Article
Insights and tips for the labor shortage in restaurants, hospitality, and retail
June 30, 2022 · Authored by Justine Hunter
The labor shortage issues catalyzed by the onset of the COVID-19 pandemic now persist in spite of any economic recovery, in some cases even increasing from pre-pandemic levels.
For over 50 years, the average unemployment rate in the United States hovered between 5% and 6%, and before the pandemic in February 2020, hit a low of 3.5%. The unemployment rate lowered as of May 2022 from its peak pandemic rate of 14.7%, as organizations across the restaurant, hospitality, and retail industries still struggle to hire.
Though labor shortages persist, businesses have options to help counter the impact.
Why is there a labor shortage in the restaurant, hospitality, and retail industries?
The ongoing labor shortage in these industries is adversely affecting services provided, hours of operation, customer satisfaction, and, ultimately, financial results.
As the pandemic took hold and accelerated, owners and operators worked tirelessly to maintain operations and support employees and their families.
According to a poll by Joblist, 38% of former hospitality workers say they aren’t considering a hospitality job for their next position.
Root causes of the labor shortage
Many employees laid off due to the pandemic never returned, and the availability of new and experienced staffing to serve these industries declined significantly. Some core reasons are explored below.
COVID-19
Restaurants, hotels, theme parks, tourist attractions, and retailers were forced to shut down when the pandemic hit — their employees let go or furloughed in the process.
Leveraging federal support programs such as the Paycheck protection program (PPP), Economic Injury Disaster Loan (EIDL), Restaurant revitalization fund (RRF), and Employee Retention Tax Credits (ERTC, sometimes also referred to as the ERC credit), some companies have been able to sustain their employee staffing and financial viability, eventually restoring employment to pre-COVID-19 levels. Others shuttered permanently.
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