The Not So Great Resignation: Unseen Risks and Mitigation of Costs

A recent jobs report revealed 6.6 million jobs were created in the last year.  It’s a jaw-dropping number and the opportunities for employment are endless.  So where are the servers, the hotel housekeepers, and prep cooks? The situation is so dire we see signs in restaurant windows begging for patience and daily postings online from disgruntled workers, fairly complaining about being treated poorly by patrons after they could not do their job well, given the under-staffing at their place of employment.  

The hospitality industry took a massive hit in the height of the pandemic; while certainly not the only segment of our economy that got a smackdown, it seems the punches are never-ending.  While we see national economic recovery in numbers such as the aforementioned jobs report; yet, I’m still sitting here, waiting for my pizza.  The truth is, the wallop of forced closures was a mountain to climb; those that survived that challenge know the impact is far from over.  I am guilty of still fearing indoor dining and wanting to only eat outside and I am that person cleaning a hotel room with antiseptic wipes before touching anything; this is what the industry sees and hears daily.  The problem this article addresses is the trickle-down of the “great resignation.”

Employees who were in the hospitality industry were forced to look for other work when there was no active business or alternatively collect Reemployment Assistance Benefits, when combined with the Federal subsidies, actually paid better than the jobs they had left.  We now find ourselves desperate to find workers, corporations who can afford it are increasing wages as enticement, but yet, there still seems no incentive to go back to their pre-COVID job.  Those who figured out another path, a different career or a job in a different industry are seemingly unmotivated to go back to their previous work.  Whether the front desk staff took classes to rise to a manager’s level, the housekeepers found positions requiring less physical exertion, or the prep cook decided it was time for following his dream of culinary school, it was as though the employees upon whom we had relied, were off pursuing their dreams.  

There was also a fear of being too reliant on work in the hospitality industry that could again be devastated by a new strain of the virus shoving us all back into our homes yet again.  Regardless of how well a company had treated its staff, and no matter how much everyone felt like a work family, it is easy to see how and why the members of our workforces felt it was time to look after their own interests first.  Any allegiance to a former employer disappeared the day they were furloughed or laid off.  The laborers who had done a great job, earned recognition for being a team player, and even those on a path to promotion were left with nothing as a result of closures.  

It is so clear that COVID attacked our industry just as it did our lungs; it is widely known and often part of the public discourse.  Yet, those on the outside and looking in tend to be focused on not wanting to lose their favorite local haunt, or upset about the service no longer up to par.   Within the bubble though, we have started to see a disturbing trend, and after two decades of practicing workers’ compensation defense work for hospitality-based companies, things are looking quite grave from my vantage point.  There is no great fix; but, allow me to explain this often ignored ramification of the pandemic, and offer what little I can by way of advice to at least mitigate our risk.

We are operating in an industry wherein our employees are bouncing company to company with no dedication to the employers as they go.  Your average local patrons see new faces at their favorite places; in my world, I see an increase of workers’ compensation claims and a higher percentage of cases landing in litigation.  There are a few reasons:

• New employees often lack training; ill-equipped and inexperienced workers sustain more injuries trying to use machinery or tools with which they are not familiar.  A restaurant that fails to instruct the new members of its kitchen staff that knives are sent out weekly are more likely to see lacerations caused by the chef taking it upon him or herself to get that blade sharp.
• New managers jump in without being well educated on reporting or handling of claims.  When an injury is reported, if not called into HR and an employee is not immediately offered treatment or sent for drug testing, the claim value can blow up on day one.  Losing the opportunity to assert an intoxication defense can be catastrophic in costs.
• Injured workers have hostility against the companies that laid them off, regardless of the lack of alternative options, and pursuing prior injuries with a lawyer egging them on.  Anger spurs on litigation and a desire for retribution turns the former dream employee in the worst of our nightmares.
• New employees who get hurt have no incentive to not pursue litigation as they do not care about staying in the job when every other restaurant in the county is hiring.
• Money is short and claims are perceived as payoffs.

Companies within the hospitality zone cannot fix the core issue, which is a gross lack of workers wanting jobs in our industry.  Despite having our hands largely tied, better training and building bonds with employees that entice them to want to come back to work after an injury are the best tools at our disposal.  Incentives sometimes help to bring in help; but, there is still a long road ahead.  If we do not take the affirmative steps to avoid injuries and proper handling of injury reports, we are going to feel double teamed, fighting off punches coming from seemingly every direction.  As noted above, there is no one great secret or cure; however, providing better safety training and tools to our new hires is worth the time and the money.  

Schooling managers and supervisors on how to take a report of injury, explaining pass it up the chain of command, and offering nearly scripted discussions to be had with injured workers is imperative.  Believing everything we read about experience and training on one’s resume is foolish; do not assume having been a manager at a hotel in Tampa and will arm one with the tools needed to run a resort in the Keys.  Take the time, invest in your workforce, and remember the proper handling of an industrial injury is a core component of the new hire process. 

While the general public recognizes the financial hardship of a business and guests as one of the victims of the past two years, the back end of workplace accidents is adding a cost not so readily apparent.  Yet, it is hurting us in ways we will not even see until our next few insurance renewal cycles.  Exactly how this will affect future insurance rates remains to be seen; but, the concept of how mod rates are calculated inasmuch as the amount paid on claims is a core component, the costs of running a business just grow and grow.  The more litigation in which we are involved and the greater amounts of money we spend on the legal matters will never lead to anything good in the underwriting analyses.  

There is so much our patrons will never see or know about our businesses, and we all continue to do our best to offer our services with a smile.  If we fail to engage in the rudimentary steps of offering better training, engaging in additional monitoring, and building strong relationships with workers we will be spinning our wheels, watching our profits dwindle even further; as that is just not something most can afford, these steps are our best tools to chip away at future expense associated with industrial injuries.