How to Succeed Despite the Labour Shortage

Updated on April 26, 2023

The labour shortage has been particularly severe in the tourism industry, an important segment of our economy. What can be done to address this challenge—which will not go away in the short term—and what are the solutions for your organization?

Québec’s tourism industry has seen strong growth. It represents $14 billion in revenues and around 400,000 direct and indirect jobs at 30,000 different businesses.

However, this growth is hampered by a lack of workers. The labour shortage has been a challenge for several years now for a number of reasons, including a lack of interest in low-paying jobs, difficult work conditions and the ageing of the population. The pandemic seems to have aggravated these problems.

To keep your business viable over the next few years, you will need to consider a transformation of your business model.

How to adjust your business model

Of course, there are medium and long-term solutions that can solve part of the problem: for example, investing in automation or recruiting internationally.

In the shorter term, SMEs in the tourism industry can expand their pool of potential employees by encouraging seniors to stay at work or return from retirement and they can take advantage of wage subsidy programs to integrate youth and people with disabilities.

However, this won’t be enough for many businesses and you will need to find personalized solutions.

To help yourself find the solution that works best for you, start by evaluating your current situation and answering some key questions: What is your objective? What will your value proposition be? Which partner can help you deliver it? Here are some key things to consider when adapting your business model to the new reality.

Enhance the customer experience, one element at a time

Your customers are at the heart of your business. To maintain an optimal customer experience despite the labour shortage, you first need to identify your touchpoints before, during and after the interaction with the consumer. Then you can find ways to address problem areas, one aspect at a time. Here are some potential solutions:

Pay attention to the employee experience

The same approach applies to points of contact with your employees. So how do you attract employees and make them want to stay?

Integrate digital solutions

Automation gets talked about a lot, and it’s important, but it should not come at the expense of the customer experience. People are central when it comes to creating meaningful relationships and interactions in the tourism industry.

You will need to be smart about the way you integrate technology so you can tackle the labour shortage while improving productivity and reducing time spent on repetitive tasks so your employees can spend more time with clients. Consider getting training for yourself and your employees on using digital inventory, transaction and scheduling tools. Choose digital tools that are user-friendly and will appeal to the younger generation (and to everyone in general!).

Adopt a less labour-reliant business model

Does a company really need to constantly grow and increase its revenues? “Small is beautiful” might just become the new watchword in the tourism industry. The key is to identify your target clientele (the main source for your profitability) and concentrate your efforts there.

For example, if you’re a restaurant owner, you might opt to ditch lunch and focus on dinner, or position yourself as a neighbourhood eatery that’s open on weekdays and closed on weekends. Or if you’re a hotel owner, you could choose to focus on business clientele so you don’t have to stay open seven days a week.

Maintaining the status quo is impossible. Owners and employees of tourism SMEs are already exhausted. The situation is not sustainable in the long term. The end goal is not to be open as long as possible. It is to offer a great customer experience and a great employee experience while respecting sustainable development best practices.

The sector must work together

Tourism organizations need to rethink their marketing strategies, target audiences and offers so they can meet the needs of SMEs and ensure a sustainable recovery. They have to promote teamwork and the sharing of resources from here and elsewhere in order to boost creativity and generate new ideas.

It is all well and good to spend money to promote a region, but you have to make sure that local hotels and businesses have the capacity to receive tourists. It would be more effective, for example, to encourage them to travel to less visited regions or come to you during low season, and to cut down on content and advertising for sites that are already very popular.

Develop local partnerships to boost your region’s visibility and appeal. Include cultural activities, explorations and educational experiences in your offer. The creativity of service providers plays an important role in tourists’ choices and allows businesses to diversify their offer and better manage tourist flows.

The circular economy is an interesting trend to promote. For example, you might consider promotional tie-ins or cross-selling with a partner that has a complementary service offer. This economic model has been gaining popularity because it allows businesses to share human and material resources, preventing losses and enhancing efficiency.

So where do you start? Before all else, you need to produce a detailed assessment of your organization and its environment. A good diagnosis will help you reframe your business model, prepare an action plan and prioritize actions based on your timeline and your situation.