According to recently released jobs numbers from the Department of Employment and Economic Development (DEED), the hospitality and leisure industry remains down more than 32,000 workers compared to pre-pandemic levels. This represents 33% of the total jobs-deficit for all private employers (97,000) from February 2020 levels. There are troubling indicators that thousands of employees left the industry during the shutdown in March-June 2020 and again in November 2020 – January 2021.
Only 42% of Foodservice & Accommodations Workers Returned After the Shutdown in 2021
A new DEED report issued this month indicates that only 42% of foodservice and accommodations workers returned to their hospitality employer after the shutdowns in November 2020-January 2021.
Only 42% of Foodservice & Accommodations Workers Returned After the Shutdown in 2021
A new DEED report issued this month indicates that only 42% of foodservice and accommodations workers returned to their hospitality employer after the shutdowns in November 2020-January 2021.
With the drop in hospitality and leisure employment of 59,567 from October 2020 – December 2020, an estimated 34,548 workers did not return to their hospitality employer when the shutdowns ended:
Only 55% of Foodservice & Accommodations Workers Came Back Post 2020 Shutdown
According to a similar report from DEED last year, only 55% of foodservice and accommodations workers returned to their hospitality employer after the shutdowns in March 2020-June 2020.
- 19,061 left for another employer or industry
- 15,487 remained unemployed
Only 55% of Foodservice & Accommodations Workers Came Back Post 2020 Shutdown
According to a similar report from DEED last year, only 55% of foodservice and accommodations workers returned to their hospitality employer after the shutdowns in March 2020-June 2020.
With the significant drop in hospitality and leisure employment of 139,514 from February 2020 – June 2020, an estimated 62,781 workers did not return to their hospitality employer when the shutdowns ended:
Based on this data, we project that up to 97,000 Minnesota workers left their hospitality employer (and potentially the industry) and did not return when the shutdowns were over.
Exacerbating this challenge is the fact that the labor participation rate remains at the lowest non-pandemic level since June of 1978 at 67.9%.
- 25,112 left for another employer/industry
- 37,668 remained unemployed
Based on this data, we project that up to 97,000 Minnesota workers left their hospitality employer (and potentially the industry) and did not return when the shutdowns were over.
Exacerbating this challenge is the fact that the labor participation rate remains at the lowest non-pandemic level since June of 1978 at 67.9%.
Actionable Insights to Rebuild the Hospitality Workforce
Short-Term Prospects on Labor Pool Not surprisingly, 88% of hospitality operators indicate that labor availability is tight in the most recent survey conducted by Hospitality Minnesota, the Federal Reserve Bank of Minneapolis and Explore Minnesota Tourism. While there is some speculation and hope that some of the near 100,000 workers that are still “on the bench” will return to the workforce this spring/summer, the return rate and impact on our industry is yet to be determined. Some may not return at all, as the early-retirement rate spiked over the last two years (see Kansas City Federal Reserve analysis here). Barriers to re-entry continue for workers caring for children or other family members, or those dealing with health or disability issues in the current environment (see Richmond Federal Reserve analysis here).
Attracting Workers in 2022 When disruption strikes, adaptation is the name of the game. While wages have rapidly increased in our industry in the last year, most operators acknowledge that wage hikes alone are not going to attract and retain workers. Among other things, labor experts indicate that workers in the current market place a high value on:
The Big Question Mark – Meeting Consumer Demand
Looking ahead to the busy summer leisure travel season, hospitality and tourism businesses across Minnesota have expressed major concerns about their ability to meet customer demand. Many in Greater Minnesota rely on the H2B and J-1 Visa programs to augment their seasonal employee needs, but these two programs have been limited due to the pandemic and are oversubscribed for their capped limits. At a recent program in Duluth for Hospitality Minnesota’s members in Northeastern Minnesota, attendees indicated they are still looking to hire hundreds of workers for the summer season. Integrating more technology, including robotics, is one of the shorter-term solutions businesses are implementing to help address the acute labor shortage. While changes in business processes and practices continue to evolve, positioning hospitality as a great career opportunity and rebuilding the breadth and depth of skilled workers is a longer-term goal for Hospitality Minnesota.
Hospitality Minnesota Initiatives
Hospitality Minnesota is engaged in a number of initiatives to rebuild the workforce pipeline in Minnesota and provide members with tools to succeed in a hyper-competitive labor market, including:
Short-Term Prospects on Labor Pool Not surprisingly, 88% of hospitality operators indicate that labor availability is tight in the most recent survey conducted by Hospitality Minnesota, the Federal Reserve Bank of Minneapolis and Explore Minnesota Tourism. While there is some speculation and hope that some of the near 100,000 workers that are still “on the bench” will return to the workforce this spring/summer, the return rate and impact on our industry is yet to be determined. Some may not return at all, as the early-retirement rate spiked over the last two years (see Kansas City Federal Reserve analysis here). Barriers to re-entry continue for workers caring for children or other family members, or those dealing with health or disability issues in the current environment (see Richmond Federal Reserve analysis here).
Attracting Workers in 2022 When disruption strikes, adaptation is the name of the game. While wages have rapidly increased in our industry in the last year, most operators acknowledge that wage hikes alone are not going to attract and retain workers. Among other things, labor experts indicate that workers in the current market place a high value on:
- Work-life balance
- Flexibility
- Safety
- Frequent, relevant communication (use of apps and other tools for team comms)
- Purpose, meaning, and mission-driven work
- Mentors and coaches
- Appreciation from managers
- Strengths-based recognition
- Career pathways (how does your company showcase upward mobility?)
The Big Question Mark – Meeting Consumer Demand
Looking ahead to the busy summer leisure travel season, hospitality and tourism businesses across Minnesota have expressed major concerns about their ability to meet customer demand. Many in Greater Minnesota rely on the H2B and J-1 Visa programs to augment their seasonal employee needs, but these two programs have been limited due to the pandemic and are oversubscribed for their capped limits. At a recent program in Duluth for Hospitality Minnesota’s members in Northeastern Minnesota, attendees indicated they are still looking to hire hundreds of workers for the summer season. Integrating more technology, including robotics, is one of the shorter-term solutions businesses are implementing to help address the acute labor shortage. While changes in business processes and practices continue to evolve, positioning hospitality as a great career opportunity and rebuilding the breadth and depth of skilled workers is a longer-term goal for Hospitality Minnesota.
Hospitality Minnesota Initiatives
Hospitality Minnesota is engaged in a number of initiatives to rebuild the workforce pipeline in Minnesota and provide members with tools to succeed in a hyper-competitive labor market, including:
- Regional Meet-ups Convening regional meet-ups with hospitality operators and workforce experts to share intel on what’s working and about creative solutions to labor shortage;
- State Legislation Advancing a bill at the Minnesota legislature to create a free online hospitality training program modeled after South Dakota to train and incentivize workers;
- Federal Policy and Immigration Supporting capacity increases and usage for the H-2B and J-1 Visa worker programs, as well as new Essential Workers for Economic Advancement program that proposes to bring 85,000 additional workers to the U.S. for three-year terms in targeted industries;
- ProStart & HTMP Growing the ProStart and Hospitality Tourism Management Programs in Minnesota high schools so we can rebuild the hospitality workforce pipeline and help shape the industry’s future leaders. In the last 4 years, we have seen significant growth in these critical programs.
You Can Help in Small but Important Ways
Your engagement is so important in helping us make an impact for your business and our industry - every little bit matters!
For more information:
Ben Wogsland
Executive Vice President
ben@hospitalitymn.com
D: (651) 925-4022
- Be the change you want to see. Hospitality Minnesota members can help advance our workforce initiatives by:
- Becoming a regional leader to organize a meet-up; contact ann@hospitalitymn.com
- Joining the Hospitality Minnesota Advocacy Group; contact ben@hospitaliymn.com
- Facilitating the expansion of the ProStart and HTMP programs in high schools by financially supporting the Hospitality Minnesota Education Foundation, becoming a mentor to a high school team and/or advocating for expansion in your local school(s)/district(s); contact cyndi@hospitalitymn.com
Your engagement is so important in helping us make an impact for your business and our industry - every little bit matters!
For more information:
Ben Wogsland
Executive Vice President
ben@hospitalitymn.com
D: (651) 925-4022
