The benefit wars are heating up among major employers as they try to overcome the labor shortage in advance of the holiday season. After laying off and furloughing employees during the pandemic, many companies have struggled to attract applicants as they attempt to restaff. Walmart kicked off the high-profile wage and benefit competition, announcing it would pay for college for eligible employees. Target soon matched this offer followed by Amazon announcing it was raising wages to $18 an hour and adding college tuition benefits.
While there haven’t been headline-making extreme raises, signing bonuses or benefit offers made by major employers in the hospitality industry, some companies have been making efforts. According to the Bureau of Labor Statistics employment cost index, wages and salaries in the leisure and hospitality industry grew 2.8 percent from the first to second quarter of 2021. This is the biggest growth from one quarter to the next that the industry has seen in a decade.
Benefits
But with the holiday travel season just weeks away, wage increases alone may not be enough to scale and meet the demand of seasonal travelers. Employment website Joblist found in a survey that 38 percent of hospitality workers were not planning on returning to the industry, citing a desire for higher wages and more benefits than the industry can support. About 45 percent said they wanted higher pay and 29 percent wanted better benefits. One in five said they wanted jobs with more flexibility and 16 percent said they wanted to work remotely.
One benefit that many job seekers want, the ability to work remotely, is one that hotels often are not able to supply. A lot of industries have been able to offer employees a hybrid working arrangement as a perk, where employees can work remotely some or all the time. However, the hospitality industry does not lend itself to remote working because most hotel staff need to be onsite to deliver a positive guest experience. Add to this the increased expectations of guests, having not traveled for most of the pandemic, and it is a very challenging environment for employers in the hospitality industry.
While it is harder than usual to find people interested in applying to work in the hospitality industry, employers are not completely out of luck. Remote work options are not the only benefit that job seekers are searching for today. In hospitality, employers rely on part-time workers due to the variable nature of the work, and offering traditional medical, dental and vision plan benefits has not made sense for both the employer and employees. In fact, offering a qualified medical plan to a part-time employee could disqualify them from low-cost or free medical coverage through government subsidized options. Instead of traditional benefits, employers need to recognize employees' needs for caregiving, mental health, vacation time, flexibility to care for elderly parents or children, education and a clear career growth path hold greater value for people today. More than ever, employees are looking for a place to work that offers them a sense of purpose and belonging, and this is something employers in hospitality can focus on without spending a lot of money on offering a new benefit.
Wellness Needs
One of the biggest changes in benefits for employees in the hospitality industry is employers recognizing the need to support employee’s mental health. More companies are expanding mental health resources and creating programs to remove stigmas and give employees greater access. The pandemic has caused a significant increase in mental health challenges, and some hotel workers are still dealing with the impact it had on them. According to the Centers for Disease Control and Prevention, 11 percent of adults reported symptoms of anxiety and depression between January and June of 2019. In December of 2020 that number had grown to 42 percent. Some of the most popular mental health benefits companies are offering are:
- Access to free counseling sessions or reduced copays for in-network therapy;
- Subscriptions to virtual counseling service apps; and
- Subscriptions to wellness apps for meditation, stress reduction, and improved sleep.
Childcare continues to be a challenge for employees this year. Even though children have returned to school, COVID cases among kids continue to rise and many kids are having to quarantine after being exposed at school. According to the Kaiser Family Foundation, during the pandemic schools and daycare closures forced close to half (47 percent) of working mothers to take unpaid sick leave to care for their children, and this number was even higher (70 percent) for mothers who had part-time jobs. In the hospitality industry, women were impacted more by furloughs and job loss than men.
Hotels should also expect to see an increased demand from employees for benefits that extend to family members. It is not just parents who have felt the squeeze of trying to balance work and care giving during the pandemic: Many working adults had to become caregivers for their elderly parents as well. For full-time workers, employers in hospitality should consider expanding their benefits to assist with elder and childcare, such as expanded employee assistance programs. And for part-time employees, offering greater flexibility for work schedules could help with these needs.
The full impact of the pandemic on the hotel industry is still unknown. It is an evolving situation and as a result, hotels must remain nimble and flexible, able to react as new challenges develop. As open enrollment season approaches, one of those challenges will be navigating the new normal of employee benefits. For the first time, enrollment could include part-time employees in some part of the benefit plans. This will require human resources departments and management to have plans in place to provide guidance and education and answer questions for more employees than ever before. Planning and developing solutions like online webinars and pre-enrollment meetings to go over enrollment information in segments instead of all at once will help streamline the process.
Doug Ramsthel is a partner and EVP at Burnham Benefits, a Baldwin Risk Partners Company.