Labor Shortage: What Can You Do?
Hoteliers Need To Look At Outsourcing, Technology To Help Ease Pressure
Hotel owners and operators need to rely on technology, as well as more efficient outsourcing solutions, to help combat the ongoing labor crisis in the lodging industry, according to renowned hospitality author Larry Mogelonsky, who delivered a keynote address last month at BITAC Operations Live 2021.
In a presentation entitled “Labor Shortage: What Can You Do?” Mogelonsky, managing partner, Hotel Mogel Consulting Limited, noted that tens of thousands of hospitality jobs remain unfilled as he put the issue in context.
“This labor shortage is not going away. We created this mess as hoteliers, we spent years not respecting our staff. We spent years trying to cut every corner to meet some budget number that some owner in another part of the world wanted to achieve or for some share price and we took it out on our staff. We have to turn this around, we have to become employee centric,” he said.
Mogelonsky later referenced data from The New York Times revealing significant wage increases for hospitality workers in recent months.
“This is not a good curve if you’re an owner. It’s a terrible curve if you’re looking at trying to run a budget because as you can see wages are going up, way up. So you know our makeup of the labor force is really changing,” he said.
The focus, however, then shifted to potential solutions for hoteliers.
“We have to look at outsourcing, we have to consider it. Not necessarily because it’s cheaper, but because it relieves the pressure that we have on the staff. We also have to embrace technology,” he said.
Mogelonsky provided some more color on outsourcing solutions.
“You can outsource almost everything. Many people are outsourcing reservations; basically you flip a switch on your phone system and your phone is being answered by somebody else. Those people are aware of your business, they understand what you’re about and they’re operating full time. Your front desk isn’t operating full time,” he commented.
Mogelonsky further added there are “massive amounts of opportunities for outsourcing in food & beverage,” while citing other areas such as housekeeping, specialized accounting and recruiting as additional examples of tasks that don’t necessarily need to be handled in house.
Meanwhile, the importance of efficiently leveraging multiple technologies that integrate with the hotel’s PMS was also a point of emphasis.
“You got to build a tech stack. If you’re a GM you have to be an IT manager. If you’re an IT manager you have to help your GM. It’s got to get done right. Just writing a PO is not a business strategy; you have to do a little bit more than that. In fact, you have to ask big questions about integration,” he said.
But that’s not the end of it, according to Mogelonsky.
“You have to monitor your success. You have to look at all this and ask once a year ‘is it working? Is it not working? How much did we pay for it? Did we get value from it?’ he asked.
In terms of any meaningful recovery for the industry, Mogelonsky indicated that group business remains key, and more than likely still a ways off, as he compared the business to a four-cylinder engine.
“We’re not out of this COVID thing yet. One cylinder, leisure, is running well. The next cylinder, corporate, is not quite there. Group business, forget it, that cylinder has been iced and it’s not coming back for a while. The last cylinder, which is social group events, is sort of sputtering. In fact, Smith Travel is saying it could be through to the end of 2024 before we have recovered,” said Mogelonsky.