Author: Kristin A. Horan, Assistant Professor and Deputy Director of Program Administration for the Targeted Research Training Program

Many places in the U.S. are seeing hints of pre-pandemic normalcy. Capacity limits have been eased in restaurants and more individuals and families are enjoying travel and leisure activities. In several industries across the nation, including Central Florida’s hospitality industry, this has allowed employers to create more open positions and bring back laid off and furloughed employees. But, there is a problem – employers are struggling to fill open jobs and in many cases have resorted to creative solutions to encourage applications. 

The public has weighed in on the causes of the labor shortage, sparking a healthy debate. On one hand, some have attributed the shortage to a decision not to work enabled by unemployment benefits. A typical argument under this logic might sound like “Why would employees return to work when they are able to stay at home collecting more money on unemployment?” This argument could assume that employees have low work ethic or that they are simply comparing their options and making a logical decision. 

On the other hand, some have suggested that employees may be using this unique moment in time to advocate for more far-reaching change. A typical argument using this logic might sound like “Why would employees choose to return to low-wage jobs with high demands and few necessary benefits, when their employers are now seeing how much they need them?” This argument assumes that employees’ attitudes regarding their employer, or even industry, are meaningfully shaped by whether or not their job allows them to meet basic needs.

The Targeted Research Training team opted for a data-driven approach to test this question. We surveyed hospitality employees around May 2020, which corresponded to the point in the pandemic in which employers were having to make very tough layoff and furlough decisions. We wanted to know what would influence an employee’s intention to return to the hospitality industry and their pre-pandemic employer. Here’s what we learned: 

The Influence of Wages

In our data, personal income influenced intentions to return to industry. Employees with the lowest and highest incomes had the strongest intentions to return. This may hint that low-wage employees may have limited industry mobility. However, it is important to think about context, such as how well an employee’s salary is matched to the cost of living in their area. When accounting for the state that an employee lived in, industry attractiveness was lowest when state minimum wage was low and state cost of living was high. This was true when considering both actual dollar amount of minimum wage and how the states’ minimum wage policy compared to the federal minimum wage policy.  

The Influence of Benefits

The presence of employee benefits significantly influenced employee’s intentions to return after the pandemic. In the table below, a check mark means that employees were more likely to want to return when they reported having the benefit. Interestingly, it generally did not make a difference whether they only had the benefit before the pandemic or maintained it during the pandemic. In this particular survey, employees seemed to be more motivated by benefits that helped them meet immediate medical or education needs.  

	Wanted to return to their employer	Wanted to return to the hospitality industry
Had medical benefits		✔
Had dental/vision benefits	✔	✔
Had HSA	✔	✔
Had tuition reimbursement	✔	✔
Had employee assistance program	✔	✔
Had time off benefits

The Take-Away

All in all, the results provide more support for the idea that potential employees consider how a job will enable them to meet immediate basic needs through a decent wage and benefits such as healthcare coverage. After all, these employees were considered heroes at the beginning of the pandemic. At that point many argued that what they need is a living wage and decent benefits, rather than solely a “thank you.” In a separate research study, Targeted Research Training analyzed news articles in the beginning of the pandemic (including those who directly interviewed essential workers) and discussed the hero status in the context of labor rights, wages, and benefits. This study shows the importance of considering employees’ immediate and basic needs, as well as the local context of those needs, and to structure jobs accordingly. The good news is that many Central Florida hospitality employers were already proactively considering ways to promote healthy pay and benefits packages pre-pandemic. Although the industry certainly has endured extreme hardships over the past year, we encourage them to adopt or rekindle an employee-forward focus to meet the needs of employees, employers, and guests.