HR Challenges in the Hospitality Industry

HR Challenges In The Hospitality Industry

We've put together a list of the biggest HR challenges in the hospitality industry to help HRM professionals navigate them during these unprecedented times.

HR challenges in the hospitality industry have always been a balancing act of taking care of employees and customers. However, the global coronavirus pandemic added another layer of complexity to a nuanced industry. Partnering with a trustworthy provider to help with hospitality human resource management is essential for successfully managing these challenges.

In this article, we’ll discuss some of the biggest challenges of HRM in the hospitality industry. We’ll also look at how partnering with a payroll software company can help you manage your recruiting and onboarding processes better.

Biggest Challenges of HRM in the Hospitality Industry

The hospitality sector is one of the few whose success is acutely impacted by customer satisfaction. Hospitality employees are the face of the brand and project the values of the company they represent. If hospitality workers are not happy, they do not offer the level of customer service that keeps people coming back.

If customers are not happy, this threatens the livelihood of hospitality organizations. With so much on the line, HR professionals at hospitality companies face a unique set of challenges they have to tackle daily.

Historically, HR in hospitality has battled problems like low wages, high turnover, and the recruitment of skilled employees. These concerns have been magnified by the pandemic, with mandatory shutdowns sending unemployment rates skyrocketing to 38% earlier this year.

Customer confidence has been shaken with concerns about safety and hygiene, causing many travelers to keep their suitcases in the closet. People who regularly travel for business are staying home and opting for online meetings.

Navigating the current HR issues in the hospitality industry during a pandemic is uncharted territory. The situation hospitality organizations find themselves in has shone an even brighter light on these obstacles and how critical it is to have the right HR processes in place. Let’s take a more in-depth look at some of the biggest hospitality challenges HR leaders face today.

Staff Attrition (Unfilled Vacancies)

One of the biggest HR challenges in the hospitality industry is staff attrition. This term refers to when an employee leaves and their position is not filled. Therefore, hospitality organizations have unfilled vacancies. This employment gap directly impacts the customer experience, leading to longer wait times and a shortage of expected amenities. It can even lead people to take their business elsewhere. The attrition rate in the hospitality industry alone runs as high as 74.9 percent. That’s a far cry from the national average of 12 to 15 percent. So why exactly is staff attrition such a problem in the hospitality industry? Some of the top reasons are:
  • Unclear job expectations
  • Inefficient communication
  • Minimal growth opportunities
  • Disconnect with managers
Most hospitality industry employees are hourly, which makes it even more challenging to find the right people. The hours are long and include nights, weekends, and holidays. The wages are also typically lower for employees working in hospitality. The hospitality industry is also seasonal by nature, which means new hires are brought in during peak times of the year and let go during off-peak periods. These factors all lead to higher attrition in the hospitality industry.

Retaining Qualified Workers

Another issue that human resource management in the hospitality industry struggles with is retaining qualified workers. The most considerable expense for any business is its employees, but this is especially true for hospitality organizations. Labor accounts for 40% of total operating costs for hospitality and tourism organizations. This expense in a very dynamic industry makes it challenging for HR managers to recruit and retain hospitality staff.

A shortage of skilled employees also plays a significant role in this struggle. This problem is two-fold:

  1. There is a dwindling supply of qualified workers in the hospitality industry.
  2. Qualified workers can apply their skills in other industries.

There are a few reasons why there is a shortage of skilled workers in the hospitality sector. First, because these types of positions typically pay low or have tipped wages. As a result, employees tend to leave these jobs at higher rates.

Second, many hospitality employees are students, seasonal staff, or part-time workers. These types of workers are not typically long-term employees. They either use hospitality positions as stepping stones to a better job or temporary work to make extra money. This situation creates a revolving door of employees that don’t stick around long enough to learn the necessary skills to perform their jobs at a satisfactory level.

Finally, hospitality employees must use technology now more than ever. There are software programs to learn and equipment to use. Those who are not as technologically savvy view this as a significant barrier that ultimately drives them to leave.

Another major factor attributing to retention is that many hospitality workers can apply their skills in other industries. For example, someone with management experience doesn’t only know how to manage a hotel. They can manage a retail store or a restaurant using their managerial skillset.

Developing Existing Employees

One of the reasons why hospitality organizations struggle with attrition and retention issues is that there is no process to develop existing employees. When employees do not receive a clear career development path and essential training, this creates a bottleneck of inexperienced workers. This trickle-down effect has a negative impact on a hospitality organization and its patrons. Furthermore, HR managers cannot hire from within, which is more cost-effective than hiring externally.

Implementing programs to properly train employees helps close the skills gap, which continues to be one of the biggest HR challenges in the hospitality industry. Ninety-one percent of employers agree that soft skills development is critical to the future of recruiting. These types of skills include communication, critical thinking, and cultural competency.

While these are skills that can be used in any job setting, taking the time to develop these traits in your existing employees will increase the likelihood they will remain loyal. Over time, hospitality organizations create a talent pool of trained employees with the potential to become trained managers. By investing in employee development, HR managers can give staff a clear career path and promote them internally.

Online training is an effective way to develop hospitality employees, especially right now. It’s beneficial to workers in the following ways:

  • Videos are a more engaging way to train versus reading documents or articles.
  • It can give employers a return on investment in less than a year.
  • People tend to learn five times more training online versus through other media channels.
  • It is 50% more cost-effective for employers.

As you can see, the benefits of developing hospitality employees are a win-win for both organizations and their staff. When hospitality HR managers invest in their employees’ future, they invest in the future of their organization.

Need Help With Hospitality Payroll and HR?

Learn more about APS helps make payroll and HR easier for hospitality organizations.

Maintaining Morale

Maintaining the morale of your employees is always an essential strategy for any business. However, it’s imperative amid the coronavirus pandemic. Employee morale impacts your staff’s productivity and overall wellbeing. During these difficult times, people are experiencing unprecedented layoffs and economic hardship. Boosting employee confidence is exceptionally crucial in any industry, but it’s one of the biggest HR challenges in the hospitality industry, specifically.

The hospitality industry has been one of the hardest hit during the pandemic. Hotels and motels have experienced decreased occupancies. Corporate and milestone events have quickly morphed into virtual gatherings. Recreational venues that typically see large crowds of people have either shut down entirely or are operating at a limited capacity. In a nutshell, things have been tough for an industry that already experiences tight margins and stiff competition.

In the middle of the chaos are the hospitality employees who have struggled to get by. No one could have prepared for the situation in which hospitality organizations find themselves. However, workers need to know that they are not alone and forgotten. All employees want to feel valued and appreciated. Those feelings are what drives a person’s desire to work harder and give 110 percent every day.

Everyone is still feeling the effects of this pandemic. The financial losses have been astronomical. Here are some ways you can boost morale, especially right now:


Be Transparent

Your employees want to know they can trust you. By being transparent and demonstrating you have nothing to hide, you will build and develop that trust with your staff. For example, if you have to lay off or furlough any workers, be open and honest about why. Communicate to them that it’s not personal and that you plan to bring them back when you can.

Be Clear With Expectations

If your employees don’t know their job role expectations, they will not be successful. Establishing clear and reasonable goals from the beginning will help them excel in their work and enables you to determine how they can grow in the future.


Be Kind

It seems relatively simple, yet it’s easy to overlook kindness in the hustle and bustle of hospitality. Working in the hospitality industry requires patience and grace. This approach applies to both customers and employees. Taking just a few moments to show some kindness to your staff goes a long way in boosting and maintaining morale.

Shifting to Remote Work


Equip Your Employees

It’s crucial for those who have never worked remotely to set up a dedicated office space at home. Make sure your employees have the proper equipment and programs needed to perform their jobs. This period may even be an opportunity to see if there are any new technology tools or equipment that will support your hospitality organization during tough times and help you grow.

Virtual Meeting

Comunicate Often

When you’re not face-to-face with hospitality staff, communicate, communicate, and communicate some more. This approach is essential to ensure you stay in touch with what and how your employees are doing. Instant communication tools like Slack and Google Meet are a great way to communicate with remote hospitality workers effectively without bombarding their inboxes. They even offer video options so you can still get some quality facetime.

Thumbs Up

Be Understanding

Remote working in the hospitality industry has a substantial learning curve for both employers and employees. Give your remote employees a chance to adjust and adapt to their new way of working.

It may even be beneficial to schedule quick check-in calls each day or week to make sure no one is struggling. If someone is not adjusting well, work together on a plan to help things run more smoothly.

Working from home is not a situation about which hospitality companies have ever needed to worry. Hospitality organizations are successful because of the in-person interactions they have with customers and patrons. Remote working does not encourage people to travel or commute for business.

Some larger hotel chains have also adopted “work-at-a-hotel” packages to encourage people to use their rooms as offices. Guests receive access to one room during business hours and other hotel amenities. Some hotels are even looking to create monthly and annual packages for guests who want to use a dedicated space away from home regularly.

How APS Can Help You Overcome HR Issues in the Hospitality Industry

Now that we have discussed some of the challenges faced by HR in the hospitality industry let’s talk about how to solve them with HR technology. The importance of HRM in the hospitality industry has never been more apparent. However, HR professionals can’t do it alone. They need the right technology stack in place to help them confront HR challenges in the hospitality industry head-on and solve them. APS provides an all-in-one technology platform that makes payroll and HR easier for hospitality organizations. Here are some ways APS can help you overcome HR issues in the hospitality industry:

Recruiting and Onboarding

One of the critical roles of HR in the hospitality industry is recruiting and onboarding. Using recruiting and onboarding software like APS Hire helps hospitality organizations recruit candidates, track applicants, and hire qualified workers in a centralized location.

You’ll save valuable time with a recruiting strategy that allows you to hone in on the best candidates and fast-track those applicants based on your hospitality organization’s needs, and hire skilled employees for the right positions:

  • Create a better applicant experience with customized job postings, automated job promotion, and mobile-optimized applications.
  • Filter applicants with assessments and prescreen questions to narrow down candidates faster.
  • Utilize scorecards and in-depth interview guides to improve hiring accuracy and consistency.

You can then build an onboarding process that gets your new hires on the right path from day one:

  • Create manager and employee checklists for required forms to streamline onboarding.
  • Have new hires e-sign employee documents, which are then synced to their employee record automatically.
  • Create electronic versions of all your paper forms and store them securely to ensure compliance.

By utilizing HR technology to manage your recruiting and onboarding processes, you will build a solid strategy for how to deal with attrition in the hospitality industry. You’ll decrease your attrition rate and start filling more of those vacant positions.

Training and Retention

HR managers in the hospitality sector have a lot on their plates. When your to-do list is neverending, initiatives like training and retention slip through the cracks. It’s not intentional, but this may lead to you getting blamed for poor HR management. However, the real culprit is the lack of HR technology to help you manage and automate your tasks.

An HR platform like APS can help you automate processes like employee development and retention to grow your pool of skilled workers. You’ll create a more dynamic and well-rounded employee lifecycle to manage workflows like:

It’s vital to use a payroll and HR platform like APS to automate the employee journey while maintaining compliance.

Communication Tools

One of the major themes we have discussed is the importance of communication with hospitality workers. Transparency and visibility go a long way when it comes to creating a positive company culture. HR technology provides several ways to communicate with your hospitality staff, so they are always in the loop:

  • Use an internal company newsfeed to communicate anything from upcoming holidays and changes in policies to new employees or virtual event announcements. HR managers can add their messages in APS, and employees can view them when logged into employee or manager self service.
  • Text messages are a great way to communicate with your on-site and remote-working employees since people tend to check their texts more than emails. APS provides text messaging that makes it easy for hospitality HR managers to create and schedule notifications in our platform.
  • Emails are still a tried and true way to communicate with your employees, especially about important topics like open enrollment. With APS, you can create your email messages and send them out to all employees at once for streamlined notifications.

Using these tools in conjunction with employee and manager self service will ensure communication lines are always open with your staff, no matter where they work. APS provides self service both via desktop and mobile app for added convenience to your employees and managers. These tools are a great way to not only maintain employee morale but also support remote workers better.

HR Analytics

Hospitality organizations have to manage razor-thin margins and operational costs, even during a pandemic. Hospitality HR software provides hotels, casinos, and other organizations with powerful dashboard analytics at a glance. APS’ reporting dashboards offer various analytical tiles to view labor costs, turnover trends, and payroll expenses across departments, locations, and entities.

It’s vital to have quick access to these types of metrics for informed decision-making, especially during a pandemic. APS even provides exports and integrations with accounting packages like Sage Intacct to better align payroll, HR, and finance.

With all the unique HR challenges in the hospitality industry, there’s never been a better time to invest in HR software. Having the right technology to help streamline and automate your HR processes makes it easier to focus on more strategic initiatives. When you’re able to approach obstacles with laser focus, those significant challenges become a lot more manageable.

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