The hiring landscape has undergone an unprecedented change in the past few months, as some industries have been forced to minimize their operations during the coronavirus pandemic, while others have ramped up hiring in answer to rising consumer demand.
There are few people with their fingers on the pulse of industry trends as much as those involved in recruiting and training hospitality employees. As part of Long Live Lodging's regular Lodging Leaders (LL) podcast, they invited distinguished guests to weigh in on the current situation, and share how businesses can pivot to meet unforeseen challenges and begin to recover. Listen to the full podcast here.
Learn more in this transcript:
Carver: As recovery starts, there is going to be a graduated process of bringing people back. Some people will not want to go back to the positions they were in, some people will be going to different positions, a lot of people will go back, it will be simply calling them back and we will be able to re-plug them into the boxes as we get there. But it seems there is going to be a fair amount of movement in the industry that we have not seen in a while, I think that's going to happen. So, what we're being told by our partners is to be prepared for recovery because we are probably be early called on the recovery side to say help us get in and get stabilized, as we bring more of our people back, and get the right people back in the right condition in the right place in the right time.
Albano: This is Lodging Leaders podcast with John Albano and Judy Maxwell – Session #266. Welcome to the LL podcast, where top performing hoteliers and hospitality industry experts share powerful insights and actionable advice to help you grow your portfolio. And now your host John Albano. Hey LL, thank you so much for tuning in today. You can find the show notes, links, resources, and comment section for this episode at lodgingleaders.com/266 – Return Policies: Hotel industry works out rehiring plans.
As the recognized COVID-19 infection rate began to gain strength in the US in mid-March, lodging industry analysts said they expected at least half of the nation's 4 million hotel employees would be laid off. It's a startling number when you consider that six weeks ago, most hospitality jobs were firmly intact. In fact, in the beginning of 2020, the hospitality industry was grappling with a problem indicative of a healthy economy – a shallow labor pool. Competition from employers in and outside the industry forced hotel owners and operators to increase wages and figure out ways to retain staff, especially hourly workers. What a difference a health pandemic can make. April's unemployment figures are expected to be unnerving. 22,000,000 people filed jobless claims from mid-March to mid-April. In the meantime, the Trump administration in some states are hatching plans to reopen communities and businesses beginning next month. In those cases, hoteliers will face some unique challenges in bringing back furloughed workers who are either comfortable in unemployment, uncomfortable with public-facing jobs, or have found work elsewhere. In this episode of LL, we talked to people involved in recruiting and training hospitality employees to find out what they're seeing as the coronavirus pandemic has forced hotels to reduce their workforces.
Albano: In reporting the increase in unemployment claims caused by the coronavirus crisis, the US Bureau of Labor statistics selected March 12th as its reference point. That's just a few days before the impact of COVID-19 began to be felt on the nation's lodging industry. It's hard to remember that in January and February, the hotel industry's biggest challenge was recruiting and retaining employees, especially hourly workers. Think about this: last July, the Bureau of Labor statistics reported the hospitality industry had 840,000 unfilled positions. Now refocus and think about this: at the end of March, 460,000 hospitality jobs or lost to the coronavirus pandemic according to BLS. Approximately 14,000 of those jobs were in hotels. The rest were in restaurants and bars. Overall at the end of March, more than 700,000 people were newly unemployed the nation's jobless rate increased nearly a full percentage point to nearly 4.4%. Now we don't know what the full picture for April looks like yet, but you can bet it's not going to be pretty. Ron Mitchell is CEO of Virgil Holdings, which owns Hcareers, a career assessment and analytics platform to serve job seekers as well as human resource managers in the hospitality sector. Hcareers' target niche is hourly workers in search of a career path.
Mitchell: I think this crisis is nothing that we've seen before in the last, you know I'd probably go back to World War 2, I wasn't alive then, but I can imagine how disruptive the war was. Then similarly, I have lived through the stock crash of 1987, the dotcom bust of 2000, the recession in the 90s, of course 9/11, and most recently the Great Recession. And this one is just very different and even if you look back to the Great Recession of 2008, I remember being on a plane coming back to New York and hearing that Bear Stearns stock price had gone to like below a dollar. That happened in April, you know Lehman Brothers didn't collapse until September. So, there was a long period of time where this sort of disaster took place, even with respect to 9/11, it was a flight ban for four days, and here we might be sheltering in place for four months. It's just the scale and scope. The other really unique thing when it comes to the labor market is really interesting, particularly as it relates to the hotel industry. In January, the conversation with every single employer was: “We cannot find enough talent. How can we open up talent pipers?” I would tell you as late as late February, that conversation. Then within three weeks, the conversation completely changes to: now we're laying off 50% of our staff, we’re closing hotels. It's just been so abrupt, and that context is really important because when we look at what's going on in the market today, particularly again with respect to hotels, they are really in triage mode. It's not too dissimilar to what the hospitals are dealing with, in particularly in New York, with huge influx of patients and the hotels are in a similar state of panic and flux right now. From the largest management companies and brands, all around to the smallest player. There's not even a set of defined protocols of how people are handling things. It's just way too early.
Albano: Mitchell said the lodging industry is pooling its resources to fight the crisis together, including the American Hotel and Lodging Association Foundation that’s dedicated to recruiting and training hospitality workers. Hcareers have been part of AHLF and its mission before the crisis. The key focus now is helping laid off workers find jobs, and that means teaming up with companies outside the hospitality industry. Major companies that were competitors pre-crisis had become partners with hotel companies, such as Marriott international, Hilton, and Wyndham Hotels and Resorts, who have alerted workers to job opportunities with the likes of Amazon, Walmart, Kroger, Walgreens, and other major retailers.
Mitchell: What you are finding among the hotel industry, and we do have a sort of an insight here in our work with the AHLF, we’re very close with them, a premium premier partner, platinum partner with them, and are involved in and engaged in a lot of these conversations with a lot of the HR leaders. I will say that it's been tremendous, the amount of collaboration within the industry to try and figure out how to best address some of these issues and best support their people. These are organizations that compete competitively every single day of the year but now, they are helping each other identify resources, information, processes, in order to help their employees finance from work, figure out best practices for managing furloughs or health care, whatever it might be. it's really been encouraging I think of how industry, private industry, can really come together to really support in this crisis.
Albano: Rosanna Maietta is president of the American Hotel and Lodging Foundation. Until the pandemic, AHLF was recruiting high school students for its training programs and providing advanced training to existing employees. It also oversees a $1,000,000 college scholarship program. Maietta said the crisis has sharpened the focus of AHLF’s mission, while also forcing it to pivot to meet the industry's immediate needs.
Maietta: Our challenge on the AHLF foundation side is that the core focus of our mission was really to help fill the jobs gap. A lot of our programs, majority of them, were really focused on training new workers into the hospitality industry, particularly at-risk youth, getting them trained up for jobs in hotels; and helping those who are already in the industry get a leg up and move up the ladder through certifications or other programs. That virtually has come to a halt if you think about what the foundation's role has been. We've had to do some pivoting ourselves to really think strategically about what we offer and how and we shift that at this time when all our employees now have been furloughed. How can we keep that link to the industry? SO, we've done a couple of things.
First, we were reaching out to our friends in retail who came to us during this crisis and said, whether it's Walmart or Amazon or Quick, one of our partners, so many others, who have said: “Look, we can help your workers at this time” They were experiencing surges of jobs because of the way everything has shifted. So, we were able to pull together job specs with their help, we have connected all of these companies that are hiring now and who want to hire hospitality workers with our industry. That was the very first thing we did at the outset, was making those connections to our heads of HR with the Walmart and Amazon of the world. So that if they were able to connect their hotel workers with those retailers, it's a win-win.
The second thing we did is we looked at what could we do with our resources. Certainly, we had promised this year to disperse $1,000,000 in scholarships and academic scholarships, we're still moving through that process now more than ever, students are going to need that money. Although we're working with the academic community because they've had to shift their own deadlines for the academic school year, the 2021 academic school year, so we've had to shift those deadlines. But we fully intend to disperse $1,000,000 this year, it's needed more than ever. And then we looked at where we were going to spend our money on some of these other programs, and really revert and refocus so that we could, just last week, announced free training and education courses for hotel employees. Using that money to shift and offer some free certification courses, we looked at what the most popular ones were that were all around hospitality management courses, we picked the top three and we worked with our partners at the educational Institute, to offer those for free for the month of April. And within less than a week, we've already seen 3,000 people sign up.
Albano: Like Ron Mitchell, Maietta sees the job opportunities at Walmart and others as temporary. She does concede, however, that many of those workers may not return to the lodging industry for one reason or another.
Maietta: If you think about our industry, we're really just all about our people right. Even though that was a consideration, we want to make sure that our employees have what they need for today. We don't want to stand in their way from getting another job and supporting their families. A lot of our workers are living paycheck to paycheck, so for us, the most important thing is making sure that they have work if they can get it and if they want it. Some may choose to just stay on unemployment while they can, and I know a lot of our member companies were really trying to ensure that they were furloughed versus being laid off so that they could have that connectivity to benefits and other things. That was really important to us. I think our goal with launching the free training and resources is just that what you mentioned, to make sure they still have that connectivity to the industry.
It really is an unknown, what happens when all this is said and done, and when folks can get back to work and we all get the all clear, how many of those employees will pivot back to the hospitality industry. Obviously, that's our hope, but we don't know for sure. I think that's the foundation, where it is uniquely positioned to jump back in and help make that connectivity part of our plan. We had between 5 and 6 different job fairs planned around the country for the month of April, we had to put all of that on hold. But we can easily pivot and shift and be ready to have those hiring fairs again if needed. I think our members will look to us to help lead the way on that. One does hope that the balance returns to normal in terms of where people are working and where the supply and demand is, so that that some of those hotel workers who right now maybe are looking for some positioning somewhere else will come back simply because they have that connectivity to the industry.
Culture in the hotel industry is a big thing. I'm sure as you've spoken to many of our CEOs from across the spectrum, it's their people first and they all say it from their heart. You can't be good at guest service if you don't treat your employees well first, that is something that has always been a very important top-of-mind. It's why they're so willing to make partnerships, you're seeing different brands and companies forging those partnerships directly with other corporations that have more need right now for jobs so that they can do right by their employees.
Albano: Mitchell sees major hotel companies, as well as hotel owners, using software programs such as applicant tracking systems or ATS to stay in touch with furloughed workers. It's a smart move that encourages the display staff to return post-crisis
Mitchell: A lot of the forward thinking, and particularly larger, I think it is important to disaggregate the industry. There are these larger owner operated management companies, and then there's the smaller franchisees that may on 1, 2, or 3 hotels. It's somewhat different on the side of the resources although everyone is adversely affected. But a lot of those forward thinking, where larger organizations are thinking about the community, and how they can maintain relationships with these folks that they've just furloughed or in some cases, laid off. They didn't have time to prepare for that, and so it's very active but also very important for some of them to be using their ATS platforms to manage some of those communications to maintain some constant communication. That's part of the outreach around new opportunities in temp jobs or whatever and offering these training resources that come through AHLF which I commend has been sort of forward thinking with HLEI, which is the national Restaurant Association in a whole suite of credentials. So, I do think that in this time, it is really important for everyone to think about what they can do to enhance their profile. Because the reality is that this is having a meaningful economic effect and I think economists are saying that the economy will not come back to 100% of where it was. If it comes back to 85% of where it was, that's a whole lot of people who will be looking for jobs, that now are competitive in the space. And the hotel industry and the lodging industry and the travel industry I think will move even more slowly because people have to get more accustomed to sort of travel and groups. That may come back initially, there be a bump up to 70%.
Albano: As the lodging industry begins to revive, Mitchell advises laid off employees to use this downtime to improve their chances at getting called back, and maybe even rehired in a larger role with higher pay.
Mitchell: Any work that people can do to build their skill set is important. The critical question is, before you start going down a pathway of just grabbing a credential, or taking a course, you really need to be thoughtful about researching and understanding where work is going, what skills will be valued. This will be the great travesty, but also the great opportunity. Not all learning is equally as accretive. As you're looking at where the opportunities are in the industry, we got to know how the industry is performing and what skills are going to be required.
Albano: Desmond Lim knows first-hand how much hourly service workers depend on a robust economy. When he was 20 years old, Lim immigrated to the US from Singapore where his father was a delivery driver and his mother a hotel housekeeper. Lim worked hourly jobs to pay his way through college, graduating from Harvard and MIT's media lab. He co-founded Workstream, an automated hiring platform aimed at reducing employers hiring time in connecting competitive job seekers to opportunities. Lim notes there are more than 60 million hourly workers in America. “They are under rated,” he said, which is undeserved because most companies hire hourly workers. His program is in demand these days, as retailers and health care providers ramp up hiring to meet nice generated by the COVID-19 crisis. Even gig workers such as food and meal delivery drivers are in high demand. Looking ahead to immediate post-crisis, Lim sees demand in the lodging industry shifting toward workers who can do deep cleaning of hotel rooms and public areas.
Lim: I think from what I see, is that there is definitely a range of jobs that will open up. Even today, we see many of our clients are trying to hire people to prep for the hiring surge that would actually start again very soon. There is surely a trend that we think will converse soon. We do think the extend of cleaning staffs, people who clean rooms and hotels, that is something that is very “top of the leaves”, and some of the jobs that we have seen, because many of the hotels are trying to get their rooms very well prepared when things do reopen. So, being clean and being hygienic, that will be one of the very topics that we really have to focus on. In these past few days, we seen quite a few businesses trying to prepare for its opening, some of these are the cleaners who they are trying to hire. They are trying to hire much more service crew because having good service and trying to educate and share with the client that “things are good, we are ready to serve,” that is the key.
Albano: Lim believes hourly workers will rule the day as America eases back into business post-pandemic.
Lim: When this virus comes down and things become better, I think that there will be much more hourly workers than ever. Being in a space for hotel or some other sectors, I think that it will surge in growth. The second point I have to make is that, in terms of the benefits coverage health care for these hourly folks, those will will grow too. I think that hourly roles will grow because businesses will be slightly more cautious in terms of hiring full-time people right away. That's the first thing I have to make. People are going to want to hire people, but the fastest way to bring them on is via an hourly structure. That is the trend which I've been seeing as I talk to other owners. I think there are some truth in that companies like Amazon, Uber, are going to grow in size and scale. So, in terms of the growth of people in the gig space and this hourly space, those will only grow further.
Albano: As many job recruiters in training experts are helping the lodging industry navigate the crisis, Joel Carver of Carver companies has a unique point of view. Carver has been in the hotel industry for decades. He founded Carver companies and its subsidiary, Carver Hotel Group, about seven years ago to help management firms and hotel owners recruit and train employees, from executives, to rank and file, to temporary workers. The mix gives Carver insights that the industry will recover in good time, but it will be a different world.
Carver: From the task force perspective, the demand for that is down pretty much relative to what we're seeing demand is down in the United States. Today, demand is down about 90%. It hasn’t gone away, which was surprising to me a little bit, I thought we would really see a zero-based demand, but we have not gotten to that yet. We are still seeing demand for support typically on the operation. It’s much smaller than it was, but we are still seeing some demand. Like everyone else, we are following the industry, so there's no surprise where my friend that I'm talking to, I think we're exactly where they are. The flip side of that is, we are poised for recovery more quickly than the industry itself. From the recruiting perspective, I will say it's interesting that largely, the searches that we were already engaged in, prior to COVID-19, are continuing. Our industry partners are saying that when we come back, we need the positions, we need to move ahead. We’ve seen several placements that went ahead launched even during this time. It is surprising seeing the direction the sales are going in to start new positions during this time. From an executive recruiting perspective, yes, the demand is down, but it's not down with the same trajectory from the way the industry is going down. That is a little bit surprising to me.
As recovery starts, there is going to be a graduated process of bringing people back. Some people will not want to go back to the positions they were in, some people will be going to different positions, a lot of people will go back, it will be simply calling them back and we will be able to re-plug them into the boxes as we get there. But it seems there is going to be a fair amount of movement in the industry that we have not seen in a while, I think that's going to happen. So, what we're being told by our partners is to be prepared for recovery because we are probably be early called on the recovery side to say help us get in and get stabilized, as we bring more of our people back, and get the right people back in the right condition in the right place in the right time.
Albano: Carver sees a trend unfolding as to what order the hospitality industry will begin its come back.
Carver: The other thing is that, I always have to put my sales hat back on, and I counted, since I began in the industry since 1983 as a sales manager, is my 7th crisis in the industry. My earlier one was in the oil sales in Texas, I was the young director in sales and marketing, and I thought I'd never lived through that. I think we're going to see the same recovery pattern we've seen everywhere else, where we are going to see business corporates come back first, then as people get a couple of paychecks in their pocket, I think we're going to begin to see leisure travel begin to come back. It is not going to be overnight. What we are saying in long game is going to be group recovery because everybody I'm talking to says that the groups that have canceled or rebooked are rebooking for 2021.
Albano: Like others that we have interviewed for this report, Carver says he believes most of the laid off workers who have found jobs or are collecting unemployment will eventually return to the hospitality industry, but they will be more selective post-crisis.
Carver: I have been following an interesting conversation on Facebook. There are a couple of hospitality groups morphed in Facebook recently, and I’ve been watching them. There's an interesting thread going on which I've stayed out of, but I've been eavesdropping on because it was very interesting. The other thing that is happening is people are realizing how different companies are treating their boats differently. I think the companies that do the right thing are going to come out a lot stronger, and the company that aren't doing the right things are going to come out a lot weaker, if they come out at all.
Closing: Thanks for tuning into the special edition of LL. This is episode 266 and you can read the show notes, resources links, and comments section for this episode at lodgingleaders.com/266. Thank you so much for listening in today. I look forward to seeing you next week. Take care and Long Live Lodging.
To sum it up: In this LL podcast, we get a close-up view of the impacts of the coronavirus on the hospitality industry, one of the hardest hit in this pandemic. Industry experts shared what the long, convoluted road to recovery will look like, and how hotels and other hospitality businesses need to adapt to have a better chance of bouncing back.
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