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Labor Shortages, Low Tips, Burnout: Can We Turn The Tide for Frontline Hospitality Workers?

By Carol Leaman Co-founder & CEO, Axonify | October 2024

Hospitality is facing a host of issues across the world, from labor shortages and burnout to outdated training programs and shifting customer needs. In the United States and the United Kingdom specifically, frontline workers and managers are struggling with these challenges, which threaten their well-being. I’ve personally had a front row seat to these challenges over the years as the CEO of a company deeply seated in the frontline training industry.

A recent survey by Axonify of frontline hospitality managers in the U.S. and the UK, uncovering a variety of problems that are putting both employees and managers under significant pressure.

Let’s take a deep dive into the factors impacting current hospitality workers and what they mean for the industry moving forward.

Lower Gratuities Are Affecting Employee Morale

For many frontline hospitality workers, tips are not just a bonus they get on top of their typical wages – tips make up a solid chunk of their monthly income. Given the rising cost of goods and fluctuating economy, however, consumers are leaving less and less across the industry, signaling that consumer behavior has shifted. This trend is hitting workers hard, exacerbating the financial stress many already feel due to low base wages, and is certainly a factor for the recent rise in employee dissatisfaction overall.

Our survey found that a noticeable drop in guest tips is creating financial strain on workers who are already dealing with high stress levels and heavy workloads. In the U.S., nearly a third (61%) of hospitality managers have observed this drop in gratuities. This trend is leading to a cascade of negative outcomes, including increased turnover, as nearly half of workers have left their jobs and many others are abandoning shifts early. There is also the emotional strain as a substantial number of employees report experiencing emotional outbursts (i.e., crying or yelling) and a trend of workers turning to social media to vent their frustrations.

Guests, too, are contributing to the strain. With rising expectations and unpredictable reactions, they are making an already difficult job even harder. Tips have traditionally served as a form of immediate feedback for workers and when tips decrease, it can feel like a personal failure. This is true even when the real issue might be beyond the employee’s control. This can erode morale and contribute to burnout among employees and the managers who support them.

Even further, a significant portion of managers report having to expel or ban guests due to poor treatment of staff, while others are caught in the middle of escalating conflicts between guests and workers over tipping issues. This volatile environment is leading to widespread burnout, affecting both frontline workers and the managers who support them.

Managers and Workers Are Burnt Out

Burnout is present across many industries, including hospitality, however, some would argue that the current hospitality environment has accelerated burnout to new levels.

Burnout is defined as a physical or mental collapse caused by overwork or stress – and it’s becoming increasingly common among frontline workers, fueled by a variety of factors including chronic stress, understaffing, long hours and an overall lack of support for managing pressures. It’s more than just a feeling of tiredness and it impacts employee engagement as well as productivity. In the U.S., 47% of frontline managers report experiencing burnout themselves, and 68% say their employees are feeling similarly overwhelmed. Meanwhile, in the UK the situation is similar, with 50% of managers experiencing burnout and 62% observing burnout among their staff.

Frontline hospitality employees today are up against shifting customer demands and expectations as well as problem-solving pressures that can lead to extreme levels of stress. When companies are experiencing a smaller employee count, existing workers are tasked with taking on the load, potentially causing strain and additional stress.

Long working hours further disrupt work-life balance, contributing to physical and emotional exhaustion for workers. For example, U.S. managers have reported a noticeable drop in productivity (56%) and a decline in customer service quality (43%) due to burnout. In the UK, 54% of managers have lost workers to burnout, and 44% have seen a decline in the quality of guest service.

Some view burnout as a personal issue, but at its core, it’s really a business problem. It’s simple – employees that are burnt out are less engaged and productive overall, meaning they are more likely to make mistakes in the workplace. Burnt out workers are also more likely to leave their jobs, further contributing to the worker shortage and creating a cycle where the burden on remaining employees will only grow - leading to additional burnout and turnover.

Labor Shortages Are Fueling Workforce Issues

When people think of “hospitality,” they usually imagine the energy and dedication of its frontline workers – those who greet guests with a smile, answer questions, and ensure that customers are having a great experience and creating core memories. However, today the industry is facing a shrinking workforce, a common thread across both the U.S. and UK hospitality sectors. In the UK, more than half (53%) of hospitality managers report that staffing shortages are significantly impacting their operations.

This issue is mirrored in the US, where similar concerns are raised, exacerbated by factors like reduced tipping and rising burnout. The root causes of these shortages vary, with UK managers pointing to the long-term effects of Brexit, while U.S. counterparts cite a challenging job market and fluctuating guest behaviors. Some workers also likely leave due to wanting a better work-life balance or they are tired of the long working hours and high stress that come with the job.

The shortage is more than just numbers. It’s a symptom of a deeper issue within the industry. Workers are being asked to do more with less – longer hours, more responsibility and growing and expanding job responsibilities. This increased workload, coupled with the pressure to maintain high standards of customer service, is leading to significant issues for workers. When companies have fewer hands on deck, the quality of service suffers and ultimately will impact their bottom line.

Training Gaps Are Leaving Hospitality Workers Ill-Equipped

Another issue impacting the industry is the current gap in training programs. Training programs, which should serve as a buffer against these challenges, are falling short, often creating a disconnect between the skills frontline workers possess and the expectations they attempt to meet. Many are outdated, inaccessible, and ill-equipped to prepare employees for the realities of today’s hospitality landscape.

In the UK, 20% of managers report that their current training programs do not effectively engage or motivate employees. Plus, 45% believe that employees frequently encounter situations where they feel unprepared due to inadequate training.

Considering how fast-paced and customer-centric the hospitality industry is, employees must be able to act quickly on their feet in a variety of scenarios, as well as handle them with a strong comfort level. When workers aren’t trained on how to properly handle all the aspects of their job, it not only impacts their confidence and job satisfaction, but also the customer experience. Addressing these training gaps is essential for fostering a more competent, engaged and motivated frontline workforce, while at the same time empowering employees to excel in their roles and still deliver a high-quality customer experience.

Hospitality Leaders Must Adopt A Multi-Pronged Approach

These findings underscore a broader, systemic issue within the industry. It’s not just about the immediate symptoms of reduced tips and burnout - the underlying challenges are more pervasive. Managers are facing a daunting task: they must navigate an environment where technological advancements are reducing the skill requirements for certain jobs, while also contending with the increasing demands of both employees and guests.

When looking for where to start, companies should look to a few key areas. First, invest in training and development. Training helps workers feel confident and learn the skills needed to do their jobs to the best level possible. This helps workers stay engaged and motivated to do a good job in their role. Second, companies should create a supportive working environment where workers feel valued and heard. This is incredibly important and can involve implementing flexible scheduling, providing access to mental health resources or simply encouraging an environment where workers can easily and safely voice concerns.

By starting with these core areas first, companies will be able to create a more resilient, sustainable work environment that not only meets the needs of today’s workforce but also elevates the overall guest experience.

Defining The Path Forward

Every industry faces its challenges, but like any challenge, these can be overcome with the right measures in place. The path forward begins with companies acknowledging and identifying what the challenges are for their workforce and what solutions exist to help them overcome those challenges. In doing so, they will create a more resilient and happy workforce, full of employees that know how to do their jobs and are provided with the appropriate training to help them succeed.

Frontline workers are the backbone of the hospitality industry and the time is now for companies to turn the tide for the better.

Ms. Leaman

Carol Leaman (BA, MAcc, FCPA) is an award-winning thought leader with a track record of successfully leading technology companies. Not only is she a disruptor in the corporate learning space, but since 2011, Ms. Leaman has served as the CEO of Axonify, the learning and enablement solution used by more than 250 global companies across 160+ countries to help frontlines learn, connect and get things done-in the flow of work-and drive the results that matter. Prior to Axonify, she was the CEO of PostRank Inc., a social engagement analytics platform she sold to Google in 2011. She was also the CEO of other notable technology firms, including RSS Solutions and Fakespace Systems. Ms. Leaman is a celebrated entrepreneur and trailblazer who has received several awards for her meaningful work (including the Sarah Kirke Award for Canada's Leading Female Hi-Tech Entrepreneur in 2010, the Waterloo Region Entrepreneur Hall of Fame Intrepid Award in 2011 and the Profit500 Award for Canada's Leading Female Entrepreneur 2017). Her articles have appeared in numerous learning, business and technology publications. Additionally, she sits on the boards of many organizations and advises a variety of Canadian high-tech firms (including Chaordix Inc., Nanolumens Inc. and the UW Stratford Advisory Council).

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13. PRIVACY POLICY

The following is the Privacy Policy for HotelExecutive

We can be reached via telephone, email, or online at our contact page. When you visit our site we do not log any information regarding your domain or email address. Information Sharing: We do not share user information with any third parties other than via press release distribution as described below.

Hotel Newswire is a newswire service that distributes press releases on behalf of our users. If you decide to submit a press release for distribution through our system we will transmit your entire press release including any personal information therein contained to our media contacts and online distribution points including search engines. This is the only redistribution of your information that we engage in. Your submission of press releases through our system indicates consent with this policy. The information we collect during your registration process is used to notify users about updates to our service and inform users of any special events hosted by Hotel Newswire. This information is not shared with other organizations for commercial or non-commercial purposes.

Cookies: Our system requires the use of cookies to enable the user to log back into our website to access information from the newswire, without having to log in each time using the required username and password.

If you do not want to receive email from us in the future, please let us know by following instructions included in our communication with you. Users who supply us with telephone numbers online may receive telephone contact from us regarding their account, or informing them of new products and services available on the HotelExecutive website. If you do not wish to receive such telephone calls, please edit your account and remove your phone number from your account profile. This can be done from your user account menu.

Ad Servers: We do not partner with or have any relationship with any ad server companies. From time to time, we may use customer information for new uses not previously disclosed in our privacy notice. If our information practices change at any time, we will post the policy changes to our website to notify you of these changes and provide you with the ability to opt out of these new uses. If you are concerned about how your information is used, you should check back at our website periodically.

Upon request we provide site visitors with access to all information (including proprietary information) that we maintain about them. Users can access this information by logging in to their account.

Security: We always use industry-standard encryption technologies while transferring and receiving user data exchanged with our site. We have appropriate security measures in place in our physical facilities to protect against the loss, misuse, or alteration of information that we have collected from you on our site. We do not store credit card information in our systems.

If you feel that this site is not following its stated information policy, you may contact us.