Employees are changing jobs due to their employer’s COVID response

The travel industry, in particular, will face considerable headwinds as hiring ramps up for summer demand.

When COVID-19 hit, the travel industry came to a halt. Massive job losses followed, with airlines canceling flights, hotels going dormant, and restaurants pivoting overnight to takeout and food delivery (a challenging transition). At the time, many were quick to call this the end of the sector’s labor shortage issues. However, what has become apparent is that it was just a pause, and — now that we’re on the cusp of getting the pandemic under control — the labor shortage is surging once again.

Unfortunately, re-staffing a labor market on short notice is never easy. Switching recruiting, hiring, and the training of staff back to the “on” position takes time. Given the choice between shutting down completely and keeping businesses minimally afloat (to live to fight another day), many businesses had to let go of nearly 90 percent of their workforce during the pandemic. For many hospitality workers, this was both devastating and shocking. Overnight, their livelihoods went up in smoke and they had to make hard choices about taking reduced pay in the hospitality industry or seeking job opportunities elsewhere.

As a result, much of the industry is now digging out of a hole. Many businesses are facing the task of reinventing themselves by integrating what worked for them in the “before times” with the lessons learned during the COVID-19 crisis. A life-changing, societal disruption like a pandemic is likely to have lasting impacts; our industry’s labor market is unlikely ever to be the same.

Oregon State University’s Hospitality Management program has been conducting research into the sector’s labor shortage for the last seven years, annually conducting quantitative and qualitative research. Realizing the potential impact of COVID-19 on our industry, we wanted to see if the actions employers took during the crisis would — from the perspective of the workforce — impact the overall attractiveness of our industry.

To measure interest in the hospitality industry as a career choice, we’ve surveyed workers through the years about how likely they are to continue working in it over the next two, two to five, and five-plus years.

We got our first look at COVID’s impact on the labor force last month and … it was disappointing. Over the last five years, we’ve seen a significant drop in interest in the industry as a career destination. In fact, in February of 2021, we saw the lowest percentage of workers looking to stay in the hospitality industry — dropping from 69 percent in 2017 to just 45 percent in 2021.

To better understand this decline and what, if any, role COVID played, we surveyed hospitality industry workers again. Specifically, one question we wanted to answer was how workers felt about their employer’s response to COVID and, based on this, if they were planning any professional changes as a result.

The Impacts of COVID-19 on Company Culture

Through the years — and across multiple industries — company culture has always been a top priority for workers. A critical component of company culture is shared values. For many workers, COVID-19 was a watershed moment — the ultimate test of the company’s values. Simply put, did employees learn that their company’s mission statement was just words or was it a true decision-making guide when tough choices needed to be made?

Our research found that, overall, 24.8 percent of workers across multiple industries were dissatisfied with their employer’s COVID-19 response. But in the hospitality industry, 41.6 percent were dissatisfied and a similar percentage indicated their employer did not live up to it’s mission statement during COVID-19. Of all hospitality worker respondents, 37.5 percent indicated they planned to leave their current employer, with 77.7% of those workers likely leaving before summer.

Finally, we asked respondents who planned to leave what was immediately preventing them from doing so, and 84.4 percent said they were waiting to be vaccinated — or to find another work opportunity first.

There Will Be Winners and Losers Post-COVID

First, the good news: 74.6 percent of workers across all industries — and 58.3 percent in the hospitality industry — were satisfied with their company’s response to COVID. A similar percentage also felt their values aligned with their current employers. This indicates that organizations that were perceived to perform well during the crisis will be rewarded with greater employee retention. As a result, they will need to hire fewer people.

In addition to individual companies, some industries will also benefit as labor rewards those that showcased their values during COVID — likely becoming a preferred career destination for workers. Unfortunately, this is not good news for the hospitality industry; it ranked near the bottom across all industries for its COVID response.

Companies whose culture did not align well with workers will likely suffer and could see greater attrition — just as the peak summer demand hits the travel businesses. Whether this will present long-term damage to the reputation of companies, or just be a blip, remains to be seen. Regardless, companies will face considerable headwinds as hiring ramps up for summer demand.

Todd Montgomery

Profile: Todd Montgomery is the Robin and Curt Baney Endowed Professor at Oregon State University and teaches full-time in Bend and online. His research focuses on the impact of automation technology on the customer and employee experience. His work is featured on a PBS and ABC documentary series called Tech Trek. He regularly presents at conferences and contributes to media stories.