Connecting the Dots: Employment

by Rich Luna

Editor’s Note: Connecting the Dots is a series of monthly conversations with Michael Dominguez, FASAE, CHSE, President and CEO of Associated Luxury Hotels International (ALHI). The series examines issues in the global economy that will “connect the dots” to be helpful not only in business but in life as well. This installment is moderated by Ashly Balding, Executive Vice President & Chief Sales Officer at ALHI.

Ashly Balding: So today, employment. Tell us what trends you're seeing. What have you heard??

Michael Dominguez: One of my favorite topics is really around employment, and I say this often when we're talking to Clients is we tend to talk about narratives that are six to nine months old as an industry. What we're trying to do here with Connecting the Dots is, can we skate to where the hockey puck is going to be, or at least try to anticipate where it's going to be versus where it is? I say that because you've always heard about our industry struggling with workforce. Latest CBRE report that I read, we basically are on par with the number of jobs open per hotel that we had back in 2019. So, yes, we've always had jobs open at a hotel. I think right now it's just over 14 positions per hotel in the United States that are open for work. We've always had that, though, and I think that's what we sometimes forget. But the important part is there's some hope there. We always need seasonal labor and what most of our Clients don't know is that hotels, specifically in resort destinations or in ski destinations, they actually use labor through H-2B visas. It’s part-time temporary work where people get to work here for a little bit and then go back home. That has always been capped. During the pandemic, it disappeared and that was problematic for all of us. It's now come back and then I just read a report, and this was great news, the Biden administration approved another 60,000 H-2Bs for this year, which means we'll have 130,000 this year versus the 65,000 that we usually have that's capped.?That's a huge benefit for us in the hotel industry specifically because a lot of those types of jobs go to hospitality and leisure, so that is a really, really great, great start for us. Outside of that, what we are seeing is a very healthy labor market. We see the quit rate has slowed down. That's important. People don't leave jobs unless the market is starting to get a little tighter. But the reason that matters is wage growth has now slowed down. Wage growth was well over indexing where we normally were and that was really putting a strain on hotels.?

Balding: Demographic surprises. Tell us a little bit about what you're seeing there.?

Dominguez: There really are some and I think this is going to shock most people. The number one growth, and Indeed showed this recently, but the number one growth in people applying for jobs are boomers. Harvard Business Review released a report: 34% growth in the boomers in the job market over the last three years. What everybody thought was the great retirement was the great time out -- 34% growth in that market. When you're applying for jobs, you know what everybody's thinking? I got to go find a bunch of young people when I'm not quite understanding, I actually have an older population that's now looking for work and candidly, in some cases, don't necessarily need the money, which means they probably have a lot more flexibility on whether it's full-time, part-time, what that looks like, what your needs are. I just think it's something for everyone to understand that people are coming back into the workforce. They're coming back because one, they're either bored, or two, they left because COVID was very dangerous for them. Now that COVID has subsided, they're back into the workplace. That is one shift. The other shift is Generation Z, and this is in the overall workforce. But Generation Z, 29 and younger, they are going to trade schools. They are not going to universities in mass. It doesn't mean none of them are going to university, but there is a huge uptake, almost a 20% increase, in vocational schools. They are learning how to be carpenters. They're learning how to be, literally electricians. That is what they are doing and they're knowing, ‘I can go to school for two years and literally get out and earning six figures.’ If they go to school is the question, and if they go to school, they're not going to go into debt to go to school.??It's a very different generation. But the thing that really matters to me is that 60% of the working population today does not have a bachelor's degree, and we still have people that require that on a job application.?

Balding: So, they should maybe think differently about that.?

Dominguez: Absolutely, because you are limiting yourself to 38% of the audience if that's the case. That’s a shift, a massive shift over the last 20 years where it was all about having a degree. That's not the requirement today. Our good friends at Delta Airlines no longer require it. Google doesn't require it. Amazon doesn't require it because they know we have to go train you to do the job anyway. I am not anti-school. That is not my message. I'm just looking at the trend line because if you're going to be my doctor, I want you going to school. Definitely go to school. It's not an anti-school message. It’s an awareness of how the demographic is shifting just a little bit. Then most importantly, I think for the hotel industry, is 16- to 19-year-olds, this Generation Z, 16- to 19-year-old workforce is the highest we've seen in over 25 years, and it was the Millennials that had actually shrunk that. It had been pretty consistent until the Millennials had come in and Generation Z is bringing it back. The reason that gives me great joy is because if you think about our hotels, when you spike in the summer, when everyone's out of school, who's working at the pool? Who's picking up towels? It used to be the kids that were working part-time while they're out of school. They're back and they're back in a big way, so that's really good for us.?

Balding: Great perspective. Thank you.