The year 2020 forced a myriad of new challenges on the world, leaving businesses that rely on the in-person experience struggling to keep the lights on. Specifically, the hospitality industry has experienced a relentless decline in spend throughout the year and was confronted to adapt quickly, as restaurants shifted to off-premise strategies and hotels did the best they could to continue providing a safe environment for guests.
Despite the difficulties introduced by COVID-19, there is an opportunity for businesses to adapt even further, leveraging technology to mitigate problems that have hindered their success, and this begins with staffing. Today, restaurants and hotels can find new ways to better connect with the part-time workforce, and address problems associated with turnover, scheduling and time-consuming administrative duties by rethinking their previous approach to human capital management.
Tackling Toxic Turnover
Turnover in the restaurant and hotel industries has been a costly and time-consuming challenge for management long before the pandemic ensued. Serving as one of the world’s largest employers of part-time labor, the annual turnover rate in the restaurants and accommodations sector exceeds 74% – much higher than the national average, which sits between 10 and 15% . Combing the costs of recruiting, onboarding, training, and even productivity loss associated with the quick churn, the cost of employee turnover averages at around $5,864 per person.
Due to the pandemic, restaurants and hotels are having an exceedingly difficult time remaining open, and working to avoid the costs and repercussions of toxic turnover should be top-of-mind. Businesses in the space should consider what their employees want from an employer, and do their best to facilitate, ultimately encouraging longer-term loyalty. For instance, across the board, workers rank benefits like healthcare as a top priority when choosing and staying with a job. Unfortunately, this isn’t the precedent in the restaurant and hospitality industries, but if operators wish to get a leg up in their recruiting efforts, offering these perks could pay off in the long run. Providing the workforce with benefits and other protections can serve as a viable way to keep workers engaged, content and less likely to churn.
Despite the lack of benefits available to independent contractors, there are many aspects of the gig economy business model that are beneficial for both employers and their staff, particularly during a pandemic. In fact, a December 2020 survey from Monster shows that 92% of respondents believe now is the right time to look for gig work, and 52% view the gig economy as a viable way to stay afloat in between jobs, given the challenges of COVID-19.
With lives in flux and the future uncertain, restaurant and hotel operators can consider offering their workforce flexible schedules and the ability to pick up as many – or as little – shifts as desired. Without limiting when, where and how often an employee can earn their wages, operators will in turn have more autonomy and a more loyal staff, helping to reduce turnover and make day-to-day operations run more efficiently. While there are challenges to the concept of enabling workers this type of flexibility, embracing a model that looks like the gig economy -- but isn’t -- is key. New partners in the marketplace offer employers the ability to have a bench of trained, on-demand workers available, combined with a tech-driven platform that automatically finds and broadcasts open shifts to these workers. In this type of environment, workers have the autonomy they desire, and management doesn’t need to concern themselves with last-minute changes that impact their schedules.
Eliminating Administrative Duties
Business operators should of course be encouraged to embrace employer status to reap the benefits of a happy and loyal workforce while improving the overall productivity of their business, but there are time-consuming and costly administrative duties, and even risks, that come with this. Across the board, administrative duties cost businesses a significant monetary amount in lost work productivity, particularly in restaurant and hospitality where management is also responsible for scheduling conflicts, turnover and other day-to-day management duties.
Restaurants and hotels can leverage strategic partners that hire their workers away and employ them directly, handling employee-related paperwork and duties, allowing managers to shift their focus to running a successful business. By using such partnerships, restaurants and hotels will be equipped to reduce liabilities, moving legal, compulsory duties and risk away from their business, while still providing the workforce with flexibility and benefits.
Restaurant and hotel workers engage directly with customers on a day-to-day basis, and are a vital part of the industry’s subsequent success or failure. Particularly in the age of the coronavirus and beyond, the hospitality industry is suffering, but changing up its approach to human capital management can help in more ways than one. Problems related to toxic turnover, scheduling and time-consuming administrative duties can be mitigated with the help of new-age technology and partners, helping operators to run a more efficient business.
About the Author:
Scott Absher is CEO and Co-Founder of ShiftPixy.