Labor Shortages, Low Tips, Burnout: Can We Turn The Tide for Frontline Hospitality Workers?

Hospitality is facing a host of issues across the world, from labor shortages and burnout to outdated training programs and shifting customer needs. In the United States and the United Kingdom specifically, frontline workers and managers are struggling with these challenges, which threaten their well-being. I’ve personally had a front row seat to these challenges over the years as the CEO of a company deeply seated in the frontline training industry.

A recent survey by Axonify of frontline hospitality managers in the U.S. and the UK, uncovering a variety of problems that are putting both employees and managers under significant pressure.

Let’s take a deep dive into the factors impacting current hospitality workers and what they mean for the industry moving forward.

Lower Gratuities Are Affecting Employee Morale

For many frontline hospitality workers, tips are not just a bonus they get on top of their typical wages – tips make up a solid chunk of their monthly income. Given the rising cost of goods and fluctuating economy, however, consumers are leaving less and less across the industry, signaling that consumer behavior has shifted. This trend is hitting workers hard, exacerbating the financial stress many already feel due to low base wages, and is certainly a factor for the recent rise in employee dissatisfaction overall.

Our survey found that a noticeable drop in guest tips is creating financial strain on workers who are already dealing with high stress levels and heavy workloads. In the U.S., nearly a third (61%) of hospitality managers have observed this drop in gratuities. This trend is leading to a cascade of negative outcomes, including increased turnover, as nearly half of workers have left their jobs and many others are abandoning shifts early. There is also the emotional strain as a substantial number of employees report experiencing emotional outbursts (i.e., crying or yelling) and a trend of workers turning to social media to vent their frustrations.

Guests, too, are contributing to the strain. With rising expectations and unpredictable reactions, they are making an already difficult job even harder. Tips have traditionally served as a form of immediate feedback for workers and when tips decrease, it can feel like a personal failure. This is true even when the real issue might be beyond the employee’s control. This can erode morale and contribute to burnout among employees and the managers who support them.

Even further, a significant portion of managers report having to expel or ban guests due to poor treatment of staff, while others are caught in the middle of escalating conflicts between guests and workers over tipping issues. This volatile environment is leading to widespread burnout, affecting both frontline workers and the managers who support them.

Managers and Workers Are Burnt Out

Burnout is present across many industries, including hospitality, however, some would argue that the current hospitality environment has accelerated burnout to new levels.

Burnout is defined as a physical or mental collapse caused by overwork or stress – and it’s becoming increasingly common among frontline workers, fueled by a variety of factors including chronic stress, understaffing, long hours and an overall lack of support for managing pressures. It’s more than just a feeling of tiredness and it impacts employee engagement as well as productivity. In the U.S., 47% of frontline managers report experiencing burnout themselves, and 68% say their employees are feeling similarly overwhelmed. Meanwhile, in the UK the situation is similar, with 50% of managers experiencing burnout and 62% observing burnout among their staff.

Frontline hospitality employees today are up against shifting customer demands and expectations as well as problem-solving pressures that can lead to extreme levels of stress. When companies are experiencing a smaller employee count, existing workers are tasked with taking on the load, potentially causing strain and additional stress.

Long working hours further disrupt work-life balance, contributing to physical and emotional exhaustion for workers. For example, U.S. managers have reported a noticeable drop in productivity (56%) and a decline in customer service quality (43%) due to burnout. In the UK, 54% of managers have lost workers to burnout, and 44% have seen a decline in the quality of guest service.

Some view burnout as a personal issue, but at its core, it’s really a business problem. It’s simple – employees that are burnt out are less engaged and productive overall, meaning they are more likely to make mistakes in the workplace. Burnt out workers are also more likely to leave their jobs, further contributing to the worker shortage and creating a cycle where the burden on remaining employees will only grow - leading to additional burnout and turnover.

Labor Shortages Are Fueling Workforce Issues

When people think of “hospitality,” they usually imagine the energy and dedication of its frontline workers – those who greet guests with a smile, answer questions, and ensure that customers are having a great experience and creating core memories. However, today the industry is facing a shrinking workforce, a common thread across both the U.S. and UK hospitality sectors. In the UK, more than half (53%) of hospitality managers report that staffing shortages are significantly impacting their operations.

This issue is mirrored in the US, where similar concerns are raised, exacerbated by factors like reduced tipping and rising burnout. The root causes of these shortages vary, with UK managers pointing to the long-term effects of Brexit, while U.S. counterparts cite a challenging job market and fluctuating guest behaviors. Some workers also likely leave due to wanting a better work-life balance or they are tired of the long working hours and high stress that come with the job.

The shortage is more than just numbers. It’s a symptom of a deeper issue within the industry. Workers are being asked to do more with less – longer hours, more responsibility and growing and expanding job responsibilities. This increased workload, coupled with the pressure to maintain high standards of customer service, is leading to significant issues for workers. When companies have fewer hands on deck, the quality of service suffers and ultimately will impact their bottom line.

Training Gaps Are Leaving Hospitality Workers Ill-Equipped

Another issue impacting the industry is the current gap in training programs. Training programs, which should serve as a buffer against these challenges, are falling short, often creating a disconnect between the skills frontline workers possess and the expectations they attempt to meet. Many are outdated, inaccessible, and ill-equipped to prepare employees for the realities of today’s hospitality landscape.

In the UK, 20% of managers report that their current training programs do not effectively engage or motivate employees. Plus, 45% believe that employees frequently encounter situations where they feel unprepared due to inadequate training.

Considering how fast-paced and customer-centric the hospitality industry is, employees must be able to act quickly on their feet in a variety of scenarios, as well as handle them with a strong comfort level. When workers aren’t trained on how to properly handle all the aspects of their job, it not only impacts their confidence and job satisfaction, but also the customer experience. Addressing these training gaps is essential for fostering a more competent, engaged and motivated frontline workforce, while at the same time empowering employees to excel in their roles and still deliver a high-quality customer experience.

Hospitality Leaders Must Adopt A Multi-Pronged Approach

These findings underscore a broader, systemic issue within the industry. It’s not just about the immediate symptoms of reduced tips and burnout - the underlying challenges are more pervasive. Managers are facing a daunting task: they must navigate an environment where technological advancements are reducing the skill requirements for certain jobs, while also contending with the increasing demands of both employees and guests.

When looking for where to start, companies should look to a few key areas. First, invest in training and development. Training helps workers feel confident and learn the skills needed to do their jobs to the best level possible. This helps workers stay engaged and motivated to do a good job in their role. Second, companies should create a supportive working environment where workers feel valued and heard. This is incredibly important and can involve implementing flexible scheduling, providing access to mental health resources or simply encouraging an environment where workers can easily and safely voice concerns.

By starting with these core areas first, companies will be able to create a more resilient, sustainable work environment that not only meets the needs of today’s workforce but also elevates the overall guest experience.

Defining The Path Forward

Every industry faces its challenges, but like any challenge, these can be overcome with the right measures in place. The path forward begins with companies acknowledging and identifying what the challenges are for their workforce and what solutions exist to help them overcome those challenges. In doing so, they will create a more resilient and happy workforce, full of employees that know how to do their jobs and are provided with the appropriate training to help them succeed.

Frontline workers are the backbone of the hospitality industry and the time is now for companies to turn the tide for the better.

Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.

About Axonify

Axonify is the proven frontline enablement solution that gives employees everything they need to learn, connect and get things done. It starts with brain science and AI to drive knowledge retention through bite-sized microlearning and daily intelligent reinforcement. Embedded two-way communication and feedback ensure your staff is engaged and informed, no matter the scale of your organization and guided task management shows employees exactly how to put their training to use, every single day. With an industry-leading 80% user engagement rate, companies use Axonify to deliver next-level CX, higher sales, improved workplace safety and lower turnover. Axonify enables over 3.5 million frontline workers in 160+ countries, with over 250 customers including Lowe's, Kroger, Walmart and Citizens Bank. Founded in 2011, Axonify is headquartered in Waterloo, ON Canada. For more information, visit axonify.com.