The New Standards for Setting Wages and Salary for Hospitality Workers

The COVID-19 pandemic has left employers anxious to take the right actions to avoid significant losses for their companies. Post-pandemic staffing shortages have left a serious impact on the hospitality industry workforce. 

Hotel management and other hospitality businesses have suffered since the onset of the pandemic due to lower numbers of workers applying to fill their open positions. The average pay for hospitality workers has been affected by these changes, as businesses adjust their salaries for hospitality workers in hopes of attracting new staff in 2021. 

To make open jobs appealing to candidates, businesses need to set wages and pay rate amounts that are appropriate for post-pandemic positions.

The New Way to Set Your Hospitality Salary Model

If you are having problems with determining the best salary for hospitality workers at your company, you are not alone. Since the onset of COVID-19, many hospitality industry businesses like restaurants and hotels have been struggling to figure out how to set salary levels for employees post-pandemic. 

We at Adia work to shed light upon the solutions to this issue. Here we will explain the types of pay workers can receive, as well as the different methods of determining the salary for the members of your workforce.

Job or Skill-Based Pay

The first step in setting the best wages for workforce employees would be to decide which type of pay would be most appropriate. The two types of pay, Job or Skill-Based Pay, have significant differences which should be considered when determining wages.

Job-Based Pay

Job-Based Pay is the most common method of payment over Skill-Based Pay. Job-Based Pay involves paying an employee depending on their role. This compensation strategy is set based on the position itself. Examples of Job-Based Pay would be jobs that have pay scales, where pay raises are made available to employees based on the amount of time spent performing the job.

Skill-Based Pay

Skill-Based Pay is different than Job-Based Pay, in that it provides employees with the ability to earn additional pay based on their knowledge and skills relating to their position. This can be acquired through specialized training or formal certification in a worker’s career industry. An example of a role within the hospitality industry that might receive this kind of pay would be a restaurant assistant manager who received a raise for completing a restaurant management certification course deemed appropriate for their position.

Ask for Employee Input on Setting Wages

The effects of the COVID-19 pandemic have contributed to a hospitality staffing shortage. This had made it more difficult for hospitality businesses to bring new staff, and it has made retaining quality staff members more crucial. Therefore, it is helpful for you to ask your employees to share their input on setting new staff wages. 

The pandemic may have influenced their opinion on compensation packages, so you should find out from your workers what employment benefits matter to them most currently. This will help you to make wage adjustments that keep your current workers satisfied with their positions and to gain insight into what an average job applicant in their career field may be looking for.

Research the Current Average Pay for the Hospitality Industry

Researching the current average pay for hospitality industry positions is a great way to figure out competitive pay rates for the job you are hiring for. Many helpful websites provide updated salaries and wages for hospitality employees, based on jobs that are hiring now. 

The Department of Labor website features information on wages, earnings, and benefits based on area wage rates, employment statistics, compensation surveys, cost trends, and more. These can help you to figure out the best wage rates based on the geographic location, occupation, and industry of the job you are hiring for. Alternatively, this comparison tool can help you find the salaries of existing jobs related to the position you are hiring for. 

For example, perhaps you wish to find an appropriate hospitality management salary for a hotel. You can use the comparison tool to search “hotel management salaries” and add your zip code to find appropriate management salary ranges for hotels in your area.

Assess Industry Data to See the Current Rates Employees Are Taking On

Assessing industry data is a great way to determine the best wages to offer that can compete with the compensation packages offered by other businesses. Recent talk of increasing the minimum wage in the United States has made workers more selective when considering positions for hospitality industry careers. 

By looking at what pay and benefits are being offered for similar hospitality jobs by other companies, you can figure out the average competitive wage for your position. A benefit of Adia’s platform is that it provides a resource for businesses to see whether their wage is acceptable for workers.

Take a Look at Past Pay Structure and Budget

To accurately find the best wages for the members of your hospitality workforce, you should stay flexible when determining pay, and reconsider the previous pay structures and wage strategies for your business. Changes in your hospitality business’ expenses now compared to before the pandemic may impact your company’s budget. 

Previously allotted wage amounts for existing employees need to be adjusted based on these budget changes. Adjusting wages and/or providing more rewards or bonuses to ensure fair pay for your employees may be the best way to maintain a happy work team. By reevaluating your company’s salary history and financial needs, you can develop an effective compensation plan that is unique to your business.

Keep Communication About Salary Open 

Employers should consider the opinions of their workers when deciding on hospitality salary changes, to ensure that they are content with their job compensation. Keep communication open with your employees when setting wages. To ensure communication lines are open, let your staff know that they can access information from you regarding wages and that you will address any concerns regarding compensation that may arise.

Don’t Forget to Include the Rest of the Compensation Package

There are many important factors to consider when setting new wages and salaries for your employees. Employee benefits like sick days and PTOI can influence workers who are deciding on whether to apply for a job. Benefits like these can be included in compensation packages for your employees, which can help to attract job candidates to further their careers with the positions you are offering.

Use a Salary Calculator or Formula

When trying to pinpoint the best salary ranges for your employees, you should consider their role, as well as the cost of living based on the area in which they work. Salary calculators may be helpful when taking all these factors into account. 

A salary calculating formula should take the median salary level that workers receive for the role based on industry standards and apply it to the cost of living in the job’s location. This will give you a formula-based salary. To help you with this process, an online cost of living calculator may be used to determine the cost of living for a specific location.

Be Flexible with the Salary or Wage You Choose

Once you have settled on an ideal amount to pay your worker, you should still try to maintain flexibility when hiring employees. Pay amounts are a large deciding factor for workers who are considering whether to take a position, and you wouldn’t want to lose out on a great candidate. Try to maintain some wiggle-room for negotiating wages, to help you secure the best members for your team.

Continue to Expect the Unexpected in the Hospitality Industry

The pandemic may have changed what business looks like for the hospitality industry. However, with the right adjustment’s companies can bring on new staff members and maintain a happy thriving workforce. Wage and benefit changes can be helpful for businesses. 

The best wage changes for your company may be determined by considering your employee pay methods, the industry data, the current average pay for similar positions in the area, and your past pay structure. 

Don’t forget to maintain open communication with your current employees as well when deciding on the best compensation packages for the members of your team. For additional help with team recruitment, the Adia staffing agency can help. From restaurant management to hotel industry hiring, Adia can help with all your hospitality staffing needs. Visit the hospitality staffing page to contact Adia and receive assistance today.

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