Published in Forbes - A new survey reports that more than half of U.S. hospitality workers aren’t going back to their old jobs, and a third are leaving the industry entirely. As service operators grapple with this unprecedented labor shortage, it has placed a glaring spotlight on another longstanding issue within the industry: meeting the diverse needs of the service sector’s employees.
Before Covid, when the industry had no shortage of workers, employers could avoid addressing the shifting needs of their employees; if someone left, another person was readily available to fill their shoes. But now, as employers desperately attempt to fill vacant roles and meet increasing demand, they can’t ignore the expectations of the modern workforce any longer.
The service industry has spent a lot of time and energy designing the ideal guest experience. With the days where uncontrollable turnover was a manageable business occurrence long behind us, employers need to design the ideal employee experience now more than ever.
Expectations Are Shifting
Millennials, who now represent 30% of the population, are changing workforce mindsets. Recent census data reveals that younger workers, possibly drawn by work and cultural influences, are continuing to migrate to city centers, becoming more educated and, as the economic gap widens, making traditionally milestone decisions like marriage and home purchases much later in life. While this information isn’t new, as the Millennial and Gen-Z populations begin to dominate the workforce, the splintering of the population will play an important role in the service industry job market.
Alongside the migration to city centers, public transportation is playing a more dominant role in young workers’ commute. As fewer millennials rely on cars for transportation, the number of people under 30 with driver’s licenses is on a steady decline, according to a University of Michigan study. Those who do commute by car, however, are reportedly carpooling more than their generational counterparts.
Introducing a labor system that takes the diverse needs of these emerging generations into account, such as shifting work commutes, can help service employers attract and retain employees in the younger workforce. Offering scheduling predictability, which is a key benefit younger generations now seek, can attract employees who rely on external modes of transportation and need to plan their work commute more carefully. In a fast-paced industry where scheduling predictability may be overwhelming for operators, smart forecasting tools can offer a competitive edge. Enabled by AI, these tools can automatically take carpooling employees into account and ensure they work the same shifts.
A distinct set of needs are arising with the increasingly younger population, and competitive options are emerging to address those needs. The service sector, which has long struggled with its employee retention efforts, will need to implement this and other radical changes to cater to the new workforce.
Service Workers Desire Flexibility
In meeting the diverse needs of the service workforce, the industry’s demographics offer vital insight. Women hold over half of all jobs in the retail, restaurant, travel and hospitality sectors, and the pandemic had a critical impact on working mothers.
The pandemic’s impact was widely felt for women, who represented 53% of all job losses in hospitality throughout 2020. Mothers with sole responsibility for child care subsequently increased from 33% to 45%, while men with sole responsibility for child care stayed at around 10%, according to a study conducted by USC. This unprecedented change in childcare means many women simply aren’t returning to hospitality, favoring workplaces that offer the ability to accommodate a flexible schedule or adopt more modern workweek schedules. A key opportunity may well be to look at longer hours per day, with a reduction in number of days worked, directly impacting child care costs as well as transportation needs.
Hospitality operators who have the technological resources available to meet changing workweek expectations, fueled by emerging labor laws and generational expectations, will also impact the service sector. New, automated workforce solutions can ensure that business operators can grant employees greater flexibility without risking service quality, allowing employees to select shifts that best align with their other commitments while meeting the staffing needs of the organization. As scheduling expectations continue to change, meeting these needs will play a key role in the service industry’s successful employment retention.
Financial Wellness Is Critical
The wage crisis has been dramatically exacerbated by the coronavirus. Unemployment skyrocketed alongside a dramatic increase in housing prices, leaving many financially unstable. In a survey of workers whose financial stress was heightened by the pandemic, 72% reported that they sought companies that cared more about financial well-being.
Unsalaried employees, as many in the hospitality industry often are, have long reported a feeling of constraint by not being able to access their own wages when needed. Implementing long-term solutions geared toward improving the financial wellness of the workforce is critical. Solutions like instant payment options can offer a seamless solution, offering easy integration with a service operations labor management systems. With industry-leading platforms, employees can access up to 50% of their earned wages immediately after working a shift, with the rest of their income provided during regular payment periods. Offering more financial freedom, instant pay can be the defining factor in a potential employee’s decision.
Workforce expectations are continually shifting. While the service industry wrestles with solutions to meet the labor crisis, addressing the long-present needs of frontline workers through new technological solutions will be vital to the industry’s success in a changing marketplace. The bottom line is in the same way organizations have created value propositions for their customers; that same approach must now be applied to attracting and keeping staff. No longer can the industry accept the high rates of turnover that has been historically the reality of the service industry. ⬡