Industry Update
Opinion Article13 October 2021

Hotels Have a Labor Problem. Is This the Long-Term Solution?

By Rayna Katz, Writer

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It’s been said that perception is reality. Under that maxim, hoteliers are feeling vexed by the labor shortage.

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But what if the issue of worker availability didn’t exist? Could recruitment and retention problems stem from how management interacts with—and treats—employees, along with some issues in the structure of industry work? Neel Shah, President at Hotel Evolution and Del Ross, Chief Revenue Office at Hotel Effectiveness, think so.

Show Them You Care

“There’s definitely a connection between a stable staff and an ownership presence,” Shah said. “I invest time and effort to get close to senior leadership, such as the executive housekeeper, and make sure they have the tools they need.”

Shah gets in the weeds on mop heads or broom handles, includes managers from other departments in creating standard operating procedures and, in a hypothetical example, said if a front desk employee were to request an expensive headset in order to take calls while making coffee for guests, he’s going to get it to them—right away. “If you’re trying to actually take calls while pouring hot coffee, I don’t want to come back to you with ‘hmm, maybe,’” he said.

Ross agreed. “If you track the last management touchpoint for an employee, you can predict turnover with great accuracy. It might be as simple as checking in after three weeks and saying ‘I heard from a guest last week how happy they were that the room was clean,’ or ‘you’re doing a great job, we’re boosting your pay by $1.50 an hour.’ We forget that $14.50 versus $13 makes a big difference for an employee’s family.”

Smart management of labor costs is vital. According to HotStats data, total labor costs as a percentage of total revenue reached 34.1% in the U.S. in August 2021; 28% in Europe; and, in Asia, they checked in at an even higher rate of 40.2% during the period.

The good news is that after a huge spike in labor as a percentage of total revenue, it’s now back to pre-pandemic percentages, evidence that hoteliers have taken better control of property cost structures. In the U.S., for example, payroll as a percentage of total revenue in August 2019 was 36.8%.

Timing is Everything

For filling some roles, and staying staffed, the magic cure for attrition might be as simple as adjusting schedules, Ross said. In a post-pandemic working environment, worker flexibility is high on the list with compensation.

“How we think of shifts is archaic; it hasn’t changed in decades,” he said. “Why do shifts start at 7 a.m. when activity at a hotel doesn't start until 10 a.m? People don’t want to start early because they have to get their kids to school. Also, we can clean rooms at night when people are available while their kids are asleep."

“We believe the problem isn’t a labor crisis. It’s a coverage crisis. We can’t cover the needs of the hotels and the guests, and we can’t cover the shifts. But this isn’t just about recruitment and wages, so it’s good for hotels to get off of the hiring treadmill and manage the business. That will make the jobs more attractive and convert people from being likely to take a job to being interested in a career."

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Rayna Katz

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