in restaurants and hotels,” she said. “We’re going to have to broaden our reach and work with nonprofits, high schools, and community colleges to offer programming to people who may be exploring new career pathways and for whom the hospitality industry may be a good fit.”
Okumus, of UCF’s hospitality school, said younger workers are more “purpose-oriented” than prior generations, which is forcing employers to focus on workplace culture. These workers want to feel like they’re part of a team and that their employer is making a positive impact on the community.
Today’s young workers place great emphasis on sustainability, so hotels that take steps to reduce their environmental impact are likely to become preferred employers. Young workers care about the charities and political groups their employers donate to, and they want opportunities to support the causes they care about, Okumus said.
Allowing employees to do volunteer work for local charities several hours a month while getting paid by the company is one way hotels can show that they’re not all about the bottom line.
To appeal to younger workers, hospitality companies will need to apply a personal touch that goes beyond career advancement, he said. They’ll need to show that they care about workers on an individual level by getting to know them and understanding what drives them outside of work.
“Generations Y and Z want to be promoted fast, and they want to know when it will happen and how to get there, but they also want to have flexibility in their work schedules and they want work/life balance,” Okumus said. “They care about their friends and colleagues more than the company, and even more than their own family members in some cases, so we need to consider all of those issues when we talk about turnover and career development.”
Chris Adams, founder and CEO of the Ellis Adams Group, said career-development opportunities are part of a broader strategy to make hotel workers feel valued.
“It’s not necessarily about the dollars as much as, ‘Do I work for somebody who actually cares about me? Do I work for someone who’s looking out for my future? Are they investing in their people?’” Adams said. “Culture is so important, now more than ever.”