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What if labor shortage is a long-term threat to the hospitality and tourism industry?

The U.S. economy finally shows signs of a strong recovery from the pandemic. Nevertheless, the surging delta variant cases, inflation, and the global supply chain disruption, among other concerns, add considerable uncertainty to the economic outlook.

Notably, the hospitality and tourism industry is unlikely to recover any time soon. On the one hand, there is no real sense of recovery until people are traveling for business again. Yet, more companies have postponed the return-to-office plan and let employees continue working from home. On the other hand, the industry is facing an extreme labor shortage that slows down its recovery.

A restaurant shut down after the entire staff quit

Last week, a burrito chain restaurant in Georgia was forced to shut down because its entire staff quit. The staff put a sign in the front of the restaurant, saying that they had worked seven days a week for a month. They barely had any time off. Eventually, they quit due to being underpaid and a lack of appreciation.

Most likely, the restaurant was short-staffed and overworked the associates. When workers felt burnout at work but received no recognition or appreciation, they fired the employer. Having the staff work overtime is not the solution to the labor shortage issue.

How big is the labor-shortage gap?

In July, the U.S. recorded 10.9 million openings, but there were only 8.7 million unemployed workers in the market. In other words, the market will still have 2.1 million unfillable vacancies even after all 8.7 million unemployed workers have taken a job offer. Moreover, every industry reported more job openings in July 2021 than at the pre-pandemic level in February 2020.

A labor shortage does not seem to be a short-term threat to the hospitality and tourism industry

Jobs in the hospitality and tourism industry are demanding and typically known for irregular and long working hours. Still, workers in this sector usually earn minimum wages. Moreover, the frontline employees are expected to provide exceptional customer service even when they find themselves exposed to an abusive situation by “uncivilized” consumers. It is not surprising to see that some hospitality workers who were laid off or furloughed during the pandemic would have moved to other sectors. Plus, people might have formed different perspectives of family, life, and work after the pandemic.

Now that almost every industry is facing a challenge to fill the vacancies, businesses across the board have increased wages and offer sign-on bonuses to lure workers. A local bus company in Connecticut, for example, is now offering a $7,000 signing bonus for school bus drivers. Because the customer service skills built up in hotels or restaurants are highly transferable, why wouldn’t the hospitality workers consider the ample attractive opportunities in the market?

Hospitality workers are leaving the industry

A recent survey with about 13,000 job seekers by Joblist, an employment-search engine, reveals a few alarming challenges facing the hospitality and tourism industry. For example:

  • Over 50% of U.S. hospitality workers would not go back to their old jobs.
  • Above 1/3 would not even consider returning to the industry.

When they were asked the reasons why they were switching to other industries, they cited the following:

  • Different work setting (52%)
  • Higher pay (45%)
  • Better benefits (29%)
  • More schedule flexibility (19%)
  • Remote work opportunities (16%)

What can be done in the hospitality and tourism industry to address the labor shortage?

First and foremost, companies should listen to the workers and see what they want and dislike about their jobs. Referring to the above Joblist survey results as an example, it is good that many hospitality companies have already increased wages and benefits for their employees.

Then, it is unrealistic to expect hospitality companies to let all frontline employees provide customer service remotely while staying at home. Yet, companies may consider redesigning the existing job functions by creating a “fun” work environment and offering flexible schedules.

Lastly, it is essential to restructure the service process with as much automatic service as possible. The time has come when automatic self-service is more acceptable among consumers. Plus, machines might just be an excellent solution to the labor shortage and soaring labor costs.

Are people in luck if they are looking for a career opportunity in the hospitality and tourism industry?

Probably. The work-from-home and flexible work schedule have made it easier for workers to arrange a job interview. Job candidates might also be in a better position now when negotiating the terms with a prospective employer.

Meanwhile, it is crucial to acquire the skills needed in the future work environment. People are expected to work side-by-side with machines to deliver exceptional outputs at work.

In the end, I recommend that people who want to quit their jobs right now consider if they have already secured a better or equivalent offer from another employer. It is wise to have a job while looking for a job, in my opinion.

Do you believe labor shortage is a short-term issue or a long-term threat to the hospitality and tourism industry? Why? What suggestions will you make for businesses to cope with such a challenge?

Note: This viewpoint was first published on Multibriefs.com; The picture was downloaded from KTLA.com

Comments

  1. For close to 18 months now, the world has been grappling with the economic effects caused by Covid 19. The hospitality industry was one of the most affected because people can hardly work from home and most staff are underpaid yet operate on very tight schedules. As a result, most of the team have been quitting and settling for jobs that pay them well and at the same time enable them to work remotely. This has left the hospitality industry grappling with a shortage of staff. This shortage is likely a long-term issue because most of their team have found well-paying jobs with favorable terms elsewhere. Its high time that these hospitality industries devise other strategies for coping with this shortage because things might never get back to normal.
    Yushen Wang HRT3500.03

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  2. I believe that this labor shortage is in fact going to be a big problem that we are going to be facing for a while in this industry and there is one big reason. It’s the fact that people that people who used to work in the industry took the pandemic and closures as a way to change industry’s and try something new, anywhere from office jobs to any other demanding jobs that pay better and offer better hours and better benefits. There are a couple things that are going to need to happen to draw people into this industry, from getting young job seekers, and using technology to recruit them along with some other key differences. For one the wages are going to need to go up, which we have already seen at many places even including fast food, another main difference will be the flexibility that needs to be offered in the way that makes people’s lives more livable especially those raising families with younger kids. Overall, this industry is impacted due to the labor shortage, but over time and with some key differences the future will be brighter.

    Matthew Capodieci 3500.01-1

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  3. The impacts Covid-19 will have on the hospitality industry will affect them for years to come. Because of this impact, those working in the industry are faced with a hard decision to stay and pivot along with the changes or search for work elsewhere and possibly even in an entirely new career. Working from home and other opportunities have presented themselves and the hospitality industry is too familiar with the close contact with guests and working overtime. There are many situations we could not have predicted and with this unpredictability, employees look for work more stable and flexible with their schedules.

    Emily Lebs HRT 3500.03-1

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  4. Coivd 19 has affected many areas of the workforce, but I do believe that it has hit the Hospitality industry the hardest. I believe that this is going to be a long-term problem for this industry. I can see this trend continuing because of the shortage of staff causes the current working staff to work tight and long hours. This might even cause the current staff to leave for better hours, better pay, and better hours. Since people can see that other jobs offer a better working environment it makes sense why they would not be willing to go back into the Hospitality industry. I think that employers are going to need to think of ways to keep their current employees and also bring in new ones. A good place to start is raising the pay. People are not going to want to work these longer hours for minimum wage. I think another way for businesses to help keep and bring in employees is to offer more flexible schedules.

    Michelle Heredia HRT 3500.01-1

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  5. I believe that the labor shortage issue is a long-term threat for the hospitality and tourism industry. With more available jobs than people looking for jobs, it leaves a very large gap that will be extremely difficult to fill. It is also a long-term problem because of the length companies are having to go to in order to entice people to work for them. Offering a few thousand dollar signing bonus is obviously not ideal for a company. Some employees are also sure to take advantage of the company and only work long enough to receive their bonus and then quit. I would suggest to hospitality businesses to focus on improving their work environments. People want to have good benefits, but they also want to work in a position and location that they enjoy. Creating positive environments to work in would improve job retention and increase job applications for new employees.

    Harry Law HRT 3500.03

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  6. This labor shortage is not going to stop any time soon. During the pandemic, a lot of hospitality employees as well as other employees in different industries had time to think over their employment situations. This included the type of job they were working and the amount of money they were paid doing these jobs. Minimum wage was not cutting it for some of these workers. So, when businesses started to open a lot of workers did not come back to their original jobs and went to find jobs that offer better pay with better benefits. I will say that the hospitality industry was hit a little harder than other industries. Most notably in the food and beverage side of hospitality like fast food chains and sit-down restaurants. It seems like no matter what fast food or sit-down restaurant you go to there is always a help wanted sign out in front of their establishment. I think in order to lessen employee shortages companies must start providing better compensation and provide a better work environment.

    Johanna Aguirre HRT 3500.2

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    Replies
    1. Hi Johanna I could not have agreed more with you. It is so sad that the hospitality was heavily impacted by the pandemic. In the beginning of the pandemic I had no faith and believed we would never recover from this. A year later I noticed that we can recover because people are so excited to travel more and explore the world. It does saddens me to see a lot of restaurants being short staffed though. It is hard to recover from the past. I understand how employees are scared to come back because during the pandemic, owners and managers did not have an option but to cut down pay roll expenses. I like to believe that there will be an upside to this shortage. One of the benefits is EDD is no longer supporting unemployment due to the pandemic, which will allow more people to apply in the work force once again.
      Laura Soesanto HRT 3500.01

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    2. The economic impact due to the pandemic is adverse. The most affected sector is hospitality and tourism. Despite the opening of the economy, people re not freely travel for business and leisure. Due to shortages of staff, there is low performance in the hospitality sector. After the pandemic, the employees who left their jobs may not be willing to return. They can look for job opportunities in other sectors that may offer better wages and a flexible working environment. The continued shortage of staff in the hospitality industry is worsened by structural issues such as long working hours and a challenging environment. In addition, shortages of staff can be due to low wages and non-recognition by the organization. Therefore employees will opt to find better job opportunities. Industry players should be innovative in structuring their work environment and reviewing the staff wages to prevent staff shortages.
      HRT3500.01- Evelyn Liu

      Delete
  7. The worldwide impact of the pandemic in the last two years will not allow the economy to get back on track anytime soon. As we all know. Since the pandemic began, the vast majority of workers have lost their jobs and the vast majority of businesses have gone bankrupt and closed for good. I believe labor shortage is also a big problem all over the world. In fact, since the impact of the pandemic and the closure of public places in the past two years, people in different industries and professions have changed their ways of working from face to face. People are reluctant to return to the hospitality industry because they see other jobs as offering a better environment, just as it is normal for schools to switch to hybrid education and work from home. So if the Labour shortage is to change, companies must start offering a more flexible and secure way of working.
    Siqi Li HRT 3500.02

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  8. I believe that this labor shortage is going to be a long-term threat to the hospitality and tourism industry. During the pandemic, many people in this industry were laid off of their jobs and were jobless for a large amount of time. While these people were unemployed, they had a lot of time to rethink their life decisions and the jobs they had. This caused many people to quit there jobs in the hospitality industry because they realized that it wasn't worth it to go back when you take a look at the amount of labor being put in and the amount of money you are actually being paid. Many of these workers had the chance to explore their interests and think about what kind of jobs would be better for them. I feel that since many hospitality companies are short on staff right now, those who are employed still will be working a lot harder to cater to customers needs, causing these employees to become exhausted and end up having the same kind of thoughts about leaving the job. Until we can come up with a way to make employees want to stay and realize that it is a great job for them, I feel that there is going to be a lot more people leaving hospitality and tourism jobs than there will be people applying for these jobs.

    Amber Sepulveda HRT 3500-01

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  9. The labor shortage that multiple industries are facing because of Covid 19 in really disheartening and many hope that it won’t turn into a long-term effect. I’ve seen it recently at my gym, the workers there are very understaffed and have often heard them complaining or talking about how difficult the job search is right now. The last year and a half, the hospitality industry has been hit hard with the aftermath of the pandemic, and the numbers cited in the article of how many workers have left their work is unnerving to see. Though, my time working during the pandemic has been a lot harsher of an experience than it was before, so I understand that it probably has been similar for many other people.

    Leslie Trent HRT3500-03

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  10. I do believe that the shortage of labor is going to be a long-term issue for the hospitality and tourism industry. Hospitality workers also had a difficult time during the pandemic due to everything shutting down, which then lead to a lack of work, causing them to lose their jobs. Most of these employees most likely refused to go back to the hospitality industry because they do not see the worth of working for a demanding job for long hours just to get paid a minimum wage. A lot of these workers are realizing that the job they are performing is worth more than a minimum wage. Hospitality businesses should start raising wages, be more flexible with work hours, and don't overwork their employees.
    Mishelle Carmona HRT 3500.01-1

    ReplyDelete
  11. It is a shame that the Hospitality Industry has been on the rocks for a while now. Since the shutdowns from Covid-19 the unemployment rates have raised, and hotels/restaurants have been suffering due to the labor shortage. As things slowly start to come back, many businesses are noticing the high levels of turnover. In my opinion I do not believe that labor shortage will be a long term threat. Yes it will take time for things to return to the way that they somewhat were. That is not to say that it will affect the industry for forever. Many people are starting to feel the need of having a dependent job, as well as adding to their resume. In the hotel I work at we are slowly starting to build a dependable staff once again, many of the new hires let us now that they applied because, they need an income, they need something to do instead of just being home, etc.
    Destiny Valdes HRT 3500.03-1

    ReplyDelete
  12. Manuel Solorzano HRT 3500-02November 15, 2021 at 11:25 PM

    It is clear to me that this labor shortage will be a long term issue that the industry will have to contend to. In 2020 the pandemic caused workers to begin to question if if was worth the stress and long hours to stay in the industry with more added challenges. Hotel corporations like Hyatt and Marriot let go of hundreds of full time and part time workers in its corporate offices and hotels. I would argue that in time of most need the companies let go of workers without much regard for their well being. It is easy to argue that companies were looking out for the extreme shrinking of their bottom line. At the end of the day, the business must survive and layoffs were the only way. However, the consequence of not doing more for your workers is they might not return because they felt easily replaceable. The worker now hold the power in choosing their employer and I have no issue with them leveraging it. In order for businesses to cope with this problem there needs to be a culture change in the industry in how it treats employees let go and they benefits it provides them. In 2020 we say a plentiful amount of aid dispersed to large hotel organizations that they could of used to retain workers. It is imperative that hospitality companies show the importance of its team members by offering more benefits, reducing workplace stress points, and being forthcoming to their employees about their actions. Last year it was companies turning its back on employees, so they should not be shocked that the tables have turned today.

    ReplyDelete

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