NASHVILLE, Tennessee — How the hotel industry navigates the labor shortage in the next year could put it ahead or put it behind five or 10 years from now.
During the "Shaping the Workforce for Today and Tomorrow" panel at the Hotel Data Conference, industry leaders spoke about the ways they're trying to better reach young employees. Part of that effort includes paying competitive wages, but modernizing career development tracks and emphasizing company culture are just as important, panelists said.
Chris Green, president of Remington Hospitality, said the veterans and leaders of the hotel industry need to put in more effort to understand their younger associates better. Often, they might want a quicker track to career advancement that goes against the historical way of doing things, but that line of thinking has to change.
"The first thing we have to do in today's environment is — and it's easy for me because I came from that environment — you work this many years at this job and then you can maybe get a chance at the next job. We have to take off our thinking caps and listen to this generation because they have no reference for how we feel about where they want to go with their careers," Green said.
Green shared a story about his niece who recently graduated college and works in the pharmaceuticals industry. After nine months in the business, she applied for a promotion to a regional sales position but didn't get it. Green said first he asked his niece why she thought she was qualified for the promotion so soon after joining the workforce, but he admitted it got him thinking about the young employees in the hospitality industry.
"We can either be frustrated by it and we could push back against it, or we can lean into it and learn how to work alongside them," he said. "Because I’m not going to be in this room 10 years from today; somebody else is going to be in this room, and we have a responsibility to figure out how to let them make it their own and succeed. And if we don't, we're just going to be fighting against it. We don't want to be the industry fighting against the talent that wants to work."
Leticia Proctor, executive vice president of sales, marketing and revenue management at Donohoe Hospitality Services, said her company has broadened its hiring search to job candidates that may not have hospitality experience.
"We are really focused on introducing hospitality to people that have transferable degrees that can also work in our space," Proctor said. "We want to expose them to it at a high level, not just at the property level. We do dual tracks. ... I have a responsibility to make sure that other people have an opportunity to grow. That's how we follow that pipeline; if we don't make a concentrated effort then we’ll be in this space five years from now. You've got to introduce them and also reach them where they are."
Tess McGoldrick, vice president of travel and hospitality at Revenue Analytics, said she looks for a certain X factor in a job candidate that will make them not just a good revenue manager, but a great one.
"I can teach somebody hospitality revenue management. I can't teach you how to be a critical thinker or how to tell a story of data or how to want to dig in, always understanding the why," she said. "We do a really good job of hiring folks that have that intellectual curiosity, and then once they're there, they find what they're into. And you just spend time with them to figure out how to give them more of that."
How High Will Wages Go?
Remington Hospitality's wage growth has been approximately 38% over the past 30 months, Green said, and there's no avoiding paying employees more.
"If we don't fix wages in our industry, if we don't compete, we won’t attract talent. Is it crushing margins? Absolutely," Green said. "Because remember, it's not just the base wage that goes on top. You've got to have world-class benefits and that is not cheap. Our benefit costs are up 12% to 15% the past three years, it is driving margins down, which has been offset by ... top-line revenue. ADR has been going up, occupancy has been down and staffing at the hotels has been down."
He added operators will face tough questions from hotel owners looking for returns when operating margins get squeezed.
"We're going to have to struggle to go out to the marketplace and get debt for new hotels and developments and refinancing when we’re showing lower margins," Green said. "We're going to have to work collaboratively as an industry to make those margins grow, which we can do by holding ADR up, using technology efficiently and then training our people to be better and do more things with, frankly, less, which I don't like a lot, but that's just the way the business is going to be."
While offering higher wages is one path to attracting hires and retaining employees, it's not the be-all and end-all, said Terry Donovan, executive vice president of AETHOS Consulting Group.
"It's not just a matter of paying more and anchoring at the top of the market," he said. "If you don't have the culture there, you're just going to churn through people. Some of the companies that pay the highest also have the most turnover. You're not going to be able to just overpay your way out of this. We keep going back to this: You really have to develop that culture and get people that want to be there."
Higher average rates at hotels have led to a more demanding customer, and if employees feel underpaid or burnt out, they won't deliver their best service, Proctor said.
"This new customer is not as accommodating as what they're used to. So we have to pay more, we have to," Proctor said. "But again, we also have to do other things, not just wages. Not just benefits, but do we acknowledge what they bring to the table, the associates? Because if we don't take care of that mental health and normalize bringing that whole person to work, then we're going to lose them in the long run anyway, whether you pay more wages or not."
Making Diversity, Equity and Inclusion Second Nature
Proctor said Donohoe has seen the benefits of prioritizing diversity, equity and inclusion at all levels of the organization.
"You have a broader perspective of what people are bringing to the room, like shared experiences, and it helps foster innovation," she said. "It helps foster collaboration when people realize that they're welcome into the room. ... And what happens once they get into your establishment or your organization? Do they feel welcomed, that you trust their opinions? Do they have a voice? Do you trust them to make decisions? Do you empower them?"
To encourage diversity in the hiring stage, Donovan said he advises his clients to broaden the interview pool. A hiring manager might find the right candidate for a job opening that's yet to materialize.
"Interview more people than less. ... Interview, interview, interview," he said. "Make it a mandate to include that interview process because you're going to build relationships and even if you're not hiring for that particular position you're searching for, six months down the road, they may be perfect."
Green said he worries that diversity, equity and inclusion initiatives — as well as environmental, social and governance efforts — could just become a forgotten part of a company's handbook. He added an industrywide effort is needed to make the hospitality business more diverse, and it won't happen overnight.
"We have to look around and take notice of what's around us, and had I done a better job as I was growing my career, I would have noticed that we weren't doing the right things to create a diverse population," Green said. "I do believe as an industry we are now. ... This room looks different today and that makes me happy. And five years from now it's going to look vastly different than it does today, as long as we make it part of life, not a policy.
"Our C-suites and our line-level managers need to be pouring into people no matter what they look like, talk like, whatever, because that's the only way we're gonna win together."