Florida Hotel Insurance

How Will the Hospitality Industry Handle Labor Shortages?

2018-12-20

Florida Hotel InsuranceThe hospitality industry has been in a state of flux in recent years. Major disruptions and ever-changing customer expectations have kept industry leadership on their toes. Rapidly developing technology has enabled much of the change guests see at hotels, but these demands aren’t the biggest problem facing the industry.

How to Address the Labor Issue

Most businesses today face concerns regarding labor shortages. With unusually low unemployment, job-seekers can afford to be selective. But low unemployment rates aren’t the only factor affecting labor shortages in the hospitality industry.

Labor costs represent almost half of hotels’ expenses, and constraints on that necessary expenditure are changing. While hotels are paying employees more per hour, many are offering fewer hours. This creates recruitment and retention challenges compounded by the low unemployment rate.

Yet money isn’t everything when it comes to employee retention. When asked why they stay at a particular hotel, employees indicated the following reasons:

  1. Salary and benefits
  2. Job security
  3. Location
  4. Work-life balance
  5. Flexibility

On the reverse side, they listed the following as reasons why they would leave one hotel in favor of another:

  1. Not paid enough
  2. Limited or non-existent upward trajectory
  3. Problems with work-life balance
  4. Not feeling challenged
  5. Poor leadership

What these stats tell employers is that money talks, but employees desire many things beyond a well-padded paycheck. They need to feel that their work is engaging and meaningful. They also desire flexibility and a company that understands their personal life and downtime are important. Lastly, employees aren’t going to stay at a job that has no prospects. Not many people are content to work entry-level jobs forever. Providing training or advancement opportunities can help retain employees as well as allow management to fill positions by hiring from within their own ranks.

When it comes to making employment decisions, management needs to look at a new hire’s first three months. If a new employee isn’t working out, it’s time to cut losses rather than forcing the issue. Trying to make an ill-suited hire work out wastes time and money. While the hospitality industry is still generating revenue, they aren’t doing it as well as they have in previous years. Recruitment and retention challenges represent the biggest risks to a hotel’s bottom line. To learn more about reducing risk in the hospitality industry, contact the experts at MMA Florida.

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