Businesses across the state are feeling the pinch caused by the labor shortage. Washington Hospitality Association President & CEO Anthony Anton estimates that it will be about five years before the shortage ends, leaving many to wonder what they can do.
In October, Suzan Sturholm, president of All Things HR, presented a webinar for members to learn what is causing the labor shortage. We’ll address ideas to help alleviate some of these challenges in another article on our website.
She first presented the why of it.
In August 2022, unemployment rates in Washington state were at 3.7%, as opposed to an already tight 4.2% pre-pandemic unemployment rate in August 2019. By county, King was the lowest in August this year with an unemployment rate of 3%.
“We don’t have the talent pool to choose from,” Sturholm said.
She estimated there were several reasons that talent pool is so small. Since the pandemic, many people would like to work from home or have a hybrid schedule, which she acknowledges is hard for hospitality businesses to achieve, since the nature of the industry is in person.
“You can’t work from home if you are a server [or] if you are a waiter,” she said. “You can’t do that from home. You can’t be a front desk person who works from home if you work in a hotel. It doesn’t work.”
Employees want more flexibility, better wages and a stronger work-life balance. The workforce is aging and there has been an increase in the gig economy, among other reasons for the shortage.
Sturholm mentioned the Great Resignation is still happening. In 2021, almost 48 million people quit their jobs. She added that the hiring rate is still higher than the quit rate, meaning that most people are leaving their jobs for different jobs.
“Employees are wanting us to all be trying to achieve a great place to work and what does that look like for each and every employee?” she said. “They are wanting more for their jobs.”
The number one reason folks are leaving their current jobs for other jobs is low wages. The competition between big companies that have the resources to pay more and offer benefits and small mom-and-pop shops that don’t have those resources remains stiff.
“How do you go about paying a competitive wage in this environment and still make a profit?” she asked.
These are just some of the reasons why there is a labor shortage. In another article, Sturholm will try to tackle these challenges with ideas to recruit and retain employees.
You can watch the complete webinar with Suzan Sturholm on our YouTube channel or you can listen to it here or wherever you get your podcasts. All Things HR and Suzan Sturholm are members of the Washington Hospitality advisory network. If you would like a 30-minute consultation with All Things HR, please contact your territory manager.