If you're in this industry, it's a good time to negotiate a raise

The scramble for workers is particularly acute in the U.S. hospitality industry. As vaccinations ramp up and the economy emerges from pandemic shutdowns, people are traveling and going out to eat. Even though June saw notable employment gains in leisure and hospitality (a gain of 343,000), employment in those sectors is down by 2.2 million, or 12.9%, from its level in February 2020, according to federal data.

Some restaurant owners have reportedly had to cut hours of operation because they’re understaffed. And it seems like the struggle to fill jobs will continue. Hospitality work is unpopular right now and raising pay won’t make the industry more attractive to job seekers amid the pandemic, according to a new report by Joblist.

Sixty percent of job seekers are not interested in hospitality positions at all, Joblist found, with 58% of them citing a preference for a different work setting such as an office as their top reason. In fact, 38% of former hospitality workers surveyed said they're not considering a hospitality job for their next position – "a major shift," Joblist said. (Over 30,000 U.S. job seekers were surveyed over the past three months.)

“While there are people out there who will take jobs, there’s not a sense of urgency for many job seekers because of Covid and the fact that lots of people have financial cushions built up during the pandemic,” said Nick Bunker, economic research director for North America at the Indeed Hiring Lab. “So while employers might want to staff up urgently right now, lots of job seekers don’t feel that sense.” Some have argued that enhanced benefits have discouraged workers from seeking employment; some states have ended those benefits earlier than the Sept. 6 federal deadline.

According to Joblist, more than 50% of former hospitality workers say that no pay increase or incentive would compel them to return to their old jobs – even though they’re looking for work. Bunker said hotels, bars, and restaurants needing to hire may be limited to the current pool of employed hospitality workers.

“That’s a group that is working right now and seems more likely to be lured by higher wages,” he said, adding that for workers, “right now is a really opportune time” to negotiate a raise given that demand is strong.

Celebrity chef and restaurateur David Burke is all too familiar with the poaching currently going on in the industry. He recently told Yahoo Finance his payroll increased by 25% to 30% “because the waiters and cooks are commanding a higher price.” Fast food restaurants have also been raising wages and adding bonuses as incentives to attract and retain workers.

The average wage of leisure and hospitality workers has risen more than 10% in the past six months, and wages overall are above their pre-pandemic trajectory, according to ZipRecruiter.

“Hopefully, with the level of vaccination we have now and continuing progress there, case counts will go down,” said Bunker. “More people will feel comfortable going to restaurants, especially in-person dining and more people will feel comfortable going to in-person jobs like those in the sector.”

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