INDUSTRY SNAPSHOTS. Hospitality & Food Service

Transcription

1 INDUSTRY SNAPSHOTS Hospitality & Food Service 1

2 Serving Up Answers to HR Challenges in the Hospitality & Food Service Industry The fast-growing hospitality industry relies on its workforce to keep customers satisfied, but many companies are coping with regulatory changes by cutting benefits. When compared to other industries, employees in the hospitality sector are least likely to believe their benefits are meeting their needs, or contributing to their health, well-being and financial security 1. And that belief can impact service quality. 2

3 Industry Challenges Increased competition, rising costs, and changes in consumer needs all characterize the evolving nature of the hospitality and food service industry. A few key issues are highlighted below 2 : 1. Shallow labor pool Recruitment and retention of employees is a top challenge as a tighter national labor market means greater competition with other industries for employees. Workforce demographics are shifting to include a greater proportion of older workers while the younger labor pool is shrinking. 2. Technology growing pains The availability of technology options is starting to move from novelty to expectation among many consumers. In the race to be tech-forward, new systems are popping up in more places as guests say they want to use them. However, not all new systems are as user-friendly as they could be. 3. Changing competitive landscape There is increasing consolidation, especially among hotels. The nature of competition itself is also changing. New business models think Airbnb, Uber and OpenTable - are emerging to meet the needs of evolving consumers, posing significant challenges to traditional hospitality companies. 3 3

4 HR Challenges The 2016 Restaurant Industry Forecast from the National Restaurant Association reveals that the U.S. restaurant industry will remain the nation s second-largest private sector employer, providing career opportunities for 1 in 10 working Americans. Challenges faced by HR professionals in the hospitality and food service industry include: 1. Turnover costs Replacing one employee costs, on average, over $4, Per 1,000 employees, the average hospitality and food service company loses more than $1.7 million per year due to turnover Low morale This has a large impact on service standards, which can tarnish the reputation of a hotel, bar or restaurant and eventually erode business. The causes of low morale can vary by business, but some of the top offenders $4,000 average cost to replace one employee 4 $1.7 million (per 1,000 employees 5 ) tend to be lack of training, unskilled colleagues, understaffing, stress and few rewards Employee productivity 2. Training Hand in hand with high turnover are training problems. When the rate of retention is low, management tends to put new recruits on the floor before With 37 percent of all employees saying they are distracted by financial stress while at work, 7 the average hospitality and food service company is losing more than $530,000 every year, per 1,000 employees. 5 teaching them how to do the job properly. Plus, the high turnover can increase the chances of employees moving into managerial positions before they re ready % of employees are distracted by financial stress while at work 7 $530,000 (per 1,000 employees 5 ) 4

5 Trends Restaurant operators will face a number of headwinds in the upcoming business environment. From legislative and regulatory pressures and moderate economic growth, to labor cost increases and cybersecurity, both new and old issues will challenge profit margins and muddle operating procedures. A few trends include: 2 1. Mobile payment gaining acceptance Security and convenience are converging in mobile payment systems, with a number of wallet apps and devices entering the market. Although a majority of consumers remain on the fence about paying for meals via smartphone, a growing number say they would use or are already using that option when available, and the trend is expected to keep its trajectory in the near future. 2. American foodie 2.0 Restaurant operators say guests have higher expectations of their dining experience and pay more attention to everything from diet-specific food, to sustainability, to food sourcing and production than even just two years ago. Operators will carefully balance how to cater to these precise tastes without becoming too niche or alienating guests. 3. Enhanced benefits packages In the current marketplace, employees have more flexibility to seek out employment opportunities that better fit their needs and wants rather than remain in a position for its job security. In fact, 45 percent of employees say that they would be likely or very likely to look for other jobs outside their current organization within the next year. 8 Employers may look at enhancing benefits packages with flexible work hours, expanded benefits, more vacation or medical leave options. As voluntary benefits have become more mainstream, they play an important role in enhancing benefits packages to satisfy employees needs. Employers looking to differentiate themselves to current and prospective employees are increasingly embracing non-traditional voluntary benefits as a method of providing enhanced benefits packages. Purchasing Power s employee purchase program is one of the non-traditional voluntary benefits that supports key HR objectives by providing a no-cost, noliability benefit that gives employees a manageable, convenient way to access products and services that are often out of reach. 5

6 Citations 1 US Bureau of Labor Services Job Openings and Labor Turnover Survey. 2 National Restaurant Association 2016 Restaurant Industry Forecast. 3 Deloitte.com, Travel/Hospitality Industry Outlook, Guy Langford, CBSNews.com, How Much Does It Cost Companies to Lose Employees, Suzanne Lucas, Nov US Bureau of Labor Statistics Employer Costs for Employee Compensation 6 Chron.com, Problems Faced by HR in the Hospitality Sector, Dana Severson. 7 Harris Poll conducted on behalf of Purchasing Power, Society for Human Resource Management (SHRM), Employee Job Satisfaction and Engagement: Revitalizing a Changing Workforce, April About Purchasing Power We help employees who are underserved by traditional financing options access life-enhancing products and services. Employees can purchase the items they need and affordably spread payments across 12 months to give them peace of mind and control over their finances. Our pricing is transparent with no hidden fees, no interest, no credit checks. Why We Do It To improve employee financial well-being To empower people to take control of their lives To help organizations recruit and retain employees Visit us at PurchasingPower.com/Employers. Purchasing Power is a registered trademark of Purchasing Power, LLC. Other trademarks or registered trademarks used are the property of their respective owners. Pub. Date Purchasing Power, LLC. All rights reserved * Definitive 2016 customer survey responses 6