HR challenges in the hospitality industry have always been a balancing act of taking care of employees and customers. However, staffing shortages over the last two years have added another layer of complexity to this industry. Partnering with a trustworthy provider to help with hospitality human resource management is essential for successfully managing these challenges.
In this article, we’ll discuss some of the biggest challenges of HRM in the hospitality industry. We’ll also look at how partnering with a payroll software company can help you better manage your recruiting and onboarding processes.
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Biggest Challenges of HRM in the Hospitality Industry
The hospitality sector is one of the few whose success is impacted by customer satisfaction. Hospitality employees are the face of the brand and project the values of the company they represent. If hospitality workers are not happy, they do not offer the level of customer service that keeps people coming back.
If customers are not happy, this threatens the livelihood of hospitality organizations. With so much on the line, HR professionals at hospitality companies face a unique set of challenges they have to tackle daily.
Historically, HR in hospitality has battled problems like low wages, high turnover, and the recruitment of skilled employees. These concerns have been magnified since 2020, with unemployment rates skyrocketing as high as 38% over the last few years.
The situation hospitality organizations find themselves in has shone an even brighter light on how critical it is to have the right HR processes in place. Let’s take a more in-depth look at some of the biggest hospitality challenges HR leaders face today.
Staff Attrition (Unfilled Vacancies)
One of the biggest HR challenges in the hospitality industry is staff attrition. This term refers to when an employee leaves and their position still needs to be filled. Therefore, hospitality organizations have yet to fill vacancies. This employment gap directly impacts the customer experience, leading longer to wait times and a shortage of expected amenities. It can even lead people to take their business elsewhere.
The attrition rate in the hospitality industry alone runs as high as 74.9 percent. That’s a far cry from the national average of 12 to 15 percent. Furthermore, recent data from The Bureau of Labor Statistics shows that the quit rate for the food service industry has grown from 4.8% to nearly 7% over the previous year. So why exactly is staff attrition such a problem in the hospitality industry? Some of the top reasons are:
- Unclear job expectations
- Inefficient communication
- Minimal growth opportunities
- Disconnect with managers
Most hospitality industry employees are hourly, making finding the right people even more challenging. The hours are long and include nights, weekends, and holidays. The wages are also typically lower for employees working in hospitality. The hospitality industry is also seasonal by nature, which means new hires are brought in during peak times of the year and let go during off-peak periods. These factors all lead to higher attrition in the hospitality industry.
Retaining Qualified Workers
Another area that human resource management in the hospitality industry needs help to improve is retaining qualified workers. The most considerable expense for any business is its employees, especially for hospitality organizations. Labor accounts for 40% of total operating costs for hospitality and tourism organizations. This expense in a very dynamic industry makes it challenging for HR managers to recruit and retain hospitality staff.
A shortage of skilled employees also plays a significant role in this struggle. This problem is two-fold:
- There is a dwindling supply of qualified workers in the hospitality industry.
- Qualified workers can apply their skills in other industries.
There are a few reasons for the shortage of skilled workers in the hospitality sector. First, these types of positions typically pay low or have tipped wages. As a result, employees tend to leave these jobs at higher rates.
Second, many hospitality employees are students, seasonal staff, or part-time workers. These types of workers are typically short-term employees. They either use hospitality positions as stepping stones to a better job or temporary work to make extra money. This situation creates a revolving door for employees who don’t stick around long enough to learn the necessary skills to perform their jobs effectively.
Finally, hospitality employees must use technology now more than ever. There are software programs to learn and equipment to use. Less technologically savvy people view this as a significant barrier that ultimately drives them to leave.
Another major factor attributing to retention is that many hospitality workers can apply their skills in other industries. For example, someone with management experience doesn’t only know how to manage a hotel. They can manage a retail store or a restaurant using their managerial skillset.
Developing Existing Employees
One of the reasons why hospitality organizations struggle with attrition and retention issues is that there needs to be a process to develop existing employees. When employees do not receive a clear career development path and essential training, this creates a bottleneck of inexperienced workers. This trickle-down effect has a negative impact on a hospitality organization and its patrons. Furthermore, HR managers cannot hire from within, which is more cost-effective than hiring externally.
Implementing programs to train employees properly helps close the skills gap, which continues to be one of the biggest HR challenges in the hospitality industry. 91% of employers agree that soft skills development is critical to the future of recruiting. These types of skills include communication, critical thinking, and cultural competency.
While these skills can be used in any job setting, taking the time to develop these traits in your existing employees will increase the likelihood they will remain loyal. Over time, hospitality organizations create a talent pool of trained employees with the potential to become trained managers. By investing in employee development, HR managers can give staff a clear career path and promote them internally.
Online training is an effective way to develop hospitality employees. It’s beneficial to workers in the following ways:
- Videos are a more engaging way to train than reading documents or articles.
- It can give employers a return on investment in less than a year.
- People tend to learn five times more training online versus through other media channels.
- It is 50% more cost-effective for employers.
As you can see, developing hospitality employees is a win-win for both organizations and their staff. When hospitality HR managers invest in their employees’ future, they invest in the future of their organization.
Maintaining Morale
Maintaining the morale of your employees is always an essential strategy for any business. Employee morale impacts your staff’s productivity and overall well-being. It’s been especially imperative during the workforce changes of the last few years and during times of economic hardship. Boosting employee confidence is crucial in any industry, but it’s one of the biggest HR challenges in the hospitality industry.
The hospitality industry has been one of the hardest hit over the last few years. Hotels and motels experienced significant fluctuations in occupancies. Likewise, recreational venues had to reconfigure how they would operate with new safety standards. Things have been tough for an industry that already experiences tight margins and stiff competition.
Hospitality employees have been in the middle of these circumstances for the last few years. No one could have prepared for the countless situations hospitality organizations faced. However, workers must know they are valued and appreciated for their dedication and commitment. Those feelings drive a person’s desire to work harder and give 110 percent every day.
Here are some ways you can boost morale:
Be Transparent
Your employees want to know they can trust you. By being transparent and demonstrating you have nothing to hide, you will build and develop that trust with your staff.
For example, tell them if you’re struggling to find extra help to ease your current employee’s workload. Communicate to them that you’re trying to hire extra hands, but no one has turned up. Ask how you can help ease their burdens in the meantime.
Be Clear With Expectations
If your employees don’t know their job role expectations, they will not be successful. Establishing clear and reasonable goals from the beginning will help them excel in their work and enables you to determine how they can grow in the future.
Be Kind
It seems relatively simple, yet it’s easy to overlook kindness in the hustle and bustle of hospitality. Working in the hospitality industry requires patience and grace. This approach applies to both customers and employees. Taking just a few moments to show some kindness to your staff goes a long way in boosting and maintaining morale.
The Desire for Remote Work
One of the most significant changes over previous years has been the shift to working from home. Millions of people have traded their desks and co-workers for makeshift offices and families, with no desire to go back to the way things were. A recent study found that 68% of Americans would prefer to be remote. However, remote work is different for all industries. It’s difficult for hospitality staff to work remotely, even if their role is flexible.
So what can HR in the hospitality industry do to enable employees to work remotely and be productive? Here are some tips to help you successfully offer remote work:
Assess Your Needs
Before offering more remote work, you must evaluate how each department functions. Ask key managers to prepare a list of job roles and responsibilities. Review the list and determine which duties could be performed elsewhere or with the help of automation.
Get the Proper Software In Place
If the hospitality industry is going to succeed at offering remote work, it needs the right software in place. Communication channels and a secure database for company information are a start. It’s also necessary to consider the importance of unified payroll and HR software that enables employees to clock in and track their tasks anytime, anywhere.
Communicate Often
When you’re not face-to-face with hospitality staff, communicate and communicate some more. This approach is essential to ensure you stay in touch with what and how your employees are doing. Instant communication tools like Slack, Loom, and Google Meet are great ways to communicate effectively with remote hospitality workers without bombarding their inboxes. They even offer video options, so you can still get quality facetime.
Be Understanding
Remote working in the hospitality industry has a substantial learning curve for employers and employees. Give your remote employees a chance to adjust and adapt to their new way of working.
It may even be beneficial to schedule quick check-in calls each day or week to ensure no one is struggling. If someone is not adjusting well, work together on a plan to help things run more smoothly.
In addition to helping employees work remotely, you can also create spaces for guests.
Some larger hotel chains have adopted “work-at-a-hotel” packages to encourage people to use their rooms as offices. Guests receive access to one room during business hours and other hotel amenities. Other hotels are even looking to create monthly and annual packages for guests who want to use a dedicated space away from home regularly.
How APS Can Help You Overcome HR Issues in the Hospitality Industry
Now that we have discussed some of the challenges faced by HR in the hospitality industry, let’s talk about how to solve them with HR technology. The importance of HRM in the hospitality industry has never been more apparent. However, HR professionals can’t do it alone. They need the right technology stack in place to help them confront HR challenges in the hospitality industry head-on and solve them. APS provides an all-in-one technology platform that makes payroll and HR easier for hospitality organizations. Here are some ways APS can help you overcome HR issues in the hospitality industry:
Recruiting and Onboarding
One of the critical roles of HR in the hospitality industry is recruiting and onboarding. Using recruiting and onboarding software like APS Hire helps hospitality organizations recruit candidates, track applicants, and hire qualified workers in a centralized location.
You’ll save valuable time with a recruiting strategy that allows you to hone in on the best candidates and fast-track those applicants based on your hospitality organization’s needs, and hire skilled employees for the right positions:
- Create a better applicant experience with customized job postings, automated job promotion, and mobile-optimized applications.
- Filter applicants with assessments and prescreen questions to narrow down candidates faster.
- Utilize scorecards and in-depth interview guides to improve hiring accuracy and consistency.
You can then build an onboarding process that gets your new hires on the right path from day one:
- Create manager and employee checklists for required forms to streamline onboarding.
- Have new hires e-sign employee documents, which are then synced to their employee record automatically.
- Create electronic versions of all your paper forms and store them securely to ensure compliance.
By utilizing HR technology to manage your recruiting and onboarding processes, you will build a solid strategy for how to deal with attrition in the hospitality industry. You’ll decrease your attrition rate and fill more vacant positions.
Training and Retention
HR managers in the hospitality sector have a lot on their plates. When your to-do list is neverending, initiatives like training and retention slip through the cracks. It’s not intentional, but this may lead to you getting blamed for poor HR management. However, the real culprit is the lack of HR technology to help you manage and automate your tasks.
An HR platform like APS can help you automate employee development and retention processes to grow your pool of skilled workers. You’ll create a more dynamic and well-rounded employee lifecycle to manage workflows like:
- Integrations with learning management systems and tracking internal and regulatory courses for a more defined employee training process.
- Performance management for better collaboration with hospitality workers to create goals and give them a clear career development path.
- Tracking of pay rates and position changes to demonstrate a vested interest in employee growth.
Using a payroll and HR platform like APS to automate the employee journey while maintaining compliance is vital.
Communication Tools
One of the major themes we have discussed is the importance of communication with hospitality workers. Transparency and visibility go a long way in creating a positive company culture. HR technology provides several ways to communicate with your hospitality staff so they are always in the loop:
- Use an internal company newsfeed to communicate anything from upcoming holidays and policy changes to new employees or virtual event announcements. HR managers can add their messages in APS, and employees can view them when logged into employee or manager self service.
- Text messages are a great way to communicate with your on-site and remote-working employees since people tend to check their texts more than emails. APS provides text messaging that makes it easy for hospitality HR managers to create and schedule notifications in our platform.
- Emails are still a tried and true way to communicate with your employees, especially about important topics like open enrollment. With APS, you can create your email messages and send them out to all employees at once for streamlined notifications.
Using these tools in conjunction with employee and manager self service will ensure communication lines are always open with your staff, no matter where they work. APS provides self service both via desktop and mobile app for added convenience to your employees and managers. These tools are a great way to maintain employee morale and support remote workers better.
HR Analytics
Hospitality organizations have to manage razor-thin margins and operational costs. Hospitality HR software provides hotels, casinos, and other organizations with powerful dashboard analytics at a glance. APS’ reporting dashboards offer various analytical tiles to view labor costs, turnover trends, and payroll expenses across departments, locations, and entities.
It’s vital to have quick access to these types of metrics for informed decision-making. APS even provides exports and integrations with accounting packages like Sage Intacct to align payroll, HR, and finance better.
With all the unique HR challenges in the hospitality industry, there’s never been a better time to invest in HR software. Having the right technology to help streamline and automate your HR processes makes it easier to focus on more strategic initiatives. When you’re able to approach obstacles with laser focus, those significant challenges become a lot more manageable.
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