Two nationwide crises emerged in the U.S. this year – the coronavirus pandemic and the public reckoning of systemic racism in just about every aspect of American life.
The outbreak in March of COVID-19, the illness caused by the novel coronavirus, forced hotels to close or drastically cut back on their workforces as occupancy plummeted to unprecedented lows.
A couple months later, America’s streets resounded with the voices of citizens denouncing racism and businesses began to respond by promising new and better commitments toward diversity, inclusion and equality in hiring and promotion.
Combined, the crises have rattled the hospitality industry’s employment strategies. Hotel owners and operators are struggling to bring back laid-off workers and recruiting new employees in the wake created by the intertwined events.
America’s hospitality employment sector has been ground zero for the economic fallout caused by the COVID-19 pandemic. Tourism Economics recently reported that in March and April nearly 17 million jobs in leisure and hospitality were lost.
The leisure and hospitality industry includes lodging accommodations, food and beverage, and arts, entertainment and recreation. Overall, it has begun to recover slightly. Four million jobs were created or restored by July.
But more than one quarter of people who worked in the industry remain unemployed.
In addition, the pace of rehires and new hires has significantly slowed, from 2 million new jobs in June to 200,000 in July.
In an August employment report for the U.S. Travel Association, Tourism Economics showed 17 million jobs in leisure and hospitality (light blue) were lost in March and April. The dark blue segment depicts jobs pre-pandemic. Jobs in leisure and hospitality are returning, albeit slowly. Though leisure and hospitality comprise 11 percent of the nation’s jobs, the sector accounts for 40 percent of current unemployment. “If every industry recovered to their pre-pandemic levels except for leisure and hospitality, the unemployment rate would fall from 10.2 percent to 6.2 percent, still 2.7 percent higher than pre-pandemic levels,” reads the report.
Del Ross is chief operations officer at Hotel Effectiveness, a technology company that manages labor costs for hotels. He has his own data that align with what Tourism Economics has found – that hotels are employing about half the workers they did before the COVID-19 pandemic.
In many cases, hotel owners and operators that are hiring back are finding out that many furloughed workers are reticent to return. This has led managers to reconsider how they onboard employees in the midst of the COVID-19 outbreak.
It’s a balancing act, for sure.
“The number of people you have to keep onboard at a hotel to keep it from falling apart and the number you have keep on for very minimum staffing are actually very close,” Ross said.
HIRING PACE: Hotel Effectiveness research reveals where hotels are rebuilding their workforces over the past six months and where rehiring remains flat.
Besides the challenge of generating enough revenue to pay workers, hotel owners and operators are finding out that many laid-off workers do not want to return to the job out of fear of contracting COVID-19.
“People were afraid to come to work because of the high-touch nature of what we do,” Ross said.
“We’ve been very focused as an industry on the guest experience, guest safety and guest health. But employee health is critical as well, especially to the employees. They want to know what you’ve done not only to make the guest safe but to make them safe.
“Some hotels really had to learn about how to communicate this. They couldn’t simply say, ‘Hey, you want your job back?’ They had to say, ‘Hey, you want your job back? I wanted to tell you about some of the things we’ve done to protect you when you come back.’”
Ross has also discovered that although hotels on average are staffed at half capacity these days, they’re paying their hourly workers about 4 percent more than they were pre-pandemic.
And, if owners aren’t paying more, wages and salaries of full-time staff are at the same levels they were in February.
WAGE PRESSURE: Hotel Effectiveness has charted upticks in hourly wages from February through August. The average increase is 4 percent.
Ross attributes the trend to several factors. Throughout the pandemic, hotels have retained their highest-skilled and therefore highest-paid employees who are working the hardest jobs right now.
Other changes are occurring or are just ahead.
The slowdown in business has allowed hotel owners and operators to review their hiring and retention practices that were in play pre-pandemic when the U.S. unemployment rate was 3.5 percent and good workers were hard to find and keep.
Ross calls this time “a big pause.”
Pre-COVID-19, Hotel Effectiveness studied the troubling pace of employee attrition and turnover. “One of the reasons for that was the absence of curated engagement with people when they came on board. This was a chronic problem. We have an opportunity to revisit these things.”
Hotel managers are changing the way they onboard new employees to be on the job for the long haul, Ross said. They’re detailing the job descriptions and performance expectations up front and they’re spending more time on training. They’re also more mindful of employees’ job satisfaction and mental health.
“Employee communication is something that is front and center right now,” Ross said. “The level of intention as to how we engage with our team members is in a new place.”
Managers have improved the clarity in which they communicate new cleaning standards, for example. “We cannot afford now for there to be any ambiguity in our instructions on how to clean a room.”
In the COVID-19 age, employees also are learning how to manage guest behavior and expectations from check-in to check-out. Hotel Effectiveness is tracking these things, Ross said, “because it’s a big wide world of uncertainty right now.”
The casual communications methods of the past can make hotels’ business vulnerable. “They can make what is turning out to be a protracted recovery a lot more painful and lot longer,” Ross said.
Keeping Culture Alive
Bryan DeCort, chief operations officer at Hotel Equities in Atlanta, Georgia, spends a good part of his day communicating with hotel brand representatives, employees at the properties the company manages and members of the administration staff who are working from home.
In mid-March, the 30-year-old hotel-management-and-development company with more than 150 hotels in its portfolio had about 3,000 employees. In April, it dropped to 850 employees. By September it had called back or hired about 1,400 people, DeCort said.
Business is crawling back month over month with hotels in destination markets seeing a faster rebound than properties elsewhere.
At Hotel Equities’ corporate headquarters, employees have not been brought back and those who remain have had their salaries reduced. “We are certainly not out of the woods,” DeCort said.
The important thing for now and the months ahead is to keep the company culture alive by creating a sense of cohesiveness.
“We’ve done a number of things that are very intentional and in line culturally when we think about how we interact with our associates at every level of our organization,” DeCort said.
Since the beginning of the pandemic, Hotel Equities has been “hyper-communicating” with employees “in real time as the dynamics around us continue to evolve.”
DeCort and others in operations at the company talk remotely every week with representatives of more than 30 brands. DeCort and his team also talk to general managers at least twice week and they do a weekly “huddle” with business teams in which they discuss hotels’ key performance indicators.
DeCort also started a monthly video call with GMs and directors of sales that he coined “The Scoop.” The COO provides updates on Hotel Equities’ business strategies and initiatives and leaves time at the end for questions. It’s been so well received, he said, it’s become a “critical touchpoint” that has grown to include more employees.
Staying in touch with the various team members is not only vital to maintaining the company’s culture, it’s also a strategic move that helps hotels get back to business and on the path to recovery when the COVID-19 pandemic begins to ease.
“We had a strong culture going into COVID and typically in these environments you see a flight from quality and a flight from people and culture,” DeCort said. “We’ve told a compelling culture story forever. We live it; we wear it; we breathe it. We’re incredibly intentional and protective of it.
“There’s been an absolute shift and pivot beyond the hospitality business on the importance of people. Just being decent, being communicative and kind and being supportive; recognizing that there is no playbook for what we’re all going through, and we’re each experiencing this differently.
“We’re just doing it the best we can – thoughtfully and respectfully. We want to make sure we have a building to come back to, a company to come back to and that our folks want to come back. And that’s the goal every day.”
CULTURE CLUB: Hotel Equities in September posted this photo collage on Facebook to pay homage to its housekeeping teams across the more than 150 hotels it manages during International Housekeeping Appreciation Week. Bryan DeCort, COO, said stoking the company’s strong positive culture is a top commitment during the coronavirus pandemic.
Although Hotel Effectiveness has charted hourly wage increases in the thousands of hotels it tracks, DeCort said Hotel Equities is not seeing that trend. It’s a world of difference from a year ago, when the industry was challenged with finding willing workers amidst a very shallow labor pool in many of its markets.
Back then, hotels faced the wage pressures created by the Amazon and Walmart and other large hourly employers.
That wage pressure remains in the COVID-19 era.
Large employers are the main reason, but in some cases it’s because many laid-off part-time workers are receiving as much in unemployment benefits as they would on the job, DeCort said. “That’s very, very real.”
The trend depends on the market and whether the employees are part time or full time, he said. “Where you can affect a 40-hour work week, you see less of that.” Providing consistent hours compels people on unemployment to return to the workforce.
While a lot of laid-off hospitality workers have enrolled in online continuing education courses while sheltering in place, DeCort said the main skill people can bring to the job in the COVID-19 is a form of athleticism.
“There has to be a willingness more today to jump in and learn a new skill. Attitude matters today more than it ever has.”
One of Hotel Equities’ value statements, “Hire an attitude and teach them the business” is especially salient today, he said. “The reality is as we, like most businesses, take this opportunity and are forced to be more horizontal in how we’re structured, we are asking our teams to do more with less.”
Unequal Playing Field
As hotel managers stare the COVID-19 work structure in the face, they’re also challenged to rethink their hiring practices toward greater workforce diversity.
It was an unusual summer.
The death of George Floyd on Memorial Day weekend at the hands of police officers in Minneapolis sparked civil protests from coast to coast. Many companies examined how they practice diversity, inclusion and equality from the rank-and-file up to the C-suite.
The hospitality industry has been taken to task for not doing enough. A survey of 300 adults by Hcareers – an online platform that connects hospitality job seekers with companies that are hiring – reveals Black respondents believe the hospitality industry is less diverse than what their white or Hispanic counterparts believe. (See the infographic at the end of this article.)
Two thirds of white and Hispanic respondents believe the industry offers equal opportunities toward advancement. In contrast, only a third of Black respondents agree.
Perhaps that’s because Black people do not see themselves represented in the upper echelons of hospitality leadership. The Bureau of Labor Statistics 2020 Current Population Survey shows only 7 percent of management positions are held by Blacks.
No matter the job candidate’s ethnicity, the Hcareers survey shows 75 percent of respondents would not work for a company that does not practice diversity and inclusion in hiring, training, retention and promotions.
Douglas Tutt, CEO of Hcareers, said hotel companies are beginning to get the message. And it’s two-pronged. One aspect is minorities’ fear of returning to the front lines during the coronavirus pandemic and other is distrust of companies to truly care about advancing people of color from those front lines to higher positions of leadership.
Some companies that work with Hcareers are making changes as a result of what the surveys have revealed, Tutt said. One company recently shared with Tutt’s team that beyond taking a public stand on Black Lives Matter it is expanding the idea of diversity and inclusion by rethinking and retooling its hiring, retention and promotion strategies.
“In the hospitality industry, many of the jobs critical to running the business are on the front lines. And those jobs are disproportionately represented by people of color,” Tutt said.
The COVID-19 pandemic has significantly affected Black Americans. The Economic Policy Institute reports Black Americans are more likely to contract the virus in part because they’re the essential hourly workers who are on the front lines.
The Economic Policy Institute calls racism and job inequality lethal pre-existing conditions.
The hospitality industry will always have hourly workers but systemic racism in the workplace and the coronavirus pandemic have converged to alter the way employers shape their employment practices.
In its most recent survey, Hcareers found that 75 percent of respondents would not work for a company that’s not making an effort around diversity and inclusion.
“That’s a wake-up call,” Tutt said. Not only do these prospective front-line employees weigh their opportunities against a company’s equal opportunity program, but they’re also paying attention to how a hotel is committed to keeping employees’ safe in the COVID-19 environment.
“Here’s an opportunity to shape that message with what your intentions are and what you’re planning to do to cast as wide a net as you can to bring people back, but also that you’re serious,” Tutt said.
The employment strategy should let current and prospective employees know about the company’s core foundations of how it thinks about its culture and how it relates to what is going on in the country, he said. “This is an opportunity to take a stand in a way that responds at the foundation level that people are telling me is important.”
Hotel management can respond to such concerns by sharing its intentions with regard to inclusion and equality in hiring and advancing employees. The plan should include how management will hold itself accountable with regard to its long-range goals with diversity and inclusion.
Hcareers gives employers a platform to not only post job opportunities but to share their stories with prospective employees through photos, blogs and video. Tutt says the medium is a smart way to let younger job shoppers know your business-growth strategy involves people of all backgrounds and ways of life.
“We will come out of this. And at some point, even though we have skeleton crews at the moment, we will get on the other side of this and you’ll need to bring people back.”
A company that takes a stand by creating a diverse hiring policy and acting on it, will emerge with a culture that is inclusive and more sensitive. “It will put you in a better position to draw from a larger labor pool,” Tutt said. “It just makes business sense to do this. It’s that much of an imperative. Why would you, in the face of all this evidence, not do something?”
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