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The State of Recruitment: Service Industry

Data-Driven Intelligence, Programmatic| Views: 575

The service industry makes up a large slice of the US economy, with nearly 14 million employed workers gaining income from jobs in fast food, restaurants, hotels and hospitality.

Currently, employees in the sector work an average of 26.8 hours per week earning $14.90 per hour. A fast-paced, high-stakes sector, the accommodations and food services industry experiences the highest churn rate for workers at over 50%.

Job positions in restaurants and hotels continue to open up despite plummeting unemployment rates. This widening gap signals a need for change in recruitment within the sector. Now is the time for hiring managers in service-based establishments to evaluate whether or not their current recruitment strategies are effective, and if they aren’t, how to improve them for maximum hiring success.  

Challenges in recruiting for the service industry

As evidenced by a high churn rate, hiring within the food, beverage and hospitality sector poses a clear challenge for employers. Because the industry relies heavily on customer satisfaction, establishments must take extra care to hire staff that supports their unique vision for clientele experience. One poor hiring decision can cost a company in money, time and customer satisfaction ratings. In short: employers cannot afford to make poor hiring choices.

It’s important that managers in the service industry recognize the common challenges they face, and actively work to overcome them. Perhaps the biggest source of hiring difficulty in the service industry is employee turnover. For a small or medium-sized business, losing a staff member means more than just a loss of labor. It often signals other detrimental consequences related to the following:

  • Cost – Replacing an employee (especially one who was in a management or leadership role) takes time, which ultimately drains funds. Depending on the type of job advertisement used, attracting new candidates can be an expensive endeavor if attempted without cost-saving hiring tools.
  • Difficulty sourcing candidates – With unemployment rates down, competition is growing and the gap between the number of open positions and available candidates is widening.
  • Team training – New employees must spend time learning the ways of an establishment, and this comes with a price tag for hiring managers.
  • Scheduling and shifts – Losing a team member may wreak havoc on schedules, causing inefficiencies in shifts, employee burnout, or worse yet, if a company is negligent about labor laws, legal trouble.
  • Customer satisfaction – Having to train new employees can lead to a temporary drop in the quality of service, which in turn has a negative effect on customer experience.

Best practices for service job recruitment

According to Upserve, the average cost of hiring a restaurant employee on hourly wage can be upwards of $3,500. With a 50% chance of that employee leaving, this type of investment isn’t one to take lightly.

In order to stay competitive in the hiring wars and avoid unnecessary losses due to hiring challenges, employers should adopt new standards for recruiting within the service industry that utilize the latest available tools and technology.

Although it’s not possible to fully automate the recruitment process, Demand-Side Platforms (DSPs) can make hiring more manageable by streamlining otherwise cumbersome processes. Recruitment platforms take into account employer hiring budgets to automatically place job advertisements in the right places, saving hiring managers both time and money in the long run. DSPs allow employers of all sizes to optimize their application funnels and instead focus their time and energy on interviewing quality candidates. Ultimately, recruitment technology keeps many of the core challenges of the service industry in check.

Bottomline: Service industry hiring challenges aren’t leaving anytime soon, but they can be mitigated with the right tools.

In an industry plagued by high turnover rates and a diminishing applicant pool, employers must get ahead of any challenges in order to stay competitive.

Hiring in the service sector doesn’t have to be tough, despite disappointing industry statistics. With smart improvements in candidate sourcing and job advertisement – and through the use of recruitment technology – establishments across the food, beverage and hospitality industries can dramatically increase their chances of attracting a workforce that both delights customers and stays onboard for the long haul.

About Mike Kofi Okyere

Mike Kofi Okyere was founder and CEO of Perengo (acquired by Radancy in 2019) and has enjoyed applying his years of experience in the world of e-commerce and Ad Tech to improving the world of recruitment through algorithms and machine learning. Previously, he served as the head of performance advertising for AdMob (SEA/AU NZ), before its acquisition by Google in 2010. At Google, he drove the strategy and execution for mobile display advertising as head of mobile advertising for Australia/New Zealand, and then head of mobile display advertising for Google Asia. Thereafter he worked in director of sales roles with both Criteo and Issuu before founding Perengo in 2015.

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