Staffing shortages persist despite hiring efforts, record wages

At the start of the year, the U.S. Bureau of Labor Statistics released a report showing the overall economy added 517,000 jobs. The leisure and hospitality sector accounted for about 25 percent of that, adding more jobs than any other sector. At the same time, the industry had 2 million open jobs despite returning to pre-pandemic employment levels, according to the U.S. Travel Association. What’s more, while many industries have recovered their workforce, the leisure and hospitality sector is still about half a million employees short of where it was before COVID-19.

Further research from the American Hotel & Lodging Association shows that 79 percent of hoteliers report staffing shortages. As a result, 71 percent of hoteliers are increasing wages, 64 percent are offering more flexible hours and 33 percent are expanding benefits. Yet, 81 percent of hoteliers are still unable to fill open positions, according to the AHLA.

“People left our industry over the last three years when they were forced to, and many are not coming back when there are many options and jobs available,” said Laura Presnol, VP of talent and culture for Davidson Hospitality.

“I think the labor shortage is our new reality,” said Bob Habeeb, CEO at Maverick Hotels and Restaurants. “As seasonal demand grows later this year, we will again be facing acute shortages.”

Trying to fill the gaps can prove almost impossible. Turnover, which is already historically high for the industry, has become even worse now, according to Dan Paola, VP of operations at Raines Co. “You always had turnover or hotel hoppers. But now you’re pulling in people from different industries, maybe warehousing or retail, and they think they can do housekeeping or the front desk. It’s a big jump. People don’t recognize what they’re getting into,” he said.

New Talent

Labor challenges are leading to new career opportunities for hotel employees, especially when it comes to wages. As of December, national average hotel wages were at all-time highs of more than $23 per hour, according to the AHLA.

In a survey conducted by Instawork’s Economic Research Division, 52 percent of hospitality businesses will raise wages to attract and retain workers. And 73 percent of those who said they’d increase pay already did so by $2 an hour or more in 2022.

But hoteliers shouldn’t put all their eggs in the “higher wages” basket. As the data show, wages alone won’t fill all the open jobs for the industry. “It’s about culture and engagement. You need to give people a great place to work,” Paola said. “Wages can only go so far. What are those other things that employees want?”

To find out, Paola said Raines is making use of employee engagement surveys to measure and find opportunities and make sure employees are getting the right training and have the tools and resources necessary to do their jobs. Raines has also implemented daily pay so employees can access earned income the day of or the day after, which Paola said has been a selling point for team members.

“People look at jobs today as a commodity, which is easily replaced. To win the retention battle, employees must feel a sense of belonging and purpose,” Habeeb said. “It’s all about relatability and authenticity.”

Davidson’s Presnol said the hotel industry is now competing with remote roles, gig shifts and other positions that might have a more surface-level appeal: “It continues to be a challenge to convince those that have not tried the hospitality industry to join. There is a perception and, quite frankly, a history of not being flexible with schedules, not being competitive with compensation or creative with benefits.”

Filling the Gaps

Sources said that service is the biggest gap to fill right now. That’s not just because it’s more difficult to find front-line employees today, but also because there’s a lack of skill out there.

“It’s finding people who genuinely care. You can’t teach caring, and you can’t teach genuine human connection,” Paola said.

The industry has surely changed, and Presnol said hoteliers need to have an open mind and be more forward-thinking about operations. “You have to be open to people that have not worked in hotels,” she said. “If you do make that commitment, it goes even deeper. It now involves the greater commitment to onboarding them and training them for success. It is not plug and play. It is committing to giving them knowledge, building their confidence and, in turn, it will win over their loyalty.”

Paola said that while tech and automation will continue to find their way into the industry to help fill some labor gaps, it’s also essential for success to engage employees early on because tech can never be a replacement.

“You have to hire for personality over experience. You have to show them you can make a great career in hospitality,” he said. “We have so many stories of people starting in housekeeping and are now in the corporate office. We need to tell those stories, especially early on in orientation.”

Presnol said hoteliers should stay focused on internal talent and succession planning. “Focus on the careers that can be built from the ground up. Our CEO got his start as a bellman,” she said. “There have to be bellmen in our hotels today that will be the future CEO. It just takes someone to be focused on building an internal bench or taking that bellman under their wing.”

At the end of the day, Paola said hoteliers need to work to adapt. “Too often we’re thinking about how people need to adapt to us in the workforce. Now it’s about taking the focus off that and asking how do we adapt to bridge the gap.”