Toxic Workplaces are Crippling the Hospitality Industry. What’s a Leader to Do? Read On…

Toxic Workplaces are Crippling the Hospitality Industry. What’s a Leader To Do? Read On…

Tales of worker scarcity have skyrocketed in many industries since the beginning of the year. The issue is now heating up in the food and hospitality business, as more people are vaccinated and opting to dine out.

According to the U.S. National Restaurant Association, the industry lost two-and-a-half million workers. While some blame generous-beyond-belief unemployment benefits, restaurant owners and workers point to low wages and toxic workplace cultures.

Patrick Whalen is the owner and chief executive officer of North Carolina-based 5th Street Group, which operates a handful of highly acclaimed eateries in the Southeast. “The restaurant business, inherently and pre-COVID, was a toxic workplace. You had an enormous wage gap between the back of the house and front of the house, rampant alcohol and drug problems, harassment issues, and people living in or near poverty working hourly jobs with no guarantees. When the industry collapsed, the pandemic merely amplified the pre-existing conditions,” Whalen says.

Toxic Workplaces are Crippling the Hospitality Industry. What’s a Leader To Do? Read On…

Leaders in the industry are hopeful that removing states from the extended unemployment benefits lifeline will help push more people back into the workforce. However, this does nothing to solve the toxic workplace issues that are alive and well in the hospitality industry. Instead of relying on hope – because it is not a strategy – leaders must commit to getting their arms around their cultural issues. Employees will work for less money if the culture is amazing.

I repeat: Employees will work for less money if the culture is amazing.

One simple thing that can be done immediately to improve culture is recognition. We know from research that appropriate recognition fuels employees’ motivation, retention, productivity, morale, and engagement. In addition to inspiring employees to run on all cylinders and give you a lot of discretionary effort, consider these critical data points:

  • 90% of employees who received thanks or recognition from their boss report feeling high levels of trust in that individual. (Forbes)
  • 85% of employees are satisfied with a simple, “Thank you,” for their daily efforts and accomplishments. (Deloitte)
  • 69% of employees would work harder if they felt their efforts were better appreciated. (Socialcast)
  • 63% of appropriately recognized employees are highly unlikely to quit their jobs. (SurveyMonkey)
  • 58% of employees replied “give recognition” when asked what leaders could do more to improve engagement. (Vantage Circle)
  • 40% of employees state that receiving recognition more often would encourage them to do more work. (Harvard Business Review)

Toxic Workplaces are Crippling the Hospitality Industry. What’s a Leader To Do? Read On…

Although the case is clear for employee recognition, 82% of employed Americans – 63% globally – don’t feel that their supervisors recognize them enough for their contributions. And according to Bersin & Associates, 87% of recognition programs focus on tenure, which is not appropriate recognition, as it rewards quantity vs. quality. It is best to focus workplace compliments on professional qualities, such as someone’s attitude, skills, talents, values, qualities, or contributions.

According to the CEO of, Michael Levy, “More than 80% of recognition programs deployed are either poorly delivered or emphasize the wrong things. There are three common pitfalls that companies fall into.”

  1. The quality and execution of recognition programs are weak. Employees have been raised on high-end social media platforms, such as Facebook, Instagram, TikTok, Slack, and Microsoft Teams. To create comparably valued experiences, the program must be high-quality, contemporary, and automated vs. manual.
  2. Old-school paper-based processes don’t fit our modern world. Many companies still cling to outdated approaches for handling their recognition processes. Sending paper-based cards alone does not work in a global, digital, remote world. You need an online solution as well. While a hand-written note has great value, it shouldn’t be the core of your recognition solution. Leverage technology.
  3. Overemphasis on the value of monetary awards. While gift cards, points, and prizes have a valuable and important role to play, they must be built upon a foundation of non-monetary recognition. Layered programs with non-monetary, monetary, and symbolic recognition (i.e. public/formal accolades) elements have the biggest impact.

Toxic Workplaces are Crippling the Hospitality Industry. What’s a Leader To Do? Read On…

As Levy often says, inspired by some of Jack Welch’s principles of leadership, “Create an atmosphere and culture, where employees feel Proud of Their Work and Proud of Their Company, and they will be inspired to consistently give their best.”

Recognition inspires people to trust leaders, work harder, stay longer, be more engaged, have pride in your workplace, and do more work. And most importantly, a critical need that your people have – Recognition – will be fulfilled, which should make it easier to both attract and retain top food and hospitality talent.



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WorkProud is committed to helping its clients create a unified approach to the employee experience by helping them build cultures of workplace pride. Trusted by millions of users at some of the world’s most recognized employer brands, WorkProud delivers a comprehensive approach to building company cultures that inspire people to be Proud of their Work and Proud of their Company.

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