A pandemic turning into a personnel crisis
The issue is already familiar to most – even before Covid, the hotel and tourism industry suffered from a lack of skilled workers and young talent. The personnel shortage has grown into an even greater challenge for the industry as a result of the crisis. The high level of uncertainty throughout 2020 triggered high staff turnover rates; in Germany alone, 325,000 professionals “turned their backs” on the industry. According to projections, Austria also has a shortage of approximately 50,000-55,000 skilled workers in the industry. Temporary workers, who traditionally make up a large proportion of the workforce in the hotel and catering industry (approx. 1 million employees in the hotel and tourism industry in Germany), have also reoriented themselves, as they were not entitled to short time work and are highly dependent on work perks, such as tips. In addition, fewer apprentices were trained due to the closures of the businesses – the industry is missing almost two full years of training.
mrp hotels discussed the acute challenges facing the industry, presenting them in facts and figures and points out possible solutions.
How does the problem arise and why has Covid exacerbated the situation (example Germany)?
Approximately 325,000 professionals from the hotel and tourism industry have opted for another industry during the crisis in Germany. Especially retail and hospitals have benefited from former tourism professionals. Dorint Hotels for example, published an average workforce loss of 10-20% per hotel due to the pandemic.
Short-time work has been paid to most tourism workers. However, mini-jobbers (approximately 1 million employees in the hotel and tourism industry in Germany) are not eligible for short-time benefits. Due to this lack of income, many mini-jobbers have sought an alternative source of income.
Due to the company closures in the hotel industry, fewer apprentices were trained. As a result, there is a shortage of almost two complete training cohorts in the restaurant and hotel industry. In terms of apprenticeships, in general, it can be said that approximately 30% fewer apprenticeship contracts were concluded during the pandemic in comparison to the latest pre-Covid year (2019).
In 2021, 62% more job vacancies were published in the hotel and catering industry compared to the previous year. However, job seekers started actively looking for new employment even before job openings were posted in the hospitality industry. This is due to the uncertainty of the reopening and the related political decisions.
No employees, everything optimized and yet it doesn’t run, now what?
Revenue & Costs
Know your numbers. What is already important in the running business will gain more importance in times of crisis. A precise analysis of cost structures is essential to identify potential savings. The underlying question: What is necessary for operations?
A temporary change in opening hours, for example in F&B departments, can significantly help to simplify / reduce staff scheduling and costs. In borderline cases, a decision can be made to close individual departments on days, where revenues and guest numbers are lowest.
In the hotel industry it is also possible to limit the room occupancy to a certain level. The upper limit is determined by staff efficiency, thus, it is prevented that the hotel personnel is durably overworked, and, if necessary, timely notices can be communicated by department heads.
What channels are there to address applicants as effectively as possible?
Of the top 1,000 German companies, over 90% said they had published job advertisements via their own company website in 2019. Internet job boards were used by 74% of companies.
Other continuing upward trends in 2019 are employee referrals (13%), as well as the company’s own network (11%). Traditional media (i.e. print media), on the other hand, are used less frequently to advertise jobs (3%).
The growing number of members of social media platforms means that companies are increasingly turning to these channels to find employees (6%). These platforms are used by both active and passive job seekers and have both a professional and social component.
A distinction must also be made between the positions to be filled. Whereas, for example, unskilled workers or interns mainly find potential employers through online job exchanges, one’s own network starts playing a role for management/leadership positions.
The majority of all German still use company websites and Internet job exchanges to publish vacancies. The number of companies that have published job advertisements in print media has more than halved since 2012. Upward trends can be seen in employee referrals and personal networks. Social media platforms are being used more frequently as recruiting channels. In conclusion, it can be said that e-recruiting will become more significant in the future.
There are many platforms, but which ones make sense?
The most used e-recruiting channels worldwide, in 2020, were internet job boards. Indeed, is the most popular internet job portal among active job seekers, intermediaries, and direct employers, followed by Stepstone, and Monster. The popularity of these platforms is mainly due to the high reach, numerous filtering options, search engine optimization, and targeted advertising, through which the job ads reach the appropriate candidates. In addition, large, international job exchanges dominate over domestic ones, which is also reflected in higher numbers of website visitors.
Not all online platforms are the same; what should you look out for?
Social media platforms recorded increasing user numbers during the pandemic, both from active/passive job seekers as well as intermediaries and direct employers. This is partly due to the increasing attractiveness of the platforms and the combination of social components with professional topics and networking. The boundary between work and private life was often not clearly defined in home office, which is why such platforms gained in popularity. The leader here is LinkedIn, followed by Xing. LinkedIn stands out from Xing primarily due to its international orientation and significantly higher membership figures.
Although the professional component is in the background on Facebook and Instagram, both platforms offer the possibility of targeting desired candidates (e.g., location, age, interests, and even hobbies) due to the continuously increasing number of members and the enormous amount of available user data.
While job boards are mainly used by active job seekers, ads on social media also reach passive job seekers and thus have a higher reach. However, job postings on social media must reflect the company’s values and culture to appeal to job seekers. Three out of four job seekers rate virtual recruiting as difficult to evaluate if the company’s values match their own.
This means that social media should not be used primarily to advertise the vacant position, but rather the company’s values.
If interest is sustainably aroused, the candidate usually visits the company homepage and can then be informed about vacancies.
Contracts – How would you like to work?
4– or 5– day week
For employees, a 4-day work week can be quite attractive. For example, a hotel with a total of 8 employees could hire two additional employees if 80% of the staff changed from 40 to 32 hours per week. Because of the higher number of employees, overtime can be saved. The total personnel costs increase marginally, but increase the flexibility of the business enormously.
Employers provide further incentives through an above-average number of vacation days. For example, 30 vacation days instead of 25.
In addition to classic bonuses or revenue sharing, a wide variety of incentives can be created for all employee levels in addition to the basic salary. Support for rent, public transportation or cell phone are just a few examples.
Collective agreements have not been adequate and appropriate for a long time. In the future, salaries will increase due to the shortage of personnel. Rising personnel costs will lead to inflation in the industry, as these costs can only be offset by an increase in sales prices.
Flexible working hours
When do you want to work? Individual solutions as to when an employee completes his or her tasks increases and may be adapted in some areas. Example: A working mother with school-age children could, for example, work Monday through Friday mornings during breakfast time.
As wages increase, so do the ancillary wage costs for the company. Is it possible to create a legal framework in the long term that allows higher wages while maintaining or optimally lowering ancillary costs? It is the responsibility of politicians to create the right conditions.
There is a growing desire among employees for more free time and improved work-life balance. Employers may leverage such demands of workers by adapting employee contracts to the respective needs of individuals.
How can I keep my employees in the company and what conditions do I have to create in order to be attractive as an employer?
The key words, here, are personality development, opportunities to contribute and future prospects. Employees should be actively given responsibility. They should also be involved in finding creative solutions and be supported with cross-departmental training. Employees should play an active role in shaping further trainings. In addition to technical skills, training should also strengthen and promote social skills. It is important to actively shape career plans together with employees and provide opportunities to climb the “career ladder”. Large companies are already developing strategies in the form of retraining or offering mini apprenticeships to appeal to additional applicant groups.
Incentives and benefits
Naming and recognizing employees of the month (or year) encourages healthy competition within the company and creates incentives for good work. Offer employee benefits at partner hotels and discounts at various local businesses or access to an online benefits account. Company health services may actively contribute to the increasingly important work-life balance. Flexible salary models, childcare in the company, health care program, further training, etc. are best-practice examples. Incentives and benefits can also be economically attractive for the employer (e.g. low absenteeism rate as well as higher employee motivation and retention lead to low staff turnover).
Employer branding refers to a strategic investment in which the employee is used as a brand ambassador. Here, values and emotions are to be communicated above all in order to find the right personnel (e.g. “casual” or “traditional” product). Purely superficial campaigns with expressionless phrases (e.g. “work where others go on vacation”) are not helpful here. Evaluation platforms such as glassdoor or kununu enable employees to form an impression of the employer BEFORE making an employer decision. Integration of foreign employees by e.g. extended catering offer (halal, kosher, etc.) or cultural inclusion. Availability of contact persons as well as support in finding accommodation or insurance makes it easier for foreign professionals to gain a foothold.
The following considerations can have a major impact on employee satisfaction: Flexible working hours are of high importance. Employees should be able to plan their home office or office hours as flexible as possible and vary the volume of hours per day. Simplifying the application for parental leave or sabbatical is also important. Set up duty rosters in operational departments for at least 2 weeks to give employees planning security for private matters. Appropriate work volume so that employees still have sufficient energy for leisure activities or compensation. The prerequisite for this is a detailed process analysis by the employer.
Staff saving measures – The company needs more employees, but support is not yet in sight. What other options are there to create a healthy operational flow with existing staff?
In a hotel, specifically at the front office, there are several opportunities to benefit from digitalization. In addition to check-in, check-out, creation of guest folders and registration slips, digital room cards on smartphones, much of the guest experience can be digitized. Automated revenue management systems, which, controlled by an algorithm, adjust the overnight rate up to 1,000 times a day, also offer relief. This allows staff to focus on what guests want. New providers allow easier access to state-of-the-art software by charging based on a revenue share and thus lower fixed costs.
The active involvement of the guest in a restaurant concept can generate additional savings potential (e.g. “Hot Pot” or “Hot Stone”, where guests prepare their own food at the table). Self-service solutions for beverages or food can additionally reduce the effort for the operator. “Vending Machines” or “Honour Bars*” provide an additional gastronomic offer, outside opening hours without the need for staff. However, this idea is not feasible in all concepts.
Training & Planning
Further education and training of staff, besides the positive effects for employees and guests, also has an impact on more efficient work in many departments and results in lower staff requirements. Well-trained maids can clean a larger area more efficiently and save personnel costs in the long run. In any case; procedures and standards must first be defined and then continuously and regularly trained. This is the only way to build sustainable effectiveness.
By reducing the number of dishes on offer or the number of components in a dish, time can be saved, and a high-quality product can still be offered to the guest. In addition, process optimization, especially in preparation work, can reduce the amount of work. The use of vacuum and sous vide cooking equipment offers the possibility of preparing dishes during the day and simplifying the service process by reducing the number of operations.
By regularly monitoring the rosters and deployment times in the hotel, the need for staff can be optimized. Innovation combined with cross-training and flexible working hours lead to a more efficient use of staff. In general, cross-departmental working enables the compensation of staff absences due to illness or the coverage of peak workloads. This has already proven its worth during the crisis and must be further promoted for the future.
Cooperation with temporary staffing agencies can serve as a short-term measure in the event of staff shortages. For example, the F&B area of the hotel could be better covered during event weeks without having to hire additional staff. Provided the agency has availabilities and can be booked flexibly. If the intermediaries do not have staff either, it is important to be creative. For example, industries in the field of culture and creativity are still strongly affected by the Covid-19 pandemic and could be a support for the staff search. For example, musicians or artists who are not yet able to perform again could earn a living by working in the now resurgent hospitality industry. Furthermore, the housekeeping department could be supported with general cleaning companies. For example, the external company would take over the cleaning of public areas, for which hotel knowledge is not necessary.
Digitalization in the restaurant
A digital menu, combined with an automated ordering process, could reduce the tasks of a service employee. The latest software solutions offer multilingual ordering and allow for special requests just as with ordinary ordering. Likewise, the reservation of tables in the restaurant can be completely controlled via a portal and payment can be handled simply via the smartphone. This is sometimes only possible in a few restaurants. However, working without service staff is not a solution for every type of operation. What sounds like the optimal solution for system catering can be difficult to implement in a luxury hotel, which thrives on personal contact with guests.
Training system – Is everything running smoothly? Critically questioned and provocatively presented
The number of applicants for an apprenticeship position, as well as the number of apprentices in the hotel and catering industry, has decreased over the last 15 years in Germany, whereas in Austria the number of apprentices has remained relatively constant. An apprenticeship not only ensures a sound basic knowledge of the industry, but rather the internal transfer and consolidation of knowledge.
Hotel management schools, on the other hand, promise an equivalent education and suggest a managerial position when entering the industry and the company. The practice-based aspect of study, if provided for in the curriculum, includes an internship in which the student is expected to gain initial operational experience in a company. Initial specialized knowledge is usually not acquired until the end of the internship. To counteract this problem, continuous cooperation and coordination of goals between the company and the hotel management school must be ensured.
A dual study, with which the coworker is employed beside the study in an enterprise, offers a founded training basis results nevertheless in a high expectation attitude after the conclusion of the study.
What contribution must legislators make to make the industry sustainably attractive?
Improving the image of the industry
The hotel and tourism industry tends to be viewed in a poor light, and is associated with low pay and poor working hours. Here it is particularly important to act and market together as an industry. A single company is powerless here. In this context, a social rethink is imperative. Professions in the tourism industry must receive greater recognition in order to increase their attractiveness for future applicants. Last but not least, the image of the hotel and catering industry results from staffing schedules that are too tight, causing staff to leave and change industries due to excessive demands.
Driving integration forward
The “Plan T – Master Plan for Tourism” defines targeted measures to make the industry more attractive (e.g. making qualified immigration and training in Austria more attractive and reducing unemployment; regionalization of the shortage occupation list; reform of the Red-White-Red Card for tourism, etc.). First of all, there is the possibility of classifying certain occupational groups as shortage occupations in order to make it easier for companies to recruit skilled personnel from abroad. In general, the importance and significance of the integration of well-educated personnel, vis-à-vis the population, must be tightened. For example, existing bureaucratic hurdles should be removed in order to integrate workers from abroad into the labor market. Companies with little experience in recruiting foreign specialists can obtain free advice in advance from the European Employment Service (EURES), or the Central Foreign and Specialist Placement Office of the Federal Employment Agency (ZAV) in Germany. In order to achieve a more active political response, intensive lobbying is essential to raise awareness of the problem.