Australia’s hospitality labor shortage at crisis levels

Australia’s hospitality and gaming industry is suffering from a labor shortage, which has been described as having hit “crisis” levels.

In 2020, the Covid-19 pandemic forced many long-serving employees in the industry to find alternative avenues of employment. And whilst the country’s economic recovery has bounced back, those that previously worked in the gaming and hospitality industry are reluctant to return.

“Many of the club CEOs and GMs that I speak with are saying that both front and back of house hospitality labor are now very tight,” said Geoff Wohlsen, a gaming industry consultant who has been dealing with this issue.

“I spoke with one manager who contacted over 20 applicants for a simple interview and only 3 turned up. I was talking with a manager of a large club in Sydney the other day who advertised and didn’t get one response. It’s even worse for chefs and kitchen cooking staff,” he added.

Wohlsen was referring to a growing trend in which hospitality workers have been hesitant to return to the industry in fear of another black swan event.

“It seems that since hospitality workers were most impacted during Covid that now potential employees are saying “if I go back to hospitality I could lose my job the minute there’s another shutdown. It’s not clear where the former hospitality workers have been redeployed either.”

Jeffrey Williams, CEO of hospitality-focused job-seeking platform Barcats said the issue has been compounded by the fact that migrant workers have not been allowed to return to the country due to travel restrictions.

Pre-Covid, there were around 1.1 million migrant workers in the country, with a large portion of these employed in the hospitality sector.

“Collectively, there’s about a quarter of [hospitality] staff that are no longer available, and that’s basically the gap that we’re now seeing.”

Staffing shortage and availability of skilled labor are key concerns in many jurisdictions around Asia. Macau in particular has suffered even pre-Covid due to restrictions on imported labor, where for example all dealer positions are reserved for locals.

However, experts believe the issue within Australia’s hospitality sector runs far deeper than that. The industry has had a long-brewing issue with attracting and retaining staff.

Sudhir Kale, a gaming industry consultant said the pandemic has brought to the fore what has been a perennial issue in terms of priorities for hospitality workers.

“Most Gen Ys and Gen Zs want to transition to a new role within six months, want bigger and better things, and get frustrated when this does not happen immediately. The pandemic made them realize the joys of not working in a 24/7 environment where they could spend time with their families, and now they do not want to make trade-offs by going back to the hospitality environment,” he said, drawing from recent conversations he’s had with club CEOs.

“The hospitality industry has always been regarded as the place to work while a person was waiting to get a “real” job,” adds Leigh Barrett of Leigh Barrett and Associates.

“Firstly, the wages and employment conditions across the hospitality industry generally have historically not been such to attract and retain employees, resulting in high staff turnover.”

Barrett, drawing from his strong background in social work, said it was also common for (especially young) hospitality industry staff to be exposed to, or be the victims of harassment and/or bullying by other staff or patrons.

This notion becomes more apparent as already pre-Covid, around 64 percent of workers interviewed by Barcats was found to be suffering from some form of anxiety, whether it be a shortage of shifts, working nights, sporadic working hours, fair pay, and working conditions.

“During Covid, this spiked to 92 percent,” added Williams.

It’s an industry that has traditionally not given a lot of comfort or security to those in the workplace.

To combat this, Williams said that his company has done a lot of work with young people, specifically getting them more excited about hospitality as a career path.

Some venue managers have opted to instead target a different working demographic to fill the hole left by unenthused youth and non-existent foreign workers.

“In our space we’re starting to view the employment landscape as ‘coming full circle’ back around to the supply and demand of hiring mature aged workers with life experience, as they are available and ready to work,” said Morgan Stewart, CEO of Blacktown Workers Club.

“This was a subtle and emerging shift in employee supply & demographics prior to Covid, but certainly post-Covid has steered strongly towards the growing pool of available ‘baby boomers’ vs a shrinking pool of Gen Y/Millennials making a variety of choices in our space currently for example.”

Williams added that his company has also been working with the federal government to attract mature aged workers back into the industry, through its Job Ready program, which aims at bringing back into the hospitality industry by teaching them the necessary skills and giving them the necessary licenses to work in bars and restaurants.

One other solution is for venue managers to take a more proactive approach in retaining staff.

“In the long-term, clubs will have to pay greater attention to employee well-being, employee satisfaction, and employee engagement. To this day, most clubs do not have a formal employee value proposition (EVP). This will have to change,” said Kale.

“Clubs need to create a structure where employee counseling, health, and well-being issues are dealt with on a regular basis. Engagement happens when staff can bring their whole self to work, which currently is not the case with most clubs in Australia. In the words of one CEO, the problems are largely caused by bad systems and bad management, issues that have been brought in the open by COVID-19.”

Barrett said that employers should think about higher pay for staff and developing career opportunities for staff in hospitality.

“Now is the time for the industry to look to reshape what it provides and how it provides it.”


Tune in next Tuesday for a special podcast between AGB’s Felix Ng and Jeffrey Williams of Barcats, where we dive deeper into the labor shortage issue affecting Australia’s gaming industry.