People
The workforce challenge facing the U.S. hospitality industry shows little sign of abating, especially in the lodging sector, with evolving immigration policy adding another layer of complexity. The industry’s historical reliance on immigrant, seasonally mobile labor places a premium on proactive efforts to identify the disruption from emerging policies.
There are around 14.3 million workers in the U.S. hospitality sector, according to government data, with more than 80% in food and beverage service and the balance in lodging. The 960,000 sector job openings at the end of March represented 6.2% of the workforce, well above the average for all other industries. Unemployment in the lodging sector dipped to 4.8% in March and has been broadly trending down for two years. Overall employment levels are still 9% below pre-pandemic levels.
The impact of further reductions in the workforce increases the potential for operational disruptions and negative customer experiences. This would undo some of the benefits accrued over the past two years from improved wages and benefits.
Working the line
Many of the strategies to improve workforce resilience have been refined since their initial deployment during the pandemic, aimed at reducing overall labor needs while improving efficiency.
Pared-back menus focused on core items, as witnessed at Chipotle Mexican Grill and others, reduce preparation and training time. These efforts also reduce food waste and streamline operations, leading to cost savings and improved efficiency.
Increased automation and self-service options such as ordering and check-in kiosks. Workers, like management, see promise in tech-enabled processes. Almost 9 in 10 respondents to the U.S. Restaurant Worker Survey said new technologies in the restaurant have positively impacted their job duties and responsibilities.
Enhancing training and development programs to improve employee retention and productivity can reduce dependency on a specific labor pool. Noodles & Co. enhanced its restaurant employee benefits to include mental health counseling and other services and contributed to a sharp fall in hourly employee turnover.
Explore alternative recruitment strategies beyond wages and benefits that can attract a broader range of candidates, including local talent and underrepresented groups.
Operating changes include separate queuing of dine-in, mobile, and drive-thru orders, as well as dynamic staff scheduling and adjusting hours of operation to match customer demand and reduce labor costs.
Keeping it sharp
Hospitality business owners and managers can deploy a range of tools to navigate current challenges and build a more resilient workforce.
AlixPartners’ industry experience and proprietary insights can provide a path to improve recruitment and retention. There are clear benefits from harnessing technology to mitigate the industry’s long-standing labor shortages.
