Walk by any business establishment in Savannah and you’re almost guaranteed to see a sign of the times: Placards that read either “Help Wanted” or announcing limited operating hours due to a worker shortage. Some storefronts feature both.
More than a year has passed since the COVID-19 pandemic decimated jobs, and businesses continue to struggle to fill open positions as the demand for services outpaces the supply of labor.
“Just about everyone on Highway 80, you’re going to see a ‘Now Hiring’ sign. Burger King, Wendy’s, the Hardee’s — they’re all closing early,” said Andrea Davis, an assistant manager at Gate Petroleum in Pooler.
The lingering labor shortage for operators of restaurants and other hospitality industry businesses runs contrary to what other sectors have experienced this year. Savannah’s regional economy has recovered to about 99% of its pre-pandemic levels, says Michael Toma, professor of economics at Georgia Southern University. Georgia, the first state to reopen following the initial COVID-19 surge last spring, has seen a 97% recovery rate.
Savannah’s leisure and hospitality industry remains 2,000 employees below pre-COVID levels, when 25,800 locals worked in bars, restaurants, hotels, tour companies and other related businesses.
A closer look at the local labor market reports hints at where those workers have gone: Sectors such as logistics and professional and business services have actually gained employees. Logistics has seen a 10% increase while professional and business services has had a 20% increase.
“It does imply that there’s been a restructuring because hospitality and tourism is still at 92% (of pre-pandemic levels),” Toma said.
Various industries still feel the pinch
Savannah’s strong recovery means many sectors, not just leisure and hospitality, are feeling the pain of a staff stretched thin.
“Our economy has grown in many ways beyond what the local pool, and the pool that has moved in, is supporting,” said Michael Owens, president of the Tourism Leadership Council.
Jalisa Johnson, who works at a logistics warehouse in Port Wentworth, says people are constantly coming and going at her job.
“I see people work two to three weeks and then leave; they find something else,” she said, “Some people find another job, some depend on unemployment.”
And when she clocks out of her night shift, she says she can’t find a place to eat.
“McDonald’s, Wendy’s, even the Parker’s in Garden City, they don’t even stay open anymore,” said Johnson. “There’s a lot of places that are 24 hours that aren’t even 24 hours anymore.”
For Davis, the employee at Gate Petroleum, that’s true — due to a lack of staff, the 24/7 gas station had to reduce its hours to 5 a.m. to 11 p.m., but the existing staff are still working overtime.
“When you’re on that sixth day and you’ve been working 10- to 12-hour shifts, you’re just tired, you know, it really sucks,” said Davis.
As assistant manager, Davis has hired about 11 employees over the past six months, but none of them stayed for more than two weeks even with increased base pay and referral bonuses.
“The turnover rate has never been this bad,” she said. “Right now, it’s been kind of a nightmare and it doesn’t seem like it’s going to end any time soon,”
Workers opt for better pay and convenience
The labor market may be seeing a migration from lower-wage jobs in the hospitality industry to sectors such as logistics and business and professional services for several different reasons, but the most obvious is often higher pay and better benefits.
Former Hilton Hotel employee Krista Lynn Van Over said she went on unemployment right when the pandemic hit but wasn’t receiving the unemployment insurance in time, so she looked for a job she could do from home.
She found one working as a Quality Assurance agent for an IT service management company.
“I make $15 per hour with zero commute, while at the management level (at the Hilton), I was making like $13.50,” said Van Over, “It’s just better all around.”
Van Over said she had been in the hospitality industry for over a decade but doesn’t see herself going back because of stability and work environment reasons.
Like Van Over, Donna Ralphs was also forced out of her job into something more remote and online when the pandemic started. Ralphs, who used to work as a bartender, now does mortgage processing for a start-up company.
“The mortgage job has me tied to my chair and computer non-stop,” said Ralphs, who says she actually wants to switch back to her old industry.
However, she says the physical strain of bartending and scheduling conflicts are preventing her from jumping back in. She injured her knees during a bar shift several years ago.
“Getting back into office work was the smart thing to do at some point, but COVID forced me to much sooner than I wanted to,” she said.
Doa Habbab, an employment specialist with nonprofit Inspiritus who works with refugees and special immigrant visa holders (SIVs) in the Savannah area, said many of her clients switched from working in restaurants to warehouses when their hospitality partners shut down due to COVID-19.
“The pandemic played a huge role in moving people from hospitality to logistics because the warehouses were still functioning,” said Habbab.
Habbab said her clients will often move from restaurant and hotel jobs to logistics after they’ve adjusted to their new home — citing a need for more stability and language barriers as major reasons the people she works with stay put — but the situation the pandemic created moved the course along much faster, she said.
“And the high pay rate really helps,” said Habbab. “Even if you’re not exactly happy with your job, you see, ‘Oh, I’m making more money than in the other industry’, that makes them think ‘Oh, I can help my family more’.”
Nowadays, she says her phone is ringing off the hook as job partners are in need of more workers than ever in the midst of the labor shortage.
The labor market holds unknowns
Although current employment numbers are showing one thing, experts and sector leaders say it’s still preliminary.
“There’s really no question at this point that our industry, tourism and hospitality, was more than twice as impacted as any other industry,” said Owens.
At it’s lowest during the pandemic, the hospitality and leisure sector dropped 48% to 14,000 workers. Professional and business services dropped 11% and logistics decreased 9%, according to state and federal labor reports.
“A lagging indicator for us as we’re still trying to recover comes as no surprise to me,” said Owens, who notes Savannah is making a fast return already.
“Our employment rate is only about a half-percent higher than it was (pre-pandemic) and that’s consistently been trending down for months,” said Toma.
The quality of the jobs in the hospitality sector may also be seeing an improvement, which could equalize the market, once again.
“A guaranteed 40 hours-per-week environment is more characteristic of logistics,” said Toma, “But the seasonality in our hospitality industry has been reduced over the years because of very active promotion and marketing.”
Wages have also never been higher in every sector, said Owens, as employers try to attract workers.
“In the retail trade in the Savannah area, retailers effectively would have to pay roughly around $17 per hour to attract people off the bench,” said Toma, “Retailers would need to offer a wage that is more consistent with somebody who has had five or more years of experience to entry-level workers.”
Whether it’s higher-wage jobs or lower-wage jobs, experts say labor has more negotiating power than it has had for years.
“It’s creating new opportunities for people to enter the labor market,” said Toma.
Nancy Guan is the general assignment reporter covering Chatham County municipalities. Reach her at [email protected] or on Twitter @nancyguann.