How Spanish hospitality companies can overcome the staff-shortage challenge

Spain’s hospitality industry could make use of five key acquisition trends to attract and retain talent.

Spain’s economy is more dependent on tourism income than most other European countries. Before the COVID-19 pandemic, the Spanish tourism sector was worth €155 billion, or 14.3 percent of national GDP, and accounted for nearly 15 percent of total jobs in the country. 1 And in some communities, tourism contributes to over 20 percent of all economic activity. 2

The pandemic knocked Spain’s economy—especially the tourism sector. Spain’s hospitality sector is showing signs of recovery; however, this recovery is hindered by a staff shortage. The high levels of layoffs and furloughs during the pandemic caused talent leakage to other sectors, which is now threatening the hospitality industry’s operational stability and quality. The sector would benefit from a holistic education strategy and more opportunities for training in hospitality; however, training is currently lacking.

Given the importance of tourism in the country’s economy, Spain’s hospitality sector will need to address the current labor shortage to maintain the quality of its tourism services and remain competitive. Doing so will help the industry cultivate the talent it needs for the future. Re-thinking and prioritizing talent acquisition, (re-) training, and retention are critical in this regard.

This article outlines the current Spanish hospitality landscape, and the effects that COVID-19 restrictions had on the sector. It also draws on five key global talent acquisition trends that could help the sector address the current labor shortage and ensure that it has sufficient and well-trained talent for the future.

Spain’s hospitality sector was hit hard by the pandemic

In April 2022, Spain recorded 20 million workers—breaking its employment record. Today, the country has 500,000 more workers than before the pandemic broke out, which suggests that employment has resumed its growth path. 3

However, the hospitality industry—which usually employs around one in eight workers—is under-resourced, with roughly 73,400 fewer employees than it had in February 2020 (a 5.5 percent fall). Employment in the hotel sector closely follows seasonal peaks in demand but sank to zero with the onset of the pandemic and has since experienced talent leakage to other industries.

Especially impacted are the lodging and food and beverage (F&B) establishments, which have seen the largest drop in job availability and the highest unemployment rates in the sector due to the staff shortage (Exhibit 1).

While the overall economy has largely recovered and generated new jobs, the hospitality sector started 2022 with 5.5 percent less workers.
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This staff shortage in hospitality is reflected in the economy. While tourism traditionally represents around 14 percent of the country’s GDP, the sector’s contribution has more than halved from €155 billion in 2019 to €61 billion in 2020. 4 Tourism is showing signs of recovery; however, given the country’s dependence on tourism revenues, the economic impact of COVID-19 is significant (Exhibit 2).

The tourism sector in Spain has traditionally represented around 14 percent of total GDP and employed roughly 1 in 8 workers.
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Even as tourism and hotel bookings begin to recover, the staff shortage still poses a significant threat to the industry. 5

The challenge for hospitality lies in re-attracting skilled employees

The tourism sector now faces the challenge of re-attracting employees to the industry as demand returns.

However, the crux of the issue may not lie in the number of workers needed to bridge the shortfall, but in their skills, which are critical for providing high levels of service. The lack of skilled workers in the industry was already a concern pre-pandemic, with the European hotel association, HOTREC, citing this as one of the five most pressing issues facing European hospitality. 6 Employment data only reflect the number of employees, not necessarily their skills, education, or training—so the sector’s talent crunch may be more pronounced than it seems.

Spain may be facing a hospitality talent crunch as there are limited opportunities to gain formal hospitality training. There is no holistic education strategy within the sector, as few Spanish universities provide hospitality training or offer qualifications that provide career paths in the industry. Vocational training (formación profesional dual) is an emerging option for those wishing to pursue a career in hospitality, yet these centers do not have capacity to meet the industry’s needs. It is estimated that the Spanish hospitality industry will need to fill 900,000 jobs by 2030, but currently there are only 50,000 students gaining professional training in hospitality and tourism each year. 7 As such, Spain’s lack of workers who are trained in hospitality may pose a threat to the future of the industry.

Sidebar

By comparison, other countries have centers of excellence for hospitality, or dedicated areas of study with defined career paths, to support the industry. For example, in Germany, there are two major avenues for obtaining specialized tourism education: an apprenticeship (that is, vocational training) or a university degree (see sidebar, “Tourism education in Germany”). A similar approach could help Spain to develop and maintain a skilled hospitality workforce.

Five key talent acquisition trends are shifting skillsets and ways of working

The hospitality industry of the future will require employees with new skillsets, and may need to adopt new ways of working, particularly if Spain is to attract the talent needed to fill the current labor shortage. The following five trends are affecting hospitality globally.

Digitalization is increasing in all areas of business, requiring new skills

The hotel industry is being transformed by digital and automation technologies, such as digitalized and contactless front-desk operations, AI-supported F&B planning, and analytics-driven pricing.

There is significant opportunity to leverage digital solutions to improve both talent management and employee experience. Companies can use digital solutions to attract, train, manage, and retain employees. When attracting talent, such solutions can match the right people to the right positions while controlling talent-acquisition costs. For example, Check-In Jobs—a Spanish hospitality-focused job board powered by beWanted—allows job seekers to create profiles demonstrating skills and employers can match openings with the best-positioned candidate. Digital solutions could therefore be a valuable tool for Spanish hospitality companies to efficiently find the talent they need in a time of talent shortage.

In addition, with current enrollment in hospitality degrees at 50,000 students a year, hospitality providers may need to complement optimized hiring practices with training. Digital solutions can assist—for example, many hotels use employee-management systems, such as Nivimu, that include a development platform to centralize learning and collect feedback on training programs.

Digital solutions can also help to retain talent. For example, hospitality businesses can leverage analytics to identify pain points that contribute to employee dissatisfaction. Using human resource analytics in other traditionally high-turnover industries has resulted in a double-digit-percentage reduction in attrition. 8

COVID-19 triggered high demand for remote working, and employees now expect greater flexibility

Globally, the share of job searches for remote work opportunities grew by 360 percent between June 2019 and June 2021 and is continuing to rise. 9 While only around a fifth of job postings offered the option to work remotely five years ago, nearly 80 percent do so now. 10

Not all hospitality roles provide options for remote working, but hybrid models are increasingly being developed, such as positions in social media management, event planning, accounting, marketing and public relations, customer support, and virtual concierge services.

However, many hospitality roles, such as housekeeping, will continue to be performed in person. To meet employees’ expectations, employers could still offer flexibility by paying attention to how hospitality career paths are designed. For example, employers could consider innovative formulas that incorporate flexibility (such as part-time positions, and flexible working hours within certain timeslots). Employees could also rotate between different jobs or locations, or be offered additional perks such as free time.

High vacancies and attrition create a burning platform for more thoughtful career paths and upskilling

The hospitality industry has an opportunity to attract multiskilled employees and provide them with development opportunities. In times of labor shortages, fewer people have more tasks to perform, creating operational challenges. However, this provides opportunities for upskilling.

To upskill their employees, managers could invest time in fostering cross-departmental collaboration, and identify talented employees suited for multiple tasks. They could also develop digital and onsite training modules to support staff in their roles, take measures to reduce process complexity, and create digital and instant communication channels for more effective problem solving.

Sidebar

Hyatt, for instance, partnered with Konverse to create a centralized digital workspace which includes communication channels and a task-tracking system that enables daily collaboration between employees—from the front desk to housekeeping and engineering. It also took steps to increase employee satisfaction (see sidebar, “How Hyatt improved employee satisfaction”).

The growing interest in environmental, social, and governance topics among employees shapes employment choices

A recent employee engagement study in the United States shows that 58 percent of employees consider the social and environmental responsibility of the company when choosing a place of work. 11 As Generation Z—with a greater focus on sustainability issues—joins the workforce, conversations among hospitality students are centering around sustainability and employers “doing the right thing”. 12

With environmental, social, and governance (ESG) topics at the front of many employees’ minds, employers are also considering them. The growing interest in these topics is now helping shape the vision of top management—44 percent of CEOs of Fortune 500 companies agree that their companies should be actively involved in key societal issues within the core business. 13

As customers, investors, and employees grow in their awareness of ESG topics, hotels may find it helpful to review aspects of their corporate strategy and operations, including hiring practices and roles, to attract and retain the talent they need. However, the real challenge lies in changing the company culture to align with the ESG goals set out by executives and ensuring that management maintains these standards to ensure the company’s authenticity. 14

The bar for hygiene standards will remain elevated

The COVID-19 pandemic led to increased hygiene awareness—for both customers and companies. And the ongoing updates in regulations and protocols require constant staff training and retraining.

Even though restrictions implemented during the COVID-19 pandemic are gradually being lifted, many hygiene protocols will likely endure beyond the pandemic. Accordingly, new roles and skills are being created to improve the coordination of hygiene-related initiatives across hospitality companies to protect the safety of both guests and employees (Exhibit 3).

These trends are creating a need for new roles and skills in the hospitality industry.
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A path forward

Hospitality employers may need to adapt their hiring practices and explore ways in which they upskill and engage employees, in response to these five shifts. Companies looking to do so could consider the following actions:

  • Analyze talent suitability with digital tools: Poor hiring decisions can result in high employee turnover, as nearly 74 percent of employers report that they have hired the wrong person for the job—with a financial consequence of up to $15,000 per wrong hire per year. 15 Advanced data analytics can be a powerful tool to help identify appropriate candidates while reducing the subjective aspects of the screening process. An employer may define the specific talent they are looking for (analytic tools may help identify potential gaps) and work with a data analytics team to build a model that identifies predictive characteristics of success, using it to sieve through the stack of digital resumes. However, possible AI biases should be addressed to ensure a fair and beneficial outcome. 16
  • Clearly define and communicate job requirements and career paths: Talent retention relies on meeting job expectations, so it’s best to define employees’ roles and their requirements early in the game. Each candidate, and new employee, should know how performance will be evaluated and the perks, support, and benefits they will enjoy when they join the company. While an employee’s career trajectory may change after joining a company, the candidate should be aware of the options available and the path they can expect when they receive an offer.
  • Empower the HR department: A skilled HR team makes all the difference, but building one requires investment and training. The HR team could use the digital tools to screen the most suitable candidates quickly and streamline the overall hiring process. Even when a candidate is not the perfect fit for a specific role, the person may be suitable for another role, and the HR team can ensure that skills and expertise are matched to any vacancies.
  • Train, develop, and engage employees: Hiring the right people for the job is only part of the equation. Hospitality companies that ensure greater employee engagement and satisfaction by providing training, career advancement, and greater flexibility around working hours and roles can help to retain a skilled workforce. They could use digital tools for onsite and offsite training, or platforms that provide greater collaboration across the organization.
  • Reskill the workforce: Around 8.3 percent of Spain’s workforce will need to reskill or change industries by 2030 to cope with shifting business models. 17 To ensure adaptability and resilience, Spain’s hospitality sector could move beyond filling the current skills gap and instead prepare the workforce for the future. 18 Key to this would be to improve technological literacy in graduates through skill-based learning programs, such as those offered by the Instituto Tecnológico Hoteleroor, or through partnering with industry associations to develop dynamic learning courses. 19 Training should be ongoing to keep up to date with the latest technology and include benchmarks to measure the impacts of reskilling on performance. 20

Spain’s hospitality industry has an opportunity to rebuild its workforce by transforming hiring and retention practices. Doing so could help the industry overcome the current staff shortage, secure the talent needed to provide a quality service, and ensure a well-skilled workforce for the future.

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