Transitioning Out Of The Service Sector

For many hospitality veterans, a new career is the only way forward.

There are many stories of service employees leaving the industry to venture into new careers, start their own business, or seek higher education. During a specially strong economy or in the midst of a recession, ex-pats of the hospitality industry look to expand on their skills or to gain new ones. However, Covid-19 has created an unprecedented situation where this choice is a matter of survival rather than growth, as many jobs may never return.

Writing for Brookings, a non-profit research organization in Washington D.C., Marcela Escobari, stated that "low-wage workers need better pathways into decent jobs, and from shrinking occupations to the jobs of tomorrow." This creates a challenge for policymakers to simultaneously create jobs in an economy decimated by the pandemic and provide alternatives for low-wage workers to find paths to more stable jobs. The obstacle that labor trends have long shown us is that these opportunities for growth may be in jobs that require training and or technical aptitudes this sector of the labor force may not possess. More challenging is the idea that these new jobs may not exist yet.

This is especially evident in how our consumer behaviors have been shaped by the pandemic. Contactless digital options to purchases and experiences create job titles or expand on the need for labor in industries that are seeing growth even during the recession. The latest report from the U.S. Labor Department shows that we have gained back 12 million of the 22 million jobs lost in early spring. However, this does not tell the whole story. The gains are not only unemployed Americans returning to their jobs but a large percentage of those entering new labor sectors.

More importantly, is the consideration that many jobs may not return because of the automation of their functions. Where consumers see the need to reduce the risk of infection by interacting with a computer or software rather than a person, the labor market sees one less person to re-employ. This then becomes the balance for industry decision-makers. For example, it's not a direct relationship that the job to support and maintain the automated machine replacing a cashier can be done by the cashier being replaced.

So where do all of the displaced servers, airline attendants, janitors, cooks, and housekeeping attendants find employment? Many are turning to vocational programs or technical fields where the training can be achieved without a huge time or financial investment. Other service industry workers have simply transferred their skills and experience into industries in need of them. House attendants can work as janitorial staff in hospitals, servers can work in food service in healthcare or senior living facilities, and some front-office personnel have been able to find employment in retail distribution centers.

Experts agree that the hospitality industry may not return to Pre-Covid levels until 2023 in the best-case scenario. This prolonged exposure to employment displacement will be felt hardest by low-wage workers since the opportunities for skill transference is least likely. Even during the ramp-up to normal, it is possible that REITs, who have suffered as much as 70% losses in their value, will look to this new automation as a way to expedite their financial recovery. This will undoubtedly change the landscape of the service industry workforce forever.