Updated: Apr 16, 2022
COLLECTIVE THOUGHTS ON HOW THE HOTEL INDUSTRY IS
MISSING THE POINT ON COMPENSATIONS.
When I wrote the introduction on the "About me" page of my website, you may have noticed a brief comment I made on what is perhaps one of the most delicate topics for us hoteliers.
The comment was "don't expect to get rich, it (the hotel industry) doesn't pay good money".
I remember debating if I should have included that or kept it out, just because I didn't want to get something so sensitive out there right away, but I eventually did because it is an important reality we deal with in our business.
My good friend and former HR Director helped me word that sentence in a way that would be as politically correct as possible, but let's be honest - whichever way you word it and as conscious as you want to be - it's an issue we constantly face for ourselves and for our teams, and it feels like it continues to go unheard.
Obviously I'm not the first or the last one to talk about it, and I am not hoping to change something here, this is just so much bigger than all of us.
But I do want to keep raising the concern because it's a common feeling within the network, and I honestly have a hard time understanding why an issue that is so highly discussed and widespread, seems to go unnoticed. Is it unnoticed or ignored? And is it really discussed or are a lot of us maybe afraid to talk about it?
I decided to give it some thoughts, do some research, involve my colleagues, and see if together we can make some sense of this.
I didn't want to waste time going through facts; point 1. it's too complicated to put down numbers when they differ so much depending on locations, economies, resources, and ratings; and 2. we don't need numbers to validate the concern.
We all know that - no matter where, when, why - hotel employees are underpaid. The hotel industry was before the pandemic - and continues to be - on average one of the lowest paid industries, both for entry level employees and salaried managers. This is certainly not true across the board - I've worked for or witnessed organizations who believe in competitive compensation structures - however the majority of companies and owners continue to pay below average, causing low employee satisfaction, high turnover, and poor reputation.
Today I want to focus on the way this makes us feel as workers, as leaders for our people, as individuals trying to build a life in a world where we work so hard and we are not compensated appropriately.
I have then sought the opinion of some professionals in my network; I asked them not for a solution, but to break down concerns and share considerations. The collective thoughts that have emerged were particularly interesting for me to share as they come from individuals who work in different locations and cultures, who have worked for various companies and owners, who are now at higher levels, but also who have experienced other branches of hospitality and have seen for themselves what it's like outside of the hotel business.
Below are some findings and feelings, some unfortunate common perceptions, some inevitable facts.
We are easily replaceable..
We are certainly experts in what we do, but in fact many operational roles in any given hotel and in most departments, can be replaced when a new person comes in and has been through basic training. Leaving out executive roles - other than few skilled positions such as engineers or chefs, the truth is our jobs are easily and quickly teachable to people who have never worked in the industry before, and can be learnt in just a couple of months. I am the first one to advocate hiring the right personality versus the knowledge when it comes to hospitality candidates. Why? Because what we really need is a natural host, not a high skilled professional.
Furthermore cross utilization is one of the pillars of our business, and that has certainly made us flexible and versatile, but it has also created a mentality where if there is a gap in one department, it can easily be filled by anyone else in the hotel - not necessarily by someone who is trained for the job. Ever heard of an engineer stripping rooms when housekeeping is short staffed? Ever seen a front office manager inspecting rooms? Ever seen a food & beverage manager covering the front desk?
Interesting that union properties are the only type of environment where this cannot be the case with line employees.
We are not high skilled workers...
Hand in hand with that, as just mentioned, we work in an environment where many positions are not considered high skilled. There is a big range of manual labor in the business that does not require special knowledge, education or qualification, or any advanced training. I read this article where someone called out a "minimum standard entry criteria for the industry".
It's true. I have a master degree in tourism & leisure, but most of what I know I learnt on the job throughout the years, and if I didn't have that degree I definitely wouldn't be behind where I currently am.
This minimum standard entry criteria contributes to keeping the wages down.
A considerable younger age group works in the business.
I surely have experienced this trend myself and seen companies counting quite a lot on students or junior work force to cover mainly two types of positions.
Young interns are hired to fill seasonal or temporary roles for minimum wage (or sometimes unfortunately not even that); for them it is a valuable work experience, but for the hotel it's an opportunity to cover gaps at lower rates.
Graduate students work a management program during their last year of school, they go through an intensive learning plan that will teach them the basics of the job in 6 months or so, and get offered an assistant manager role right out of school. While I find this a great opportunity for the students on one hand, I have always considered it a not so good idea. Six months of training will maybe give them some knowledge to do the job, but certainly won't give them the necessary experience to be successful. Unfortunately, a management role to an apprentice who just graduated allows the company to get away with entry level salaries, bringing the average down once again.
It's quite easy to get in the industry for a young crowd who is still learning what they want to do with their future, so many entry roles are filled by junior individuals, who are not comfortable yet negotiating their worth and who are accepting of mediocre offers.
The industry has a cosmopolitan nature.
One of our favorite perks of working in the hotel business is the ability we have like in no other industry to move around and work in different locations - for few lucky ones - in different countries or continents. With so many internal transfers and hoteliers attempting to move around to enrich their experience (or sometimes for a better life opportunity), hotel companies import workers from developing and underdeveloped countries, and they are able to do so at significantly lower wages. The best example I can think of is visa workers. I have seen companies counting on workers from specific locations - coming on student or seasonal worker visa - to cover the staffing needs of almost an entire department. I very much appreciate the fact that we bring in people who are really in need of that job, that money, that experience, and we give them the change to offer a better life to their families who stay behind. I do however worry that the main reason for doing so is to save on wages, as companies know they can afford to pay them less. Don't get me wrong - I am myself an immigrant who once moved on a visa, and I am all about sponsoring foreign workers. Sometimes however, I'm concerned about it being just a way of saving payroll, and I'm confused about the choice of spending that money on immigration lawyers and government petitions, when we could invest the additional resources on higher wages for locals.
People might not know their value...
It definitely isn't the case only in the hotel industry, but it's hard not to think this way: in a business where the expectation is to be on 24/7 for lower salaries, where managers do not get paid for the overtime they constantly put in, where we can see how much revenue comes in and what a small percentage of that goes into our payroll, how do we not wonder if perhaps people do not know their value?
Are we ok being "used"? Is it because junior workers in the business are still learning about their worth, while the ones who have more experience start realizing they can do better for themselves in another industry?
Now that we are coming back much stronger than expected, the demand is not lacking, rates steadily increase, so why are wages staying more or less the same? Why do merit increases only go up to 3% for most companies and most positions?
Management positions suffer the most from this type of structure.
For line staff, a minimum wage we have seen lately (at least in the U.S.) is a positive step towards improving their situation – however, similar steps are not taken with entry level and mid management employees who are often overworked and underpaid. The paradox of our industry shows a hours worked/wages ratio lower for a manager than for an entry level employee.
Most are expected to work 10+ hours, and with lower income they are unable to take a second job like their counterparts who are hourly based and/or eligible for tips. While companies focus on year over year profitability, there is no correlation between that and year over year pay increase for all levels of management.
Hotel companies lose great management talent because of the high stress level which is not compensated, and because of the lack of earning potential available in these roles. Managers are more and more aware of this as we can clearly see from the industry turnover rates. Managers are also more and more aware that the potential is much higher in other industries.
Lately many companies have tried to increase the wages of junior and mid-level managers to help build a base for the individuals, however the overall expectations have not changed, creating a scenario where a 10% increase is less appealing than a set schedule or a better work and life balance.
With the mass exodus in the resignation era – severely impacting the industry - a management experience as a whole should be a topic of conversation. There is no choice at this point. Employers are finally forced to compete in this space and pay heavy sign-in bonuses and higher wages – but to no avail. There are still plenty of vacancies when it comes to management jobs, as we focus on band-aid solutions to a much bigger problem.
There is a considerable gap between lower/middle management and executive salaries.
As I moved up and climbed the ladder of the business - and as I got access to more information - I couldn't help but notice a couple of things.
My compensation plan was improving, but the increase between one promotion and the other, and between merit bumps, was just not significant. I felt like from one job to the other the responsibilities were intensifying and the expectations were growing exponentially, but the salary was going up just by meaningless amounts. At some point earlier in my career I moved from an assistant manager to a department head position, and my yearly salary was simply rounded up $ 500.00. True story.
There seems to be - however - a pretty important jump when you move from an entry or middle management role to an executive leadership one. When I got into my first executive position, not only my salary and my bonus plan finally looked like a real advancement. Having access to information such as overall payroll, I could see salaries for all position (including the ones of my superiors), and noticed how certain leadership roles were very well compensated. Well compensated to the point that it made me question how payroll is not distributed more equally across the board. It's no secret that roles such as top celebrity chefs and sommeliers are extremely well paid, and yes those are high skilled positions, but again the substantial gap to me seems unjustified. Director of Sales, Directors of Finance, and General Managers belong to this category too, rightfully so - but we do wonder about what seems an extremely unequal distribution of payroll.
The roles eligible for tips are not as many as people think...
If you take on a role that's eligible for tips or extra earnings, you know you are most likely going to accept a lower offer. As a concierge, bellman, or restaurant server, you sign up for a job that will earn you commissions, incentives and gratuity, so the lower wage is somewhat justified.
The argument here is, there is a common perception that all hotel employees are eligible for tips, but unfortunately there are a lot of positions which are not, or which are considered eligible but are not likely to receive it, such as a lot of back of the house roles. Amongst those who are not qualified to receive tips but can pick up other earnings, not many have the opportunity to make significantly more. And finally, it does make a difference in what environment you work: in a select service property guests are less likely to give tips (or if they do they leave smaller amounts); if you are a concierge for a clientele that has a lower budget you will not receive any restaurant commission and so on.
So if these rewards are not applicable all around - or if in some cases they don't make much of a difference - why is the overall pay still on the lower range?
We are loosing essential employees due to low wages.
It's common knowledge at this point - even outside of our industry - that hotels are still going through one of the deepest crisis in terms of staffing levels and turnover. The pandemic has changed our perspective on compensations, work, and life in general, and many of us have decided during these times to resign from our positions. It certainly doesn't help in the current conditions to keep wages down as we need employees so desperately, and by doing so we are incentivizing them to look for work elsewhere. We cannot afford to continue loosing manpower all around, but what's most concerning for us is loosing - or not being able to fill - essential jobs that make it safe and comfortable for employees to come to work and for guests to come stay. An easy example? What about our loss prevention and security officers who patrol the property day and night for us? What about our housekeepers that keep the front and back of the house clean and safe for us? How can we operate successfully and safely without those people? Is it time to recognize they are indeed essential workers and their value can no longer be undercompensated?
People are not comfortable talking about money.
Last but not least, a complex conclusion.
A recent conversation I had with a couple of colleagues made me think of something I had never thought of before.
It seems that many people don't like talking about their salary with their peers; many people in general don't really like talking about money.
I never thought about this because in the environment where I grew up and gained work experience, talking about money was not an issue whatsoever, and throughout my career I have always been comfortable doing so.
Once talking to a co-worker from Australia and another one from France, we realized how the 3 of us were relaxed about sharing our salaries - and the concerns about our salaries - but how other colleagues from different cultures were not at all willing to discuss. Chatting with an American teammate, he mentioned how growing up his parents did not want money to be a subject for discussion, and suggested he kept that kind of topic for himself in life or at work.
I have now heard this a few times from a few different people, so I can't help but wonder: if we are not relaxed about the subject or free to discuss it, then certainly this can't help the issue. The first step in resolving a concern is to share it and review it together, educate whoever can actually do something about it. We can't be afraid of or stressed about our feelings. If we as employees and managers are uncomfortable sharing with each other and with those above us, how can we hope for a change? And how can we even be entitled to complain??
I would like to leave you with this consideration, and invite you to think about how perhaps we are missing the very first necessary step.
Yes, we don't have much power in finding a solution, but we do have the power of talking about it and sharing our feelings. Let's start with that, and go from there.
Thank you to all the colleagues everywhere who contributed
to this article and who gave me great food for thoughts.