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Leisure and Hospitality Industry Talent Shortages

The COVID-19 pandemic had a staggering impact on the hospitality industry, as travel, tourism, and dining all ground to a halt in 2020.

More than two years later, the industry has begun to recover, but challenges remain, particularly in regard to staffing. People have returned to traveling and dining out, but hotels, resorts, bars, and restaurants are struggling to find and retain workers to keep up with demand.

The hospitality industry encompasses a wide range of roles inclusive of many skill sets and educational backgrounds. The industry employs hotel managers, chefs, bartenders, event planners, maintenance technicians, spa managers, concierges, housekeeping, and front desk clerks, in addition to accountants, human resources professionals, sales, marketers, and administrative staff, among others.

Nearly 20 percent of the leisure and hospitality workforce are not high school graduates, and more than half have a high school degree or less, according to the U.S. Congress Joint Committee on Economics.

But these days, hospitality workers are in short supply.

Wages rise as job demand outpaces supply

Leisure and hospitality (L&H) employment is still 7.1 percent below pre-pandemic levels–the equivalent of 1.2 million jobs–according to an August 2022 report from the U.S. Travel Association. While this is an improvement from April 2020, when L&H employment dropped to approximately half of pre-pandemic levels, the industry continues to lag behind the rest of the private sector.

The problem certainly isn’t a lack of jobs. The L&H industry had more than 1.4 million openings nationwide in June 2022, accounting for 14 percent of all available jobs in the U.S.

To entice prospective employees–and retain existing staff–hospitality employers are raising wages at unprecedented levels. The U.S. Travel Association reports that L&H wages have grown by 21.7 percent since 2019. Average hourly earnings for L&H workers fell to $17.12 in December 2020, when many restaurants and hotels were struggling to stay above water, and rose to $20.22 in July 2022.

Catering to Gen Z

Increasing employee pay won’t be enough on its own to fix industry-wide staffing shortages, however.

“The events of the last few years have changed people’s attitudes toward work. Not every role in the hospitality industry can be done from home or between the hours of 9 and 5,” said Judy Walcott, Vice President of Client Delivery at Broadleaf Results. “Pay is and always will be an important part of the equation, but workers today also desire flexibility and autonomy. Employees retained during the pandemic are experiencing high rates of burnout and industry leaders must find a way to make these workers feel valued and help them achieve work-life balance.”

L&H employees also tend to be younger–another factor employers must consider when thinking about talent acquisition. Pre-pandemic, more than 60 percent of workers in the industry were below age 35, compared to just over 30 percent of workers in other industries. Approximately 13 percent of the industry is under 18.

Employers across all industries are adapting their hiring and retention strategies to attract Generation Z workers. Beyond flexible work arrangements, businesses are turning to creative employee perks, like financial planners, offering hiring and retention bonuses, and creating opportunities for career growth and upskilling.

“It’s a candidate’s market out there, and the hospitality industry has got to get creative with selling themselves to employees,” added Walcott. “Employers must focus on finding staff, creating a great employee experience, and being as flexible as possible to retain them.”