Pay rises, perks expand as hospitality fights to keep staff

Leisure and hospitality have fully rebounded from pandemic employment losses — but hotels and restaurants still face serious challenges filling roles and keeping staff. Strategic shifts in pay, perks, and management are proving essential.

“Recovery complete — but the battle’s not over”

A report by Auguste Escoffier School of Culinary Arts found that leisure and hospitality employment in the US has now surpassed its pre-pandemic peak. According to the Federal Reserve Bank of St. Louis, jobs in this sector reached 16.99 million by April 2025 — up from 16.89 million in February 2020.

Still, recovery has been uneven. Hotel jobs remain about 10% below their pre-pandemic levels, while restaurant employment is 0.3% above.

Persistent shortages in key roles

Most hotels (65%) report they are still short of staff, even after raising wages and enhancing perks — an improvement from 76% the previous year. Meanwhile, 9% of hotels considered themselves severely understaffed at the end of 2024.

In restaurants, 59% of operators say they have roles that are hard to fill — down from 70% in 2023. The hardest positions to recruit are cooks/chefs (59%), managers and kitchen support (both 54%), and front-of-house/customer service (52%).

High turnover remains the norm

Turnover in hospitality remains high. Quit rates peaked at 5.8% during 2021-22, then eased to 3.9% in 2024 — still the highest of any US sector. In 2019, the rate was 4.9%.

Between January and April 2024, almost 3 million hospitality workers quit, 204% of the national average. But hiring is keeping pace: around 1.05 million were hired in January 2024 versus 781,000 quits.

What’s fueling turnover — and what’s changing

Burnout, inflexible schedules, low pay, and limited career progression are still major reasons staff leave. Younger workers are especially likely to view hospitality as temporary. Yet they also make up a big share of the workforce: 39.6% of restaurant workers are under 25, and 60% under 35 — compared to just 12.9% and 35% respectively across all industries.

Expectations are shifting. A survey by SHRM found 22% of Baby Boomers consider workplace culture important to stay in a role; that jumps to 39% among Millennials and Gen Z.

Adapting hiring & retention strategies

Restaurants and hotels are adopting new tactics. About 37% of restaurant operators plan to use automated hiring or labour-management systems. Text-to-apply adverts, AI in applicant tracking, and mobile-friendly applications are also on the rise.

Wage growth has been strong: new-hire pay in the sector rose by 38% from 2018 to 2024, the largest growth of any industry. Median restaurant hourly pay increased from ~$11 in early 2021 to about $15 in late 2023.

Perks beyond pay are being rolled out: tuition reimbursement, travel discounts, more predictable scheduling. Structured onboarding is becoming standard — operators see the first 30-90 days as critical for retaining staff. Clear advancement paths help retain 60-70% of employees long-term.

The quality of management matters too. Employees want better communication (58%), recognition (49%), empathy (41%), less micromanagement (39%), and transparency (38%).

What this means for the drinks trade

While the report centres on restaurants and hotels, many lessons apply directly to the drinks sector — bars, breweries, distilleries, and tasting rooms. Where staff shortages, high turnover and rising wage demands are also pressing issues, adopting more employee-friendly policies could offer a competitive edge.

Operators who offer clear paths to progression, better scheduling, and invest in manager training may gain the advantage in attracting and retaining the people behind the drinks.

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