Hospitality plays a big role in South Africa’s economy. And why not? We’re blessed with an abundance of natural beauty, after all. Unfortunately, the past few years have been tainted by fallout from the COVID pandemic. 

However, data shows that the industry is regaining its sheen, as tourist arrivals between 2022 and 2023 increased by a massive 48.9%. Not too shabby, right?

It gets better. Pundits believe revenues will reach R30 billion by 2029. Better still, job creation will go through the roof. Sort of.

Stick around as we analyse three key trends in the hospitality landscape. 

Trend 1: Workforce Complexity and Scarcity

Two primary factors impact hospitality’s workforce: Structural complexity in salaries and wages, and skills shortages.

Complexity of Hospitality Pay

The hospitality industry is unique when it comes to salaries, for example, it must recognise and account for tips. Other factors include:

  • Hourly rates vs. salaries: Most workers have hourly rates. It’s  when you get to management-level that monthly salaries emerge. 
  • Time management: Hourly rates require industry-specific payroll functions, like time-tracking. This is vital for happy employees and regulatory compliance. 
  • Non-standard compensation: Wages and salaries are affected by all sorts of factors, like shift patterns and night shift allowances. 

A downside of the hospitality industry is that profit margins can be quite tight, especially for small eating establishments and B&Bs. So, accurate payroll systems are essential to operations. 

Scarcity of Skills 

Hospitality suffers from ongoing skills shortages. While informal positions, like waitering, dish washing, and laundry have a constant supply of job-hopefuls, it’s the skilled positions that paddle in a shallow talent pool. 

  • Educational deficit: Many positions require only a basic education. Barring special circumstances, these employees aren’t typically corporate ladder bound. 
  • Career stagnation: The educational deficit limits professional progression. Some employees stay in a position for decades. This is frustrating and impacts growth potential. 

Paradoxically, education can be limiting because there is a disconnect between what’s taught and what’s needed. Basically, the curriculum is outdated and consistently fails to meet new  demands.

Trend 2: The Compliance Gauntlet

The industry is governed by strict regulations in primary areas, including labour practices. Because many workers are unskilled, and, let’s face it, desperate for work, they are often taken advantage of when it comes to matters like fair pay. 

Other red flag areas include:

  • Minimum wage: Owners must comply with minimum wage requirements and bargaining councils, like the Tearoom, Restaurant & Catering Bargaining Council.
  • Tip regulations: This comes as a surprise to many. Tips are taxable. Tips included in card transactions that pass through the business’s books must be declared and processed. 
  • Employment of foreign nationals: Some hotels and restaurants try to get away with low wages and unsafe working conditions when they employ foreigners. Aside from being utterly unethical, owners risk audits and penalties for non-compliance. 

Uninformed workers aren’t aware of their options, which include referrals to the CCMA. It’s a pity because more than 63% of referrals for unfair dismissals are awarded in favour of employees.

Trend 3: Technology as the Strategic Response

Technology might not be the answer to all these problems, but it sure eases the pressure on your operations. Which has the greatest impact? There are three highly impactful technologies. 

Automation for Seasonality & Efficiency

Hospitality ebbs and flows according to seasons, and it’s not just the weather. It includes wedding seasons and even birth seasons. (It’s true, March and May have the highest birth rates in SA.) What does the birth season have to do with hospitality? Think baby shower venues and final holidays before the baby comes.

The point: There are high and low staffing seasons. New onboarding and recruitment tools manage fluctuating demand, ensuring staff are hired quickly, and payroll is calculated accurately, even for exceedingly short-term employees.

Cloud-Based Centralisation & Compliance

Even the most optimistic rose-tinted-spectacle-wearers can’t say that COVID was a blessing in any form. But it did force industries to rethink their record keeping systems. And, it forced software providers to upgrade their solutions to cater to new demands. 

Cloud-based centralised platforms that keep HR and payroll functions in one place were the result. 

Two key benefits include:

  1. Data-driven decisions: Real-time data collection analyses performance and staffing trends so owners can make informed decisions for the next season. 
  2. Automated compliance: Thanks to automatic updates, cloud-based software keeps businesses compliant with regulations, like tax submissions.  

AI: The New Frontier for Profit

AI. Some people love it. Some hate it. Some people see benefits. Others see rising unemployment rates. Let’s focus on the good stuff, shall we?

  • Used properly,  AI tech can increase revenue by eliminating human error, improving customer satisfaction, and identifying opportunities ripe for optimization.
  • Customer satisfaction is improved by hyper-personalisation, which has the potential to increase bookings by up to 30%.
  • Opportunities include predictive maintenance which cuts costs by up to 37%.

What about unemployment? This can be curbed by upskilling. The obvious benefit? Reduced skills shortages.

Conclusion: Best Practices for Resilience

Technology is great. But it’s not everything. People aren’t everything either. You need a blend of tech and people for human-centric tech implementation. This includes:

  • Lead change management: Leaders must buy into new HR and payroll systems. How else will they convince employees that change will make their jobs easier?
  • Prioritise upskilling: Train employees to use new tools efficiently, saving time and improving productivity. Learning new skills increases earning potential. Perhaps more importantly, it also increases loyalty.
  • Compliance is continuous: Owners must be light on their feet to adapt to changes in labour laws and upgrade their systems for sustainable growth. Cloud-based software has you covered for these scenarios. 

What lessons can be gained from this factsheet?

Value your workforce. Take care of them and they’ll take care of you. Don’t fear technology. It can save your bacon when it comes to tax, payroll and HR compliance.