Does the “Future of Work” Look Different for the Hospitality Industry?

How the gig economy, seasonal volatility, and tougher regulations on employee classification are impacting staffing decisions.
Person behind a word cloud that says Gig Economy

Finding and keeping good staff is critical to running any successful hospitality enterprise, but it can also be one of the most significant challenges. The shortage of qualified, reliable, and skilled staff is a significant concern for everyone in the industry.

Hospitality employers have been hit with a triple whammy in the last several years: 1) having to reduce staff due to COVID-19 lockdowns, 2) changing attitudes by employees about work/life balance, and 3) an increase in new viable employment options outside the hospitality industry. With the pandemic forever changing the way workers think about work, employers need to reimagine how to recruit, manage, and retain staff at all levels.

Retaining Your Valuable Employees

First and foremost, hold on to the good employees you have. The employer/employee dynamic has changed for the foreseeable future and employers need to take immediate, tangible actions to retain their best workers. This might include:

  • Increasing compensation to current market levels – including potential jobs they might consider in other industries (see below).
  • Providing flexibility in scheduling to accommodate an improved work-life balance.
  • Offering bonuses for the three “R’s” – recruitment, retention, and referrals.
  • Improving training and internal growth opportunities.
  • Defining/redefining company culture to align with the employees you want to attract.
  • Launching initiatives aimed at making employees feel valued and appreciated.

Keeping an Eye on the Competition

For all but a few specialized or senior roles, you’re not just competing against other hotels and restaurants for staff. You’re competing against anyone offering flexible work, including rideshare providers (Uber, Lyft), freight and shipping companies (Amazon, UPS), delivery services (Capsul, Grubhub), and personal shoppers (Instacart, Shipt), just to name a few.

As the gig economy continues to expand, this is just a snapshot of the types of companies that are setting the market standard for your potential employees. Developing a deep understanding of the compensation, lifestyle flexibility, and benefits that other – potentially competitive – organizations are offering workers will help give you a leg up in this increasingly aggressive marketplace.

Using Gig Workers to Manage Seasonal Volatility with Flexibility

Seasonal fluctuations in demand are nothing new to hospitality, but the current uncertainty the industry as a whole is experiencing goes far beyond bad weather or economic climate. To remain competitive (or even viable, in some cases), hospitality organizations must have the flexibility to staff up and down on-demand, making the expenses associated with over and understaffing a thing of the past.

In some sense, the hospitality industry in the U.S. has been a gig economy all along. Catering businesses and event planners often hire staff on the fly and fill positions as needed. Workers achieve flexibility and compensation for just the work they do, and in the case of tipped employees like wait staff and bartenders, they often walk away with (most) of their money at the end of their shift. These benefits are all tenants that make gig work so appealing to many in the industry.

Are Gig Workers Right for you?
The fact that gig work has become significantly more mainstream should be a boon to the hospitality industry. A lot of what traditionally kept people away from hospitality work––night/weekend hours, no set schedule, and seasonal staffing changes––are exactly what today's gig workers are looking for.

So, all that said, why isn't this the magic tonic for our staffing ills? There are a few practical reasons: 

  • Gig workers may not understand or be a good fit for your corporate culture.
  • It can still be a bit of a lift to ensure that gig workers represent your brand the way you would like.
  • Most hospitality businesses are not equipped to provide gig workers with the immediate or end-of-day compensation they are accustomed to.

However, the main challenge posed by gig workers may be that the government is taking a strong stance about how companies classify 1099 contractors and employees. There are active lawsuits against Uber and Lyft for failing to provide gig work drivers with things like guaranteed minimum wage, overtime pay, healthcare, and workers' compensation.

Experts estimated that as many as  20% percent of employers misclassify workers as independent contractors. The administrative headaches of managing a mixed workforce (1099 and full-time, W-2 employees) in a setting like a hotel or a restaurant can be daunting enough. Add in the specter of the IRS or an AG looking over your shoulder (and into your books) to make sure you’re classifying everyone properly, and it’s easy to understand why gig-workers aren’t the answer for every company.

Outsourcing Risk and Operations

A practical solution for many hospitality employers is outsourcing recruitment and staffing operations which enable businesses to achieve peak productivity and long-term flexibility while eliminating the compliance risks and extensive costs often associated with recruitment and hiring.

Workforce-as-a-Service (WaaS) providers have evolved to meet these needs by providing a flexible, scalable W-2 workforce that expands and contracts in response to demand. WaaS providers utilize workforce management technology and can provide actionable data & analytics that are specific to a hospitality employer. They integrate unique industry, market, or seasonal factors to help employers estimate fluctuating demands and fine-tune labor needs while reducing operational overhead and mitigating the risk of misclassifying employees.

The Future of Work is Flexible

Hospitality professionals and hourly staff want and deserve the same level of fluidity in their careers as their counterparts in other industries. Businesses that depend on temporary and seasonal labor need to think differently about their staffing needs in the post-pandemic world and find alternatives to help them remain competitive, mitigate their compliance risk, and reduce their operational overhead. With increasing availability and access to WaaS solutions, hospitality businesses have the tools they need to not only benefit their bottom line, but also keep hourly workers coming back for more.


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