The hospitality sector around the globe seems to be in collective shock.
The sector that (along with the related sectors of agriculture, tourism, events, arts, sport, and leisure) bore the most significant economic impact of the COVID-19 shutdowns is now struggling to attract workers back to the sector now that jobs are readily available again.
ABC News published this story, this story, and this story within three weeks of each other in May reporting on the shortage of staff in regional Australia, with the interviewed local employer frequently a hospitality employer.
The situation is so dire in Queensland that six weeks ago state Premier Annastacia Palaszczuk launched the Work in Paradise campaign as part of a $7.5 million package to address the dire shortage of workers that tourism businesses are facing in the state’s regional areas.
The package includes a $1,500 incentive and $250 travel voucher for any job seeker who takes up work in regional Queensland, from northern tropical destinations such as Mackay to west of Toowoomba.
SEEK reported that, in April 2021, eleven industries had posted more jobs to their Australian job board than ever before. Sitting at number 2 on that list was Hospitality & Tourism.
This chronic shortage of workers unwilling to take (or return to) a job in hospitality is not confined to Australia.
In America, the Wall Street Journal article (18 May 2021) Staffing Shortages Pose a Threat to Hotels’ Budding Recovery reported that “hotels say they are struggling to hire enough housekeepers, kitchen staff and other hourly workers—including those laid off early in the pandemic.”
Across the Atlantic the Reuters article Harder to attract staff than visitors at Italy’s tourist hotspots reported that a local hotel lobby group estimates the labour shortage in the sector at around 10%, or 50,000 workers.
Two months ago the AFR thundered Crunch time on labour shortages seemingly oblivious to the irony of featuring chef, restaurant owner, and Neil Perry as the article’s featured owner who is “…really worried about having enough staff to open seven days a week,” when Mr Perry’s Rockpool Dining Group was discovered to have underpaid staff to the tune of $1.6 million only three years ago.
There is another solution to the problem of labour shortages – raise wages and improve conditions.
As respected economics commentator, Michael Pascoe, writing in The New Daily, comments:
The nation’s employers are publicly performing a fine impression of a bunch of school kids standing on the edge of a pool for a swimming lesson in cooler months.
They fear the water is going to be cold, a couple might put their big toes in, they want mummy to take them home, everyone waiting for someone else to jump in first.
For employers, it’s not the temperature they’re complaining about, but labour shortages. It’s not the water, but wage rises, that make them nervous.
What if restaurants paid better wages and provided stronger benefits?
Some employers in the American restaurant and food service industry are doing exactly that in order to fill vacancies.
As The Guardian reported:
“An ice cream parlor in Pittsburgh, Klavon’s Ice Cream, raised its wages to $15 an hour and filled all 15 open positions immediately without raising prices, and that raising the wages also boosted morale and expanded their customer base.
&Pizza, a pizza chain in six states and Washington DC, raised wages at the start of the pandemic and expanded benefits such as providing Election Day as a paid day off. Owner Michael Lastoria said the chain has opened 11 new locations through the pandemic, and had no trouble in hiring new workers at the chain’s starting wages beginning at $16 an hour.
Higher wages lead to greater consumer spending and greater workforce productivity, things every company benefits from. Not to mention raising wages is the single clearest way to say to our workforce, ‘we value you’,” said Lastoria.
The pandemic highlighted issues that have been problems in the industry for decades, minimum wages, lack of benefits, dangerous working conditions, the cyclical nature of laying off and rehiring staff when it’s convenient for employers’ balance sheets. These problems are not new, but we need new solutions because clearly, the status quo is not working.”
The status quo is clearly not working here either.
The Fair Work Ombudsman’s frequent public releases about companies being caught short-changing workers feature a disproportionate number of hospitality employers (“The hospitality industry is a key focus of the FWO’s compliance operations. Our operational data has consistently indicated this industry is over-represented in non-compliance with workplace laws”, FWO Annual report 2017-18)
The hospitality sector has a legitimate right to request access to skilled migrants via immigration programs however this solution just papers over the long-term cracks in the sector’s treatment of employees.
The pandemic provided an unexpected and unwelcome circuit breaker for many hospitality employees, with their regular income stream terminated with barely a day’s notice with very few alternative jobs available. My daughter was one such worker. She remained without any paid work for five months until hired by her local Dan Murphy’s outlet.
However, having found themselves forced to seek alternative work in order to financially survive many of these workers, including my daughter, decided they liked what they found elsewhere and were unwilling to return to the inferior pay and conditions of the hospitality sector (although, in my daughter’s case, her former employer was generally very good to her).
This is best captured by Angelo Mante in the previously cited Reuters article about the shortage of hospitality workers in Italian resorts and holiday towns:
Roberto Sabato, who leads a rights group for seasonal workers called “Oltre la piazza” (Beyond the Square), says the pandemic has led workers like him to reassess their lives. “People now think: The pandemic means I can die tomorrow, and I have spent my whole life as a slave. I don’t want to do this anymore,”
The hospitality sector’s staff shortage problems are largely of their own making and now is the time to address the systemic issues their workforce has mostly tolerated; but not any more.