The hospitality industry—the people business—has a people problem. The industry continues to struggle with a growing pool of open positions and high turnover as the U.S. unemployment rate hovers around 4 percent. According to experts, this issue could be solved by educating young workers about the opportunities hospitality offers, but fears of automation have complicated the situation for line-level employees.
“I wish I could say I have seen a lot of bright ideas recently, but no one has showed me they are doing something extraordinary to attract people to their organization,” said Keith Kefgen, managing director/CEO of hospitality advisory firm Aethos Consulting Group. He said that low unemployment figures and the approach the Trump administration has taken toward immigration has impacted efforts to acquire new line-level workers. This situation is unlikely to change until a downturn occurs and impacts the existing workforce, but the overall impact of such an event would be hard to foresee.
Instead, he suggested the industry is better off seeking out managers-to-be, and starting while they are young.
“The earlier you can get to people the better,” Kefgen said. “I would be recruiting at high schools if I was interested in attracting line-level employees. The other thing I would do is sponsor events, whether social, sporting or otherwise, to build a rapport with young people. You want to show them the industry has some upsides that come from a long-term career and that progression is possible.”
Millions at Work
“The hospitality industry is gigantic for job creation,” said David Morrison, principal at Chicago-based corporate law firm Goldberg Kohn. “It’s an industry that promotes from within … and our country is very much dependent on that kind of job creation to help the economy.”
The hotel industry currently supports 8 million jobs, and added roughly 188,000 jobs over the past six years. However, automation is a growing presence in hospitality, beginning with check-in kiosks that eliminate the need for multiple front-desk workers. While it is difficult to imagine a world where a hotel is run entirely without humans, it is clear that some jobs are already becoming expendable as automation is deployed.
Kefgen said automation’s place in hospitality is a nebulous one, but some hotel workers are more vulnerable than others.
“As an employee in a select-service, low-touch hotel I would be very worried about technology replacing me,” Kefgen said. “Why would I need to go to the front desk at that hotel? I can get my key right on my phone, so who do I need to speak to? Travelers go to a resort for a socialized, communal environment. There you expect interaction. I don’t see a machine able to give guests a massage, take them on a tour or play golf.”
Liz Washko, shareholder in the Nashville office of labor and employment law firm Ogletree Deakins, said automation has already been an effective tool for keeping labor costs down in the restaurant industry. Many restaurants use tablets to take orders while humans prepare and deliver the meal, cutting out an entire role. In addition, kitchens across the country are experimenting with automated tools for slicing and preparing ingredients, which could work in much the same way.
“There is definitely going to be automation in hotels and restaurants in the future, and not just as a way to keep costs down,” Washko said. “Depending on the type of restaurant, there will be certain levels of hospitality that require different levels of human interaction.”
Washko also pointed out that hospitality’s high turnover rate can impact hotels’ ability to improve their workforce. This turnover, mixed with pay scales that vary greatly based on employer and location, can lead to confusion and impact hotel employees' future job searches. However, Washko said some companies have taken note and adapted their retention efforts by providing rewards such as student loan relief in order to retain workers.
“Employees going to cooking school or getting hospitality degrees may find opportunities through their employer to pay for such programs,” Washko said. “The way it is provided, the benefit is paid out over time to assist with retention. So, consider other alternatives aside from compensation, which may assist with other areas of an employee’s life and may help you retain some loyalty.”
According to Kefgen, however, the hospitality industry still has a long way to go if it wants to attract true long-term talent.
“I see a lot of people in our industry talking about people issues, but I don’t know if I really see the kind of commitment needed to accommodate them,” Kefgen said. “When I first got into this business, it was an operator’s business. Operators get it; it’s still the people business to them. Institutional investors may talk about needing good people, but their actions speak more to increasing real estate value and making money on deals. They are talking cap rates, financing and transactions; they aren’t really talking about people.”