Tuesday, January 10, 2006

Hospitality study: labor supply is greatest concern, immigration is part of solution

Jeff Coy of the International Society of Hospitality Consultants writes in this article that the tight labor supply is the greatest threat facing the hospitality industry, and that net immigration levels serve as a buffer to protect the U.S. from other factors which would otherwise constrict supply. Coy also cites an anecdote about tough competition for hospitality employees in Nashville.

“'In Nashville, a new general manager of major chain hotel sent a truck to a competitor’s property. On the side of the truck was a sign offering cash bonuses to employees willing to come to work for him. On the inside of the truck was a man handing out applications. At the Broadmoor Hotel in Colorado Springs, the average housekeeper accumulated almost 500 hours of overtime last year. When Disney Hotels was recruiting workers for its hotels and restaurants in Orlando, company representatives traveled to Pittsburgh, Rochester NY and San Juan, Puerto Rico offering $1500 relocation bonuses and a $100 airline ticket to anyone who would work for Disney for at least one year,' according to Valerie Ferguson, former chairman of AH&LA, the trade association of the nation’s $93 billion dollar lodging industry in her testimony to US House Committee on Education and the Workforce."

"In the 21st century, the world economy is a service-economy. Services require people. Therefore, any worker shortages have a greater impact on the service industries, such as hospitality, leisure, recreation, childcare, healthcare, assisted living, long term care and other personal services. The number of available jobs in the USA is projected to increase by 22 million by 2010. Yet the labor force is projected to increase by only 17 million, according to the Bureau of Labor Statistics. The US hospitality and leisure industry is expected to grow by 2.1 million jobs between 2002 and 2012 (17.8 percent) which represents a faster increase than the 14.8 percent job growth for all industries."

"When you first delve into the Shrinking Labor Force issue, you quickly realize it is not the problem of just one occupation or one industry or even one country. It is not the problem of just the advanced nations, but rather it is a global problem that affects almost all of the major countries of the world. Why is this? What are the causes of a shrinking labor supply in so many countries?

* Fewer babies born
* People living longer
* Slowing population growth rate
* Aging of the population
* Fewer persons in the working-age group
* Fewer working-age persons participating in the labor force
* Geographical separation of jobs and workers
* Net immigration"

"The United States can maintain a fairly brisk growth in its labor supply over the next 50 years without any change in its current levels of fertility, immigration and labor force participation. Even if the United States fertility rate were to fall from 2.1 to 1.8, the USA labor force would continue to grow, although at a considerably slower rate after 2015. If this relatively favorable future is cause for concern, other countries face a more serious situation."

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