I suspect there is not a person in our industry who is not well aware that we are experiencing the most significant crisis regarding human capital our industry has ever faced.
It is a confluence of several factors, which were trending before our world was hit with COVID-19, and have now been exacerbated by the pandemic.
At the beginning of the pandemic, the unemployment rate for our industry was one of the highest, spiking nationally in the Accommodation and Food Services sector (within the Leisure and Hospitality "super sector") to 39% in April 2020. While continuing to trend downward since summer 2020, as of December 2021 the unemployment rate for this sector remained high at 7.2% vs. 3.9% for all industries, combined. In 2021, Leisure and Hospitality added 2.6 million jobs – the biggest increase of any sector – but employment is still down by 1.2 million from early 2020 (pre-pandemic) levels.
The Labor Force Participation rate continues to drop nationally, meaning the pool of available workers continues to decline. In 2001, 67% of the civilian population was participating in the workforce. As of December 2021, it had dropped to 62% and estimates are that it will continue to decline. Traditionalists (also known as the Silent Generation and the Greatest Generation) and Baby Boomers are aging out of the labor pool at a rate of an estimated 10,000 retirees daily across all industries.
Millennials currently comprise approximately 50% of the workforce and that is estimated to increase to 75% by 2025. Following closely behind them, of course, are Gen Zs. Both of these generations are focused on finding jobs with meaning, work-life balance, hybrid (remote work) flexibility, and their interpretation of adequate compensation.
All of these factors both amplify the candidate shortage in our industry, and will continue to impact how companies recruit and retain talent.
Rebuilding our industry's labor force is a key challenge in the hotel industry and for most organizations will dictate their success or failure, both short- and long-term. Statistically, it has been an uphill battle over the last several months. It comes as no surprise to most talent and human capital leaders that the highest and fastest-growing employment sectors, especially regarding hourly employment, would see the highest "quit rate". Historically we have always lost the largest numbers of new hires in their first 90-180 days. While there are a wide variety of factors that influence this trend, it is clear there is much more at work here than the pay and benefits the industry has to offer.
Being the fastest growing sector for employment in 2021 (rehiring close to 3 million people) with a challenging but predictably high "quit rate" helps put in better perspective the urgency of executing on new strategies for both associate retention and attraction. There are only so many people in any market willing and able to perform a job, no matter the nature, complexity, or qualifications required for the role. But as Albert Einstein wisely said, "In the middle of every difficulty, lies opportunity." It is up to us leaders in the hospitality industry to navigate the current human resources environment and find the silver lining of a path forward.
An article recently published by The Conversation, references what we have long found to be true: that turnover can be reduced by 1) giving associates a sense of purpose; 2) providing training and development, coupled with a sense of autonomy; and 3) providing better, more valuable benefits. But we've taken it a bit further.
Each company has its own culture – a combination of a guiding mission and an environment that has been established and evolved over years, even decades, of doing business. Our mission is to Serve People, Create Memories, and Deliver Exceptional Experiences. This mission embraces our 86-year history, a resilience in the past and present and future, and an enduring focus on our most important asset: our associates.
But culture is never static. Culture is responsive to internal factors such as the actions of leadership and associates, and to external factors such as the current economic, social, and political environment. Thus, culture is both enduring and ever-evolving. We see our culture through the lens of a Growth Mindset. To quote the HBR article, "Individuals who believe their talents can be developed (through hard work, good strategies, and input from others) have a growth mindset. They tend to achieve more than those with a more fixed mindset (those who believe their talents are innate gifts). […] When entire companies embrace a growth mindset, their employees report feeling far more empowered and committed; they also receive far greater organizational support for collaboration and innovation."
The result of a growth mindset approach is the ability to create a culture of trust, openness to conversation (and really listening), and sharing authentic expressions of appreciation for people's commitment and effort. Today's environment has created more focus on open conversations, allowing industry leaders and managers to learn how we can make people's jobs and lives better. Our stronger focus on listening has brought higher awareness to associates and their families dealing with trauma, loss, and often significant mental health issues brought on by the pandemic or other factors. Creating an internal portal providing access to employee assistance programs and mental health support has been a valuable associate benefit, as well.
HR leaders today are having more conversations than ever with associates about their families' health and well-being. Much of that has been around COVID, but these conversations also focus on having the financial means to provide for themselves and their family, general health and well-being, mental health challenges, childcare challenges with school closures, and more. For us, all of this is rooted in our culture of care (Serve People). After all, we are in the hospitality industry where the care-taking of our guests is a natural extension of our care-taking of our associates.
This is also a good segue to authentic appreciation. In our industry, and in our company, people are our most important asset and expressing this every day – as a company and individually – is so important for maintaining the tight fabric of our culture. For example, think of the incredible impact that saying "I appreciate you" has on the recipient, compared to the more common "I appreciate it" or, much worse, not saying anything at all. Try telling someone you appreciate them and you'll see for yourself.
Through the lens of a growth mindset, approached with openness and vulnerability, it is important that we remain open to associate feedback at all times. This can be accomplished through several forms. Routine and frequent verbal check-ins are key, as are open two-way conversations.
In addition, it is important that we monitor how we are doing through more formal structures, such as associate engagement surveys and exit interviews. These tools allow us to track trends and set strategic priorities to ensure alignment with our culture and mission. In 2022, we also plan to enhance the practice of conducting "stay interviews". As recently highlighted in a CNBC article, the concept of stay interviews is a counterpoint to the longtime standard of conducting "exit interviews". The focus in stay interviews is on "enthusiastic stayers" and on those who have now returned, often referred to "boomerang employees".
Why have associates stayed with your company over the years? If they were furloughed or had a reduction in hours, why did they choose to return/stay? If they left the company for a perceived "better opportunity", what was it that brought them back? Conducting stay interviews can help us identify company attributes that associates find highly desirable and have brought them back and/or kept them here, as well as learning about their professional goals and how we can best support their development and individual success.
Through all of our new learnings via active listening with a growth mindset, we have had to create new "muscle memory" to put that knowledge and understanding into action – basically, providing flexibility in an industry that is not so flexible. To illustrate, hotels and our industry, overall, operate 24-hours per day and 365 days per year, and we cannot welcome guests and clean rooms remotely. So, how do we adapt?
What has been dubbed the "Great Resignation" of 2021 has been redefined in an NPR: Planet Money article as the "Great Renegotiation". It is through this lens, with our growth mindset approach, we have flexed our approach to associate relations, compensation and benefits. A few of the new programs and offerings that we are considering and/or have introduced over the last year include:
Each of these addresses specific needs that our associates and candidates have shared with us.
I wonder how many readers will recall the quote from Stanley Kubrick's 1968 science fiction classic, "2001: A Space Odyssey" where the computer, Hal, develops his own decision-making framework, then refuses the human command: "Open the pod bay doors, Hal". This is an extreme example, of course, but certainly fascinating that director Kubrick saw a future in AI (artificial intelligence) over 50 years ago that is not-so-slowly becoming a staple of daily business today. When handling transactions online or by phone, I suspect you have encountered a "chatbot" when reaching out to your favorite retailer, bank, or service provider.
Today, hospitality companies are leaning into technology like never before. Instead of being concerned, as the industry was in years past, that tech would reduce the personal nature of delivering service, it is now wholly apparent that more tech is needed. I will point out that we never believe in leaning into technology simply for technology's sake, rather it is pursued to improve efficiency, ease pain points, and improve service delivery – for the benefit of both guests and associates, alike.
Some examples (out of many) of current "hot" industry technologies are robotic cleaning of guest bathrooms and public spaces to counterbalance the need for unavailable housekeeping labor and CRM tools that supplement applicant tracking systems to better manage the hiring and referral processes, which include AI functionality.
With all the aspects in flux regarding labor today, the central focus of our human resources team is ensuring that our hotels are always a welcoming and inviting place to work and to build a career for each of our associates – from longtime "enthusiastic stayers" to our new hires. Retention is always key.
It is an ever-evolving charge to stay current with changing needs – but it is less about following the headlines and is more about connecting one-on-one with individual associates and candidates – listening to and delivering on their needs. As well as demonstrating what we have known (and shown) for decades: that the hospitality industry is a place to grow a lifelong career, from entry-level all the way to the top. As referenced in the American Hotel Lodging Association Foundation's new national ad campaign, the hospitality industry is indeed "A Place to Stay".
Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com