Accommodating the Hospitality Labor Shortfall
Revenue growth requires happy guests, and happy guests need a stable hospitality workforce.
As a location-based, customer-centric industry, hospitality businesses are less able to pursue offshoring and AI or automation to supplement labor shortages and growing demand for services. While roles in hotel management and hospitality operations are attractive, the greatest threat is the ability to staff workers like housekeepers, building maintenance workers, cooks, and clerks—so local workforce development is key to ensure guest satisfaction and business continuity.
Risk Factors
3.53
Occupation Risk Score
Hotels, venues, and restaurants are largely competing for the same core talent: facilities managers, first-line supervisors, cooks and prep workers, bartenders, wait staff, and cleaners. While help can come from many different directions, securing these workers is also vulnerable. More than other sectors, hospitality relies on young and immigrant workers, and the youth workforce especially has the means to not participate in the workforce in favor of focusing on school activities and higher education. Management and supervisor roles rely on the prime-age workforce, which is participating less in hospitality. Organizations will need to engage the younger workforce, offering benefits such as scholarships, mentoring, or career prep, to secure critical roles.
2.40
Market Risk Score
While supply is affected by lack of youth participation, the demand for services from retiring workers increases—Baby Boomers, who are retiring earlier than projected, are taking advantage of their time and money to enjoy travel and dining. Tourist destinations are already seeing declines in prime-age workforce participation. New Orleans saw a prime-age workforce decline of 20%, while Las Vegas, Nev., Orlando, Fla., and San Diego, Calif. all declined by 18%. As workers continue to retire, these projections can be expected to hold steady for the next 10 years. Chain restaurants can expect a similar dynamic, but especially aggressive in less populated areas as workers retire and prime-age working populations dwindle.
4.00
Industry Risk Score
Younger workers, already in short supply, are less attracted to restaurant and hotel maintenance roles due to long hours, unpredictable schedules, lagging wages and benefits, physically demanding tasks, perceptions of career limitations, and commuting. Many workers in hotel and restaurant management and guest services are over the age of 55, leaving critical operational roles vacant while prime-age workers need to catch up on financial and people management skills. Seasonal and geographic fluctuations also make it difficult to maintain a stable, skills-aligned workforce year-round. Roles such as line cooks, bussers, and housekeepers have largely been filled by foreign-born workers. The hospitality industry does not have the luxury of offsetting labor shortages by offshoring, and AI is not feasible for the very roles in the greatest shortage.
3.02
AI Skills Gap Score
Disruptive skills are moderately impacting hospitality in management and operations roles, though organizational leaders need to focus on upskilling their workforce in data analytics and forecasting to optimize resource allocation, booking trends, and revenue and inventory management. Operations-oriented skills, like cybersecurity, sustainability, and digital marketing, also need to be a competitive priority. For the majority of hospitality roles, however, AI and automation are simply not viable. AI cannot tend bar, make beds, or wait tables, all of which are important services to ensure guest satisfaction, and as a result, revenue-driving brand affinity.
Hospitality Organizations in the Fortune 1000
In the Workforce Risk Outlook, Lightcast found little correlation between workforce risk exposure and their Fortune 1000 ranking. C-suite leaders must align their workforce strategies with their quadrant position, as opposed to assuming their revenue makes them immune.
High Risk/High Scale to Address: Organizations in this quadrant face significant risk of being disrupted in their industry, but also have the financial resources to reduce their risk if they are proactive. These organizations should invest in automation for routine tasks, enhance employee retention through career development programs, and leverage data analytics to optimize staffing levels in response to demand fluctuations.
High Risk/Lower Scale to Address: Organizations within the riskiest quadrant are lower on the competitive ladder and have less resources to address their incoming risk. These organizations must focus on cross-training staff, streamlining operations through mobile ordering and self-service technology, and building strong employer branding to attract and retain talent.
Lower Risk/High Scale to Address: Organizations in this quadrant may not face immediate workforce shortages, but should remain proactive to maintain and reduce their exposure to risk. These organizations should explore lifestyle employee benefits, adopt sustainable hospitality practices, and leverage AI-driven customer experience tools to sustain workforce stability and brand loyalty.
Lower Risk/Lower Scale to Address: Organizations in this quadrant, if they are proactive, have a chance to be the disruptors. Specifically, they can disrupt industry competitors in the High Risk/High Scale quadrant. These organizations should focus on niche offerings, implement creative workforce strategies such as gig-based staffing, and invest in brand affinity to attract both customers and skilled employees in a competitive talent market.
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Solving Hospitality Workforce Management
Talent Analyst
Strategies to Secure Service Staff
Hotel and restaurant operations hinge on securing guest experience roles, such as clerks, cooks, and cleaners. With workers in these roles in shortage, and technology as no replacement, organizations will need to focus on attracting workers by benchmarking compensations and staying ahead of competitor hiring trends. Standardizing roles, skills, and pay models across locations ensures that employees and potential candidates are attracted to opportunities; additionally, employers can secure entry-level roles and place them on a skill path for growth, enhancing retention efforts across locations.
How Hotels Are Ensuring Business Continuity with Data
A Fortune 500 hospitality corporation faced significant challenges in talent acquisition and management. With insights into global labor markets, evolving skills, and competitive trends, it developed a skills-based compensation model and ensured pay transparency compliance. Lightcast labor market analytics, job postings data, and standardized taxonomies drove new talent acquisition strategies, more accurate job pricing models, and addressed skills gaps through competitive benchmarking, ensuring retention and maintaining its foothold in delivering exceptional guest experiences worldwide.
Talent Transform
Strategies for Staying Ahead of Market Demographics
One of the biggest risks to hospitality companies is their ability to expand into new markets. Understanding worker supply and market demand is key to developing expansion strategies that foster growth and reduce risks of closures. Fast food is especially dependent on a younger workforce, who are more fluid in changing companies. With data on employment patterns, competitor insights, and the pool of new workers entering the labor force, restaurants can offer attractive compensation, worker flexibility, and an employer brand that appeals to the next generation across existing and new markets.
How a Fast Food Favorite is Expanding Markets
Expanding beyond its existing 750 stores into new markets presented complex talent landscapes, tighter hiring competition, and questionable workforce availability for a hybrid convenience store and fast food chain. With tailored labor market insights, like occupational growth trends over time, diversity, compensation, and role demand, Lightcast’s data is enhancing the retailer’s ability to pursue new markets with confidence. Across the roles hardest to fill—store clerks, fast food workers, and truckers—it has been able to expand operations by using talent intelligence to secure its workforce.
