The labor issues that define the hotel business
The labor issues that define the hotel business
26 NOVEMBER 2018 8:35 AM

It’s no secret hoteliers worry about finding and keeping employees. This roundup compiles the biggest labor stories executives are talking about. 

GLOBAL REPORT—Ask any hotel industry executive what keeps them up at night, and the odds are good labor issues are foremost on their minds.

Whether hoteliers wrestle with finding employees or retaining the great staff members they already have, most in the industry agree that labor concerns cast a cloud on the up cycle.

At The Lodging Conference, Aimbridge Hospitality Chairman and CEO Dave Johnson didn’t sugarcoat the dangers of ignoring the problem.

“Labor, labor, labor. I think it could be the one thing that really hits us hard,” he said. Labor costs increased “almost 2.9% in August—that’s the highest in a long, long time, and I think it’s going to continue to climb. We do need to get bipartisan support to do something, or we’re going to derail our economy.”

While compensation is one of the most common sticking points, Judy King, founder and principal of Quality Management Services, said onboarding, flexibility and staff culture all equally contribute to turnover at the Southern Lodging Summit.

“I see a tendency to drop standards, and a toleration of poor performance leads to nothing but more poor performance,” King said. “Your good employees are not only doing their jobs, but they have to pick up the slack from other people.”

Hoteliers around the globe also recognize the lack of gender diversity at the executive level. At Deloitte’s 30th European Hotel Investment Conference, a panel of female executives discussed some of the challenges and stereotypes women face when trying to advance their careers in the hospitality industry. But should companies choose to promote more women, they are more likely to see increases to the bottom line, Castell Project founder Peggy Berg said. 

But the hotel industry is making strides in improving the labor environment. In one of the biggest developments of 2018, several major hotel brand companies and the American Hotel & Lodging Association unveiled the “Five-Star Promise,” an initiative intended to reinforce sexual harassment training and equip employees with alarm devices.

“We don’t want the illusion of safety—we want real safety,” Hilton President and CEO Chris Nassetta said. “That means we’ll have to have the right tailored-fit solution for the device in the right hotels. We have to do the right education and training.”

Independent hotel operators have a different perspective in hiring and training employees without the infrastructure of a brand, but that doesn’t stop them from putting their own spin on training their staffs.

“I’ve always felt that you can use a little more creativity on the independent side, where everything isn’t so super structured,” said Shawn Roach, GM of the HGU New York.

An emphasis on grooming talent to retain employees who fit a company’s culture permeates all disciplines in the industry, including revenue management. And sometimes the best revenue managers come from other departments.

“The line-level associate who takes an interest, starts asking questions on why things are how they are—we latch onto those folks,” said Chris Cheney, VP of hotel performance and analytics at Stonebridge Companies. “Not elevating them yet, but feeding their thirst for knowledge. And then from there we groom them to the next step to a revenue analyst, revenue manager.”

Management companies also have to comply with changes to federal tip pooling laws regarding wait staff, bartenders and other employees who depend on tips.

“You need to make sure that at the end of the day, employees who primarily receive tips are at least making the federal minimum wage or the state minimum wage if that is higher,” said Sylvia St. Clair, associate at Faegre Baker Daniels. “Meeting minimum wage is the No. 1 priority.”

With the increase in new hotel supply, the jobs are there, ready to be filled, and some larger properties even deploy mass-hiring strategies before a new-build hotel opens its doors. Building community relationships is one effective method to get the word out, said Wanda Smith-Gispert, regional VP of talent and workforce development for MGM Resorts International.

“Partnering with local nonprofits, government agencies, veteran and job training programs allowed us to build a pipeline of trained candidates well in advance of posting the positions,” she said.

Columnist Stephen Barth listed five reasons hotels can lose good employees, including issues with scheduling, paid-time-off policies and accountability of fellow staff members.

“Generous PTO is a magnet for good employees, even if it is ’use it or lose it’ so it does not accrue,” Barth wrote.

But can the hospitality industry’s labor struggles be solved with higher pay? Hotel News Now Editor-in-Chief Stephanie Ricca issued that challenge to hotel companies in an October blog post.

“I’m a big believer in a strong workplace culture and non-monetary perks for good employees, but the fact is that money talks,” Ricca wrote. “You won’t even have a chance to impress new hires with your great culture if you can’t even get them in the door!”

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