By Amanda Smith, EVP Michigan Restaurant & Lodging Association, Executive Director, MRLA Educational Foundation
As a society we are using terms like post-pandemic and now that things are normal. We use these phrases to celebrate our physical and emotional survival of the pandemic. However, the economy and operational environment for the hospitality industry has not survived, in fact, the current situation is extremely challenging. Rising interest rates are one of the critical challenges.
The Rising Cost of Food
Wholesale food prices (Producer Price Index-All Foods) jumped 15.6% between May 2021 and May 2022. May is the10th consecutive month with double-digit gains on a 12-month basis. Several of the major commodities in the wholesale food price index stood well above their year-ago levels in May: Eggs (259.9%), Butter (50.0%), Unprocessed fin fish (47.3%), Flour (36.7%), Fats and oils (32.5%), Processed poultry (25.2%), Milk (22.8%), Cheese (17.4%), Fresh Vegetables (39.6%), and Fresh Fruits and Melons (18.5%).
The Workforce Challenges
The hospitality industry workforce in Michigan was decimated by the pandemic. In March of 2020, an estimated 300,000 hospitality employers lost their jobs. The second shutdown in November of 2020, once again saw the industry hemorrhaging employees and many veteran employees, including management. Rebuilding the hospitality workforce has been a very slow process in Michigan. Between February and May of 2022, the American Hospitality industry gained 270,000 employees. However, during the same time period, Michigan lost 10,000 hospitality jobs. If you look back to May of 2019, the hospitality industry in Michigan is down more than 45,000 employees. Per the Bureau of Labor Statistics.
The lack of employees directly equates to a loss of business. The loss of business equates to the loss of sales tax revenue for our great state. You have all seen the examples of lost business revenue, they are everywhere. Food establishments are cutting hours, no longer serving breakfast or lunch, and being closed numerous days of the week. Hotels are selling out fast because they are only selling half or two-thirds of their rooms.
How Do We Rebuild and Advance the Industry Workforce Going Forward?
First, we make people aware of the opportunities within the hospitality industry. Yes, the hospitality industry has minimum wage employees, however, we also have six-figure employees. There are entrance and exit points along the career ladder, some provide flexible hours, others provide access to travel, and leadership growth opportunities are numerous. Hospitality jobs in Michigan are in every community and you, as a member of the hospitality workforce, can choose from our diverse communities in which to make your career.
Then we build strong pipelines. The legislators included 2.5 million dollars for the expansion of hospitality training programs at the high school level in the 2023 State of Michigan Operating Budget. The additional funding will allow for the expansion of the tried-and-true ProStart program and the ability to help school districts to bring the newly approved Hospitality & Tourism Management program to our communities. ProStart teaches restaurant management & culinary arts in career & technical education centers, it provides several nationally recognized credentials, articulated college credit, and advanced placement in the US Department of Labor registered apprenticeship. The Hospitality & Tourism Management program also provides students with industry-recognized credentials, articulated college credit, and a Labor & Economic Opportunity MARC certificate. More information on these programs can be found online at www.mrlaef.org/prostart
Our next step is the expansion of inclusion programs to be statewide. The hospitality industry welcomes all persons to become part of the team and advance their lives with gainful employment. The Restaurant Ready initiative and the HOPES program both provide access to hospitality careers. The HOPES program collaborates with justice-involved individuals to prepare them for their hospitality careers. Gainful employment directly lower recidivism rates. The Restaurant Ready initiative focuses on special populations of people who have had experiences that have prevented them from successful employment. Teaching foundational items like communication and teamwork the program shows an individual the power and pride of working and the potential for career advancement. www.mrlaef.org/workforce
Until recently Hospitality employees have not had the ability to take professional development courses while working in the industry. The Hospitality Training Institute of Michigan (HTIM) was founded to fill the training gap and provide a clear pathway forward.
HTIM is a licensed trade school, approved by the Michigan Department of Labor & Economic Opportunity that aims to be the first choice for leadership, compliance training, and skill set development for the hospitality industry. The 12-week courses will explore the hospitality industry’s business side from understanding POS reports and P&L statements to management and leadership training. As the saying goes people leave managers, not jobs the strong leadership focus in HTIM’s Hospitality Business Management Certificate will help provide the industry with strong leaders which over time will lower turnover.
HTIM also offers opportunities for apprenticeships with On Job Learning (OJL) and Related Training Instruction (RTI). For more information about HTIM, including courses, fees, and how to register, visit www.htim.com.
These four steps: marketing the opportunities, strong pipelines at the secondary level, expansion of inclusion programs, and access to professional development for current hospitality workers will all move our industry forward. Michigan Restaurant & Lodging Association, the Michigan Restaurant & Lodging Association Educational Foundation, and the Hospitality Training Institute of Michigan are working together to ensure a new normal is possible. What does your new normal look like? Does it include a career in hospitality? We can help you start your path at a Michigan restaurant, hotel, casino, or one of the fantastic tourist destinations only Michigan can provide.