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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?

Linchi Kwok
Professor at The Collins College of Hospitality Management, Cal Poly Pomona
CAL Poly Pomona