Indiana is known for providing a warm welcome to guests, but the state’s hospitality industry is grappling with the question of who is going to provide that welcome as staffing issues continue to plague the sector. Employment in Indiana has rebounded to pre-pandemic levels, with an unemployment rate of 2.8%, but jobs in the hospitality industry continue to go unfilled. What can the industry expect for 2023?

More women, more immigrants, more automation

Labor force participation has been falling in Indiana since 1995, with a brief period of increase from 2012 to 2019. Both men and women have been leaving the workforce in that time, but the drop among men has been much steeper, echoing the national trend. While women had a more dramatic drop in workforce participation during the pandemic, they reentered the labor force at a faster rate than men.

These trends suggest that women will be seeking jobs in the future at a proportionally higher rate than men. The flexible hours and part-time nature of many hospitality jobs also tend to attract women, who often provide most of the child care in families and need the ability to change their schedules accordingly.

Foreign-born workers have long been an important part of the American labor force. In Indiana, they make up 8% of the workforce in accommodations and foodservice. The immigration restrictions of the pandemic resulted in a significant drop in the number of foreign-born workers.

While immigration has returned to near pre-pandemic levels, Goldman Sachs Research indicates that the U.S. has yet to recover from the drop in foreign-born workers. Streamlining or eliminating visa interviews and activating unused visas from pandemic years could speed up the immigration process and provide more foreign-born workers to ease staffing shortages.

Persistent staffing shortages have increased industry adoption of automation technologies, from online apps and ordering kiosks to robotic burger flippers. According to Lightspeed’s Global State of the Hospitality Industry Report 2021, 50% of restaurateurs expect to take on new technologies to support their staffs.

More focus on employee satisfaction and wellness

With hiring likely to remain challenging in 2023, employers will need to prioritize keeping the staff they have, which means focusing on employee satisfaction. No industry has a higher turnover rate than hospitality, and workers know that they can quickly find a job at another restaurant or hotel if they don’t like the working conditions where they are. Increasingly, individuals want to work for companies whose culture reflects their own. Strong corporate citizenship, meaningful DEI programs and a commitment to work-life balance are worth more to many employees than a higher paycheck.

While health and wellness initiatives are not new, mental health support programs in the workplace are becoming increasingly important. According to the National Alliance on Mental Illness (NAMI), depression results in more days of disability than chronic health conditions such as heart disease, hypertension, and diabetes. Substance use disorder is a mental illness that hits the hospitality industry particularly hard.

Hospitality ranks at or near the top of all industries for illicit drug use and/or heavy alcohol use among employees. To help their employees get the mental health assistance they need, Indiana employers can participate in the Indiana Chamber of Commerce’s Wellness Council of Indiana programs including Mental Health First Aid training and the Indiana Workforce Recovery initiative.

More reliance on staffing agency partners

For the foreseeable future, the hospitality industry is going to have staffing challenges. According to the Indiana Chamber of Commerce 2022 Employer Survey companies are addressing the staffing challenge by leaving open jobs open (51%) and reassigning responsibilities (39%). In hospitality these options impact customer service. Instead, either underqualified candidates are hired (30%) or temp workers are called in to fill the job (23%).

Staffing agencies allow employers to keep the doors and drive-throughs open while avoiding employee burnout. While historically thought of as sources of front-line employees, staffing agencies can also help fill management and executive roles. Developing a relationship with a reliable staffing agency partner can help employers avoid headaches, increase revenues and continue to build their brands.

Workforce challenges will continue in 2023. It’s up to business owners and leaders to understand the landscape outlined above to fil the gap to ensure Hoosier hospitality continues.

George Lessmeister is CEO and founder of LGC Hospitality, a national staffing firm headquartered in Indianapolis. LGC has offices in over 40 U.S. cities. Team members work with hotel and restaurant leadership to place executives and temporary workers.

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