Delivering Service in a Labor-Scarce Economy

By Mark Heymann Chairman & CEO, Unifocus | January 20, 2019

With unemployment holding at historically low rates, hospitality and food service are among the industries most affected by the labor shortage, according to the Bureau of Labor Statistics. The immigrant workforce, a vital source of labor for the hospitality industry, is being impacted by a government crackdown at a time when the U.S.-born population is aging and shrinking. Adding to the challenge is that with job opportunities outpacing available labor, more workers are targeting higher skilled (and higher paying) positions, leaving lower-paying service jobs unfilled.

For hotel operators to continue to meet guest expectations with lower staffing levels, ingenuity will be required, from rethinking how service is delivered to considering nontraditional labor sources that can be trained for hospitality work. And, they will need to examine how a lower-paying industry can attract a larger percentage of the shrinking labor pool.

Raising Wages While Minimizing Impact

Is it possible that the labor shortage could spur the industry to raise average wage rates? Most people assume that a wage increase automatically means a raise in base wage rate. This is not necessarily the case. The use of pay-for-skill and performance pay can increase wages while limiting the impact of the higher net wage on the organization. Pay-for-skill can be implemented in conjunction with cross-utilization, thereby reducing time lost due to minimum shift requirements.

This creates a job enrichment culture (improving engagement) and reduces the number of full-time employees, effectively reducing total benefit costs. A pay-for-performance structure can measure aspects of an employee's job, like quality results, shift production, and other individual or team metrics. This approach, sometimes called gain sharing, assures that as the employee's compensation increases, there is a direct benefit to the organization.

A Shift Toward Self-Service

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Coming up in March 2019...

Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.