Research: The Skills Gap Behind The Labor Shortage In Hospitality

The hospitality industry has been grappling with a persistent labor shortage in recent years.

In the US, in 2023 the hospitality industry had 1.37 million job vacancies on average, 38% higher than pre-COVID. In the UK, job vacancies are still 30% higher compared to pre-pandemic levels. In Canada, last year the industry was short of up to 360,000 workers.

According to our research, this shortage is not merely a result of insufficient workforce numbers but is primarily rooted in a skills gap.

Skills Gap vs. Worker Shortage

At first glance, the hospitality industry’s labor shortage might be misconstrued as a lack of available workers. However, a deeper look reveals that the issue is a skills gap.

Employers are increasingly finding it challenging to source candidates with the specific set of skills crucial for success in the industry. Almost 1 out of 2 hiring managers (44%) indicate “Lack of qualified applicants” as the primary reason behind understaffing, while the more generic “Lack of applicants” stops at 27% of the respondents.

Lacking interpersonal skills is a more likely reason for rejecting a candidate (55%) compared to lacking technical skills (37%).

why hospitality industry businesses are understaffed
why hospitality hiring managers reject candidates

Training Costs and Turnover

In the dynamic landscape of the hospitality sector, soft skills have emerged as the true currency. While hard skills can be taught in a relatively shorter period, it is the mastery of people-centric and behavioral competencies that significantly contributes to an employee’s success in this service-oriented industry.

The reluctance to hire candidates lacking people and behavioral skills stems from the high training costs associated with these competencies. Soft skills often require a longer gestation period to develop, and in an industry characterized by high turnover rates, investing in employees who may not stay for extended periods becomes a significant concern for employers.

According to our survey respondents, a hospitality worker needs on average less than 2 months of training to gain basic technical knowledge and 7.1 months to sufficiently master it. However, when it comes to interpersonal skills, the average worker needs 3.2 months of training to acquire basic-level skills, and over 9 months to sufficiently master them.

how many months do hospitality managers need to train employees on technical and interpersonal skills needed for their roles

Perception of Skilled Workers

Employers in the hospitality industry are increasingly inclined to believe that skilled workers not only bring proficiency in tasks but also exhibit maturity (87%) and commitment (61%). This perception is grounded in the notion that individuals with refined people skills are more likely to stick with their positions for a longer duration, minimizing turnover-related costs.

hiring managers in hospitality perceive workers with soft skills as more professional, mature, and committed, while they are less likely to leave their job

Premium for Skills

To attract and retain talent possessing the coveted people and behavioral skills, more than 4 out of 5 hospitality employers are willing to pay a premium, with the average premium exceeding 20%. 

Employers justify such premiums as trained employees require a shorter time to ramp-up their performance, display a higher (perceived) retention rate, and have a greater impact on the quality of the service.

hiring managers in the hospitality industry are willing to pay a premium for workers with good interpersonal skills

While the respondents named quite a long list of soft skills they look for in candidates, patterns emerge quite clearly and some sought-after soft skills are mentioned by most hiring managers.

most demanded soft skills in hospitality

Conclusion

The labor shortage in the hospitality industry is a multifaceted challenge, with the skills gap being the predominant factor. Shifting the focus from sheer numbers to the cultivation of people and behavioral skills is imperative for both employers and prospective employees

Methodology

  • Data collection: surveys, interviews.
  • Respondents: 1,292.
  • Role of the respondents: hospitality owner, hospitality site manager, hospitality hiring manager.
  • Geography: US, Canada, UK.
  • Period: Q4 2023.

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