The Hospitality Labor Report by The Staffing Agency reveals that, while the industry has reached unprecedented workforce levels, it faces significant challenges, including high turnover rates, wage stagnation, and reliance on immigrant labor. The report underscores the need for strategic workforce management and technological integration to address these issues effectively.
The Staffing Agency has released a comprehensive white paper, The Hospitality Labor Report, which provides an in-depth analysis of the current state of the hospitality industry. The report highlights a paradox: while the industry has achieved record workforce levels, it is simultaneously grappling with severe labor market fragility. This article delves into the report’s findings, exploring key issues such as high turnover rates, wage trends, the role of immigrant labor, and the impact of technology on workforce management.
Record Workforce Levels Amidst High Turnover
The hospitality industry is experiencing an unprecedented workforce, yet it is plagued by high turnover. According to the report, annual turnover in restaurants and hotels ranges from 70 to 80 percent, with Quick Service Restaurant (QSR) roles often exceeding 100 percent. This turnover crisis has become a critical factor affecting service quality, as recruitment timelines have slowed and retention has emerged as the primary driver of success.
Wage Trends and Stabilization
Between 2020 and early 2025, average wages in the hospitality sector rose sharply from $16.84 to $22.70. This increase represents one of the most significant wage hikes in recent labor history. However, the report notes that wages have since stabilized, marking a new permanent baseline for compensation. This stabilization is described as a “reset,” indicating a shift in the industry’s compensation landscape.
Las Vegas: A Test Case for Unionized Hospitality
Las Vegas has become a focal point for unionized hospitality, reshaping the national conversation on service work. Every major resort on the Strip now operates under a union contract, with new agreements projecting a 32 percent wage increase by 2030. The report identifies Las Vegas as a critical test case for the future of service work, highlighting predictable staffing, standardized wage progression, and narrowing the gap between frontline and management conditions.
Immigrant Labor: The Backbone of the Industry
The report emphasizes the crucial role of immigrant labor in the hospitality industry. It states that the American hospitality sector is more reliant on immigrant labor than any other sector of the economy. One in three hospitality workers in the United States is foreign-born, with even higher proportions in cities like New York, Miami, and Los Angeles. Essential roles, such as housekeeping and kitchen prep, depend heavily on a steady flow of immigrant workers. However, new visa limits, increased fees, and slower processing times are creating immediate pressure points for operators.
Technology as a Workforce Multiplier
Technology is increasingly seen as a multiplier rather than a replacement in the hospitality sector. The report finds that operators who integrate technology with robust hiring, training, and retention strategies outperform those focusing solely on headcount recovery. Effective use of technology includes systems for onboarding, scheduling, cross-training, and internal mobility, all of which contribute to a more efficient and stable workforce.
Strategic Workforce Management
The Staffing Agency’s report calls for a rethinking of what it means to be fully staffed in the hospitality industry. It identifies this moment as a turning point, where companies that view labor as a strategic asset rather than a cost center will emerge as winners. Building stable teams, fostering a strong workplace culture, and investing in long-term career paths are essential strategies for addressing persistent turnover and rising costs. The report concludes that the challenge ahead is not merely rebuilding the workforce but redefining it to meet new expectations, technological advancements, and evolving labor realities.
Conclusion
The Hospitality Labor Report provides a critical analysis of the current challenges and opportunities facing the hospitality industry. With record workforce levels juxtaposed against high turnover rates, wage stabilization, and a reliance on immigrant labor, the industry must adopt strategic workforce management practices and embrace technology to thrive in the coming years.
Download The Hospitality Labor Report.
