By Doug Ramsthel
Last year, the pandemic put a chokehold on travel. Flights were cancelled, hotel rooms sat empty, and even if guests were checking in, they were staying isolated in their rooms. Now, people cannot wait to visit a new destination or a tried-and-true favorite. But the industry faces new challenges. Instead of a traveler shortage there is an employee shortage. To remain competitive, hotels and other hospitality businesses are having to up the ante with wage increases, improved benefits for salary employees and in some cases the extension of benefits to part-time hourly workers as well.
A lot of industries have been able to offer employees a hybrid working arrangement as a perk, where employees can work remotely, some or all the time. However, the hospitality industry does not lend itself to remote working, as most hotel staff need to be on-site to deliver the guest experience. Add to this the increased expectations of guests, having not travelled for most of the pandemic, and it is a very challenging environment for employers in the hospitality industry.
One of the biggest changes in benefits for employees at hotel chains is employers recognizing the need to support the well-being of employee’s mental health. More companies are expanding mental health resources and creating programs to remove stigmas and give employees greater access. The pandemic has caused a significant increase in mental health challenges, and some hotel workers are still dealing with the impact it had on them. According to the CDC 11% of adults reported symptoms of anxiety and depression between January and June of 2019. In December of 2020 that number had grown to 42%. Some of the most popular mental health benefits companies are offering include:
- Access to free counseling sessions or reduced copays for in-network therapy
- Subscriptions to virtual counseling service apps
- Subscriptions to wellness apps for meditation, stress reduction, and improved sleep
For hourly workers, wage rate increases are one of the most common outcomes of the pandemic. As restaurants and other hourly jobs raise pay to $15 an hour or more, hotels will have to follow the trend to remain competitive when hiring and retaining existing employees. Having healthcare coverage and sick leave should they become ill with Covid, especially as variant spread increases, is another priority for employees and something hotel management should consider.
Hotels should also expect to see an increased demand from employees for benefits that extend to family members. Many working adults had to become caregivers during the pandemic for their elderly parents, and full-time educators and entertainers for their children. They will want to make sure that they have options for caregiver support in terms of daycare, health aids, etc. Another outcome of the pandemic will be more parents choosing to stay home, either to be a caregiver full-time or to run their own business, resulting in an increase in spousal enrollment in company plans.
Expanding employee benefits to part time workers is something employers are now considering luring employees back to work. For many employers, the gateway into offering benefits to part-time employees has centered around medical plans. And while ACA requires full-time employees to be offered a medical plan that is deemed affordable, it does not require employers to offer medical benefits to part time employees (those working on average under 30 hours per week).
However, offering an ACA “affordable” plan to part-time employees can hurt them financially. For a lot of part-time employees, their household income will fall into a range that allows them to qualify for a subsidy for health insurance on the ACA exchange, so they can get low cost or even free health insurance. If they are offered affordable coverage through their employer, they are no longer eligible for any subsidy on the exchange, even if they do not take the employer offered coverage. As a consequence, a part-time employee can see their family coverage go from very little cost with a subsidy to a 4x to 5x per month increase for their employer plan that is offered to them. What is intended to be an employee benefit will backfire.
Instead of offering medical benefits to employees, employers should consider offering other benefits that will not affect their exchange subsidies. This can include slimmed down medical plans, that don’t qualify for ACA, as well as dental, vision, or voluntary benefits. Companies should look to perks first, discount programs, company swag, extra time off. Then progressively consider voluntary benefits, and more traditional dental and vision, if necessary, to sweeten the attraction pull for new employees.
The full impact of the pandemic on the hotel industry is still unknown. It is an evolving situation and as a result, hotels must remain nimble and flexible, able to react as new challenges develop. As open enrollment season approaches, one of those challenges will be navigating the new normal of employee benefits. For the first time, enrollment could include part-time employees. This will require HR departments and management to have plans in place to provide guidance, education, and answer questions for more employees than ever before. Planning and developing solutions like online webinars and pre-enrollment meetings to go over enrollment information in segments instead of all at once will help streamline the process.
