With inflation at soaring rates and the cost of living increasing, in 2023, research has shown that the hospitality industry accounted for 10% of administrations, a 22% increase from the previous year.
While this can be attributed to various factors, such as rising food and energy prices and slashing the pockets and supply chains of businesses, there’s also another issue at play: the ever-changing needs of the workforce.
You can’t run a business, let alone a hospitality business, without a reliable and dedicated team of employees. However, unfortunately, the industry faces several HR challenges that make maintaining a stable and satisfied workforce difficult.
So, in this article, we will delve into the top HR challenges in the hospitality industry in 2023 and explore how businesses can navigate these obstacles to create a better 2024.
High employee turnover
According to our 2023 HR Metrics That Impact Report, surveying over 500 HR professionals in the UK, the hospitality industry – specifically hotels, restaurants, and food services – has the highest annual turnover. Hotels had a staggering 105% annual turnover rate, while restaurants and food services were not far behind with a 92.98% rate.
This high employee turnover is a prevalent issue in the industry and can be linked to various factors such as low wages, lack of career growth opportunities, and long working hours.
However, the impact of high employee turnover on business operations cannot be underestimated. Constantly recruiting and training new staff can be time-consuming and costly. It also leads to a decrease in staff morale, as employees may feel undervalued or unsupported, which can ultimately affect the level of service provided to guests.
To combat this challenge, businesses in the hospitality industry must focus on retention strategies such as offering competitive salaries, providing opportunities for career growth and development, and improving work-life balance for employees. By investing in their workforce, businesses can reduce employee turnover and maintain a more stable team.
Seasonal staffing needs
The hospitality industry is heavily reliant on seasonal staffing to manage peak times. However, when we recruit our temporary workforce, it tends to be at peak times when there is a higher demand for our services. As a result, onboarding and training can be rushed, leading to a lack of proper knowledge and skills among staff.
And while we may see an influx of customers during these busy periods, with the bookings and reservations being at an all-time high, if service quality is compromised due to insufficient training, it can lead to negative guest experiences and damage the brand’s reputation.
To tackle this challenge, businesses in the hospitality industry must ensure that they have efficient hiring processes in place that allow for proper screening and training of seasonal staff. They must also prioritise ongoing development and support for temporary employees, providing thorough training programs and assigning experienced mentors or buddies to guide them.
Compliance with labour laws
No business wants to find themselves in an employment tribunal, yet this is a very real risk for those who do not adhere to labour laws and regulations. Especially in the hospitality industry, where employees work long hours and have strenuous working conditions, businesses must ensure that they follow all necessary regulations.
Yes, we have the Working Time Directive, which outlines the maximum working hours and minimum rest periods for employees. But with new legislation affecting the hospitality industry, such as stricter regulations around tipping, businesses need to stay informed and compliant.
Going into 2024, if we are going to improve the reputation of the hospitality industry, we need to ensure that our business operations are ethical and comply with all labour laws, or else we risk the possibility of costly legal issues and damage to a brand’s reputation management.
Diversity and inclusion
Having a diverse team can bring various perspectives and creativity to the table, enhancing guest experiences. However, it can also pose challenges, such as language barriers and cultural differences that may affect communication and teamwork.
To foster diversity and inclusion in the workforce, hospitality businesses must have inclusive hiring practices, promote cultural sensitivity and awareness among employees, and provide training on effectively communicating in a multicultural workforce environment. This will improve guest experiences and create a welcoming and inclusive workplace for all employees.
Training and development
One of the challenges businesses face is overcoming the resource constraints to provide continuous education for their staff. With long working hours and busy schedules, it can be challenging to fit in training sessions without affecting day-to-day operations.
But it cannot be stressed enough how vital continuous education is for the success of a business. Employees who are up-to-date with industry trends, technologies, and customer service skills can provide a better experience for guests, leading to increased customer satisfaction and loyalty.
Therefore, it is highly recommended that businesses leverage e-learning platforms or incorporate on-the-job training into daily operations to help employees continue learning and developing while performing their duties.
In a people-focused industry like hospitality, employee engagement is crucial. Engaged employees are motivated, satisfied with their jobs, and committed to providing the best service possible. On the other hand, disengaged employees can be detrimental to a business’s success.
Disengaged staff may lack motivation, leading to reduced productivity and service quality. It can also lead to high employee turnover as employees may seek better job opportunities elsewhere.
To keep hospitality employees engaged and motivated to enhance guest satisfaction, businesses must create a positive work environment, recognise and reward employees’ hard work, and provide opportunities for growth and development.
But, as HR professionals, we know that no one-size-fits-all approach works for employee engagement.Therefore, moving forward, it is highly recommended that employee listening tools are used to identify what motivates and engages your unique workforce and then tailor employee engagement strategies accordingly.
Recruitment and talent shortages
The hospitality industry has always been competitive when it comes to recruitment. The battle to who has the best remuneration package, who can offer the most attractive perks and benefits, and who can provide the best career progression opportunities is ongoing.
But with the rise of remote work and technology-driven jobs, the talent competition has intensified. The hospitality industry is now not only competing with other businesses in its sector but also industries that offer more flexible working arrangements and higher salaries.
Reports from the past year have brought to light an alarming shortage of staff in the hospitality sector, reaching such extremes that even the restaurants in the Houses of Parliament had to curtail their opening hours. This staffing crisis has underscored the critical need for efficient recruitment strategies.
The inability to meet staffing requirements not only disrupts service operational efficiency but also impacts the reputation of the establishments involved. Moving forward, the hospitality industry must address these challenges head-on, improving recruitment processes, offering competitive remuneration packages, and developing strategic partnerships with educational institutions to attract a steady stream of skilled talent.
Leveraging HR and Workforce Management technology
In an industry where time is of the essence and efficiency is critical to success, leveraging technology can significantly benefit hospitality businesses. And that’s where elementsuite comes in.
Understanding the unique needs of the hospitality industry, elementsuite’s cutting-edge HR software revolutionises staff scheduling by streamlining the process, improving accuracy, reducing administrative burdens, and providing real-time updates.
With elementsuite’s user-friendly interface and social features, employees can access scheduling information via their mobile devices, ensuring they stay connected even while on-the-go.
But it’s not just about creating schedules – our software also integrates with existing systems, making the transition seamless. It offers robust security and compliance features to protect sensitive data, and it can be customised to fit the specific needs of each business.
By leveraging HR and WFM technology, hospitality businesses can address challenges like high employee turnover, seasonal staffing needs, labour law compliance, diversity and inclusion, training and development, employee engagement, and recruitment and talent shortages. It is a valuable tool that not only saves time and resources but also enhances business operations and improves guest experiences.
For more information on how elementsuite can help your hospitality business overcome HR challenges, visit our website or contact us today. Let’s make 2024 a year of success for the hospitality industry together.