As coronavirus-related restrictions ease, hospitality, restaurant and service companies have the chance to return to full operations – only to find a new challenge in rehiring enough workers to meet increasing demand.“I’ve had quite a few members (of the chamber of commerce) reach out to me, telling me that they haven’t been able to find employees,” Nancy Hoffman Vanyek, chief executive of the Greater San Fernando Chamber of Commerce, said. “Some aren’t even getting applications for jobs.”These businesses, Vanyek said, have more job ads going up in search of workers, but are receiving fewer responses than prior to the pandemic and have higher rates of no-show interviewees than ever before, an observation echoed by multiple business owners and industry professionals in the Valley area.
“It has been quite a difficult process,” Vanyek said. “Of course there are all philosophies out there of some people that feel that the subsidized unemployment is keeping people from applying, but I think there’s so much more to it than that.”Some industry professionals blame increased unemployment benefits and stimulus checks for incentivizing people to stay home, while others see the labor shortage as a natural result of so many businesses requiring new help all at once. Further complicating the process for workers are questions regarding childcare and working conditions. And for employers, new regulations complicate the process.
In the Valley, the difficult reality for food service and hospitality employers combines elements from each of these trends and more.
“Our industry – tourism – I think, was the hardest hit of any industry and is still not back. I mean, we have to start with this premise – it’s not like there are jobs out there,” Kurt Petersen, co-president of Unite Here Local 11, a union for hospitality and service workers in Los Angeles and Orange Counties, said, citing the jobs report released last month. Employers added 266,000 jobs nationwide in April, the Bureau of Labor Statistics reported, a fraction of the projected recovery, and the overall unemployment rate rose for the first time in a year.“The question about whether people are willing to go back, I think, is premature because in hotels, in any tourism-related job, there are no jobs,” Petersen said. “We’re still limping along.”A union worker from the Sheraton Universal Hotel in Universal City told the Business Journal that the worker is still waiting to be called back more than a year after being laid off.
Hotels were intensely impacted by the pandemic, as the travel and tourism industries halted nearly overnight when business closures were first enacted last year. Employees were laid off, furloughed and, in many cases, fired. In a poll of 4,000 industry workers by Hotel Business, more than a third said they are seeking employment outside of the industry, with most of those respondents citing that employers were too quick to fire or furlough them and that employers cared more about stock value than the workers themselves.Right to recallIn response to the mass layoffs, employees represented by unions, including Unite Here Local 11, rallied to support the passing of SB93, which Gov. Gavin Newsom signed into law last month. The new statute, known as the right to recall, requires that employers in certain industries, including hospitality, make written job offers to employees whom they laid off because of COVID-19 before seeking other candidates. Employees have five business days to respond and, if more than one employee responds, the employer must award the job by seniority.“It has been a bumpy ride, to say the least, despite our efforts to do some paid ad listings and more targeted searches and incentive programs,” David Barnett, director of sales and marketing for Hyatt Regency Westlake, said of the rehiring process. The hotel is currently operating at roughly 25 percent staffing capacity, he said.
Barnett said Hyatt Regency Westlake is offering bonuses upward of $1,000 for line associates who stay on after 90 days. He didn’t comment on what percentage of laid off or fired workers are called back, but said it has been challenging to find new help, despite the cash incentive.“We’re doing everything we can to navigate that and to be more nimble. … There’s talent out there that wants to work, it has just shrunken,” Barnett said. “Those companies that are the quickest to pivot and speak to that talent and what their hesitations are returning to work, are going to be the ones that secure that smaller pool of talent that’s out there.”Hyatt Regency Westlake isn’t alone in offering incentives for new hires. McDonald’s Corp. and Chipotle Mexican Grill Inc. announced this month increased starting wages for most positions. In the current economy, such large corporations are often better equipped financially to raise wages than small businesses.
“Being a small business as I am, we do start at $15 an hour. So we started higher than what was required of a small business of my size, being under 25 employees,” Katina Cyler, owner of the soul food restaurant Sweet Blessings by Cyler in Van Nuys.
Restaurants with 25 or fewer employees require a minimum wage of $13 an hour. Cyler is looking to add three more staff to her team of five and has had few responses, despite having a slightly higher rate than other small restaurants in the market. “I knew that was a part of trying to get the better workers or the long-term workers; I knew I had to come in with something at least that was decent,” she said.Psychological impactCyler believes the extended closures have exerted a mental impact on people that is part of what keeps them from wanting to return to work. For some businesses, reduced capacity requirements mean they have changed service hours or put off opening new locations, which also has impacted hiring.
“We have an Encino restaurant and a Rialto restaurant. They’re both built and sitting there,” Mike Colonna, chief executive of Norm’s Restaurants, said. “I didn’t want to open up until we could open up almost fully, so that when we opened up the new restaurants they would be up and running in a normal situation versus a diminished sales situation.”The Southern California chain has 20 restaurants, including a long-term outlet in Van Nuys. The restaurants are usually open 24 hours, but currently operate with limited hour and capacity restrictions.
“Part of the roller coaster ride we’ve been on is probably a subtle factor, that of uncertainty for the hospitality business that we couldn’t commit – because of the government restrictions – to some kind of long-term plan and security of employment for a lot of people,” Colonna said.
Time to Rehire
