Amazon Staffing: What hotels need to know about the $15 wage

Amazon announced that it is raising its in-house minimum wage to $15 per hour.  The news made big headlines and has caused considerable anxiety throughout retail, food service, and various manufacturing industries.  But what does it mean for the hospitality industry in terms of raises in hospitality payrates?   Here are five things to consider looking ahead to the era of $15 Amazon payrates.

It Reflects A Larger Trend

Amazon’s wage hike make seem dramatic, but it’s actually in line with wage increases across many sectors. While wages vary from state to state and city to city, there has been an upward trend in competition for lower wage employees across all sectors.  It is not uncommon for hotel housekeeping jobs to pay close to the $15 an hour wage depending on experience, tenure at the hotel, and location. In fact the biggest increases in pay within the US have been at the lower 10% of the pay spectrum.  Amazon’s bold move isn’t actually driving a trend; it’s following something much larger.

​Pay Isn’t The Only Consideration for Employees

Hospitality has a lot of offer employees beyond hourly wage.  Working environment, flexibility in scheduling and familiarity with the industry are all hallmarks of why employees are loyal to the industry.  Finding ways to further enhance these factors such as providing meals, flexibility in scheduling and a friendly family-like atmosphere are all factors that employees consider beyond hourly pay.

But Pay Is The Big Consideration

While other factors be important, pay, is of course, a major factor for an employee.  Using research to find out what payrates are in your area is essential.  For example, HSS provides payrate research to its clients to help determine wages.  This research looks at the entire spectrum of pay to determine a realistic wage for the geography.

To Raise Or Not To Raise?  Know There Is Cost Either Way

Raising payrates to compete with Amazon is an individual choice.  But there is probably a cost either way.  Pay more per hour is simple to determine, however not paying more may result in higher turnover, more training and recruiting costs, more overtime, and less quality.  Balancing those costs against paying more per hour is a consideration Amazon made.  These factors should inform your decision too.

No one can tell what the long-term impact of Amazon’s decision will be.  But for the hospitality industry, the news is only part of a larger trend in rising wages.  Getting ahead of the curve when it comes to wages is necessary if Amazon is a factor or not.  HSS works with its clients to determine competitive wages while at the same time saving clients’ money on employment costs such as taxes, administrative costs, recruiting time and money, and turnover.