High housing costs, stress, COVID and a shortage of child care options are among the factors causing workers in Montana’s service and hospitality industry to leave their jobs in droves, according to University of Montana researchers.
Among those who left that industry during the pandemic and didn’t return to the workforce, nearly 17% cited mental health and stress as the reason they stayed away. That’s per a recent report from the Institute for Tourism and Recreation Research at UM.
The study also found that women in Montana were far more likely than men to report leaving their job in the service industry during the pandemic.
Researchers surveyed a total of 4,820 Montana residents this past winter about several aspects of their current and past work status. When asked if they had left a job in the service/hospitality industry at any point since the beginning of COVID, 54% of women responded that they had, compared with 35% of men. Women were also more likely to report employment in the service/hospitality industry than men, 40% to 24% respectively.
Some respondents who reported quitting may have returned to their same employer or a new employer within the same industry, but the survey aimed to capture the upheaval in the tourism industry in the state.
“Results from this survey indicate that the service and hospitality industry of Montana experienced greater turnover within their ranks when compared to other industries,” wrote the study’s authors, Carter Bermingham, Matthew Pettigrew, Megan Schultz and Josh Martin.
In fact, they say the hospitality industry in Montana has experienced 20%-25% more turnover than the average of all other industries.
The study was one of a series designed to understand the impact the pandemic has had on business owners, managers and employees in the world of tourism and outdoor recreation. Business is booming in the hospitality sector even as the labor shortage persists.
“Few states have been fortunate enough to recover their tourism industry as quickly as Montana,” the authors wrote.
In a recent survey of more than 300 tourism-related businesses, respondents indicated their customer and sales volumes were up 18% in 2020 and 21% in 2022, compared with 2019.
“Though some job recovery has occurred, many businesses still report challenges with hiring employees and maintaining staff at sufficient levels to support pre-pandemic levels of operation, with all of this occurring with increased visitation and demand,” the authors wrote.
“The reason we chose to do this study is we kept hearing a lot about worker shortages,” Pettigrew explained. “We heard a lot of mixed reasons for that. We are seeing a lot of cost pinches with the cost of living.”
They didn’t really dive into housing prices in the study, but Pettigrew and his co-authors are sure that housing prices are a huge factor.
“A lot of it is just people not being able to afford the cost of living generally, and that’s what is getting reported to us from around the state by (convention and visitors bureaus),” he said.
Pettigrew said the labor shortage is a big deal in Montana, including for many small business owners.
“There are certain sectors that aren’t doing that well right now,” he said. “It’s affecting some of our communities.”
Carter Bermingham, another of the study’s authors, also said he believes high housing costs are part of why so many can’t stay in these jobs.
“It’s a big piece of that,” he said. “A lot of that is related to housing costs. It’s tough to get people to work a job for $11 or $12 an hour while they’re paying $1,200 to $1,500 a month in rent. The economics of that aren’t adding up.”
Why they left
Of those who left the service industry, most workers did so voluntarily. In western Montana, about 48% of workers chose to leave their service jobs, and another 44% were furloughed. Only 8% were let go from the job. About 11% of workers retired after leaving their job.
Respondents who said they chose not to return to work or who were still looking for work were asked why they’ve not yet returned to the workforce. Overall, 18% indicated they there were too few options available for the type of work they looking for.
Another 18% of respondents explained that concerns about COVID in the workplace was a reason they haven’t returned.
“When comparing men and women, men were more likely to indicate there were too few options for them (25% vs. 14%, respectively), while wages seemed to be more relevant to male participants (13% vs. 4%),” the study states. “Conversely, women were more likely to cite COVID health safety in the workplace (22% vs. 12%) and slightly more likely to cite childcare (e.g., access to, quality of, cost).”
Grant Kier, the president and CEO of the Missoula Economic Partnership, said the data in the report validates what they are hearing from local businesses who are experiencing extraordinary demand but are struggling to meet it for lack of available workforce.
“The report summarizes trends experienced by nearly every sector, but the data and the feedback we receive indicate the service and hospitality sectors are worst hit locally,” he explained. “The impacts look like longer waits for services, reduced hours or days business are open, senior employees and business owners filling gaps in schedules, and in the worst cases business closing.”
He said that right now, the businesses that seem best able to compete for workers, regardless of sector, are those able to offer higher pay and better benefits, a safe and healthy environment, increased flexibility and child care options and professional development opportunities.
“It’s also important to realize that service and hospitality businesses aren’t just for tourists and solving this challenge isn’t just for business owners,” Kier noted. “Many of the small businesses local residents enjoy rely on tourism to get them through the quiet months when only locals are using their services.”
Kier believes Missoula needs to address the affordable housing crisis to help businesses keep employees.
“If we care about the many small businesses that define our communities, there are indirect ways we can support all of them, like staying focused on ensuring we have an adequate supply of homes that service and hospitality industry employees can afford and continuing to invest in the greatest asset we have to develop a healthy workforce, the University of Montana,” he said.