With over 7.6M unemployed already, how can schools help laid off food services, hospitality, and retail workers?

Expert Insight

With over 7.6M unemployed already, how can schools help laid off food services, hospitality, and retail workers?

The first U.S. COVID-19 case was reported in late February, and in mid-March state governments began issuing stay-at-home orders. Across this time, employers began freezing hiring, instituting furloughs, and laying off staff. While the total impact on our economy will take months to unfold, EAB is providing initial analyses for key fields to inform program planning conversations, and will update as we learn more.

The large population of unemployed food services, hospitality, and retail workers presents the opportunity to deliver programs aligned to sustainable, post-coronavirus careers regionally. Colleges and universities, however, must ensure students recognize the return on their educational investment despite today’s hard economic times. Programs must also align with available financial support (e.g., federal grants, state re-training funds) so increased enrollments are financially sustainable.  

Educating unemployed workers positions schools to do well while doing good

Amid existential concerns about how the novel coronavirus outbreak threatens their operations, university leaders are already asking us: what can we do for our community and its economic recovery? As a nation we’re facing the highest rate of unemployment and fastest monthly increase in unemployment since at least the late 1940s when the dataset begins. No community has escaped the impacts of the coronavirus outbreak and ensuing stay-at-home orders, though some have been hit harder than most (e.g., Las Vegas). The food service, hospitality, and retail sectors have been among the most devastated: 5.5M jobs were lost in April 2020 within food services and drinking places alone, with about 800K fewer jobs in hotels and accommodations. Another 2.1M jobs were lost in retail trade. Helping adults return to the workforce faster, and ideally on more viable career paths, is a valuable service colleges and universities can offer.

Educating unemployed adults also holds promise for the colleges and universities able to do so: with up to 20% of traditional-aged college students not enrolling as planned this fall, schools are searching for alternative populations and tuition revenue. Adult learners can’t be the only solution to college and university budget shortfalls, but they should be part of the conversation (EAB’s college finance resources are a good starting point for that conversation as well). Millions of Americans are out of work, and nearly 13M are unemployed with less than a bachelor’s-level credential.

What we know now: Food services, hospitality, and retail workers are at high-risk for jobs to not return, likely need to find new work post-pandemic

The novel coronavirus outbreak caused unprecedented unemployment, but food services, hospitality, and retail employment had already been waning. In recent years, organizations like the National Retail Federation launched re-training programs to prepare workers for new jobs spurred by dual pressures of:

  • Online retail’s growth at the expense of in-person retail, shifting jobs from customer service to warehousing and logistics, and
  • Automation, requiring fewer workers as robots or automation-supported processes (e.g., self-checkout) replaced staff.

The 2020 coronavirus outbreak was a dramatic jolt to an already shrinking workforce.

Workers have initially reported optimism they could return to jobs when stay-at-home orders ended, but the reality is much bleaker: researchers at Georgia State University found significant overlap between industries undercut by the outbreak and those a high risk for automation. The coronavirus likely accelerated that risk as well by increasing automation’s benefits. In addition to productivity gains, fewer human workers directly aligns with reduced virus transmission.

Professionals most at-risk for job loss now and in a fast-approaching, automated future typically received on-the-job training. Though often without formal educational credentials, these workers have developed skills both specific to their roles (e.g., restaurant operation) and transferable to new applications (e.g., customer satisfaction).

Skills specific to food services, hospitality, and retail roles requiring no postsecondary education

  • Merchandising (26% of relevant job postings in 2019)
  • Restaurant operations (17%)
  • Food safety (5%)
  • Food services (5%)
  • Loss prevention (5%)
  • Food preparation and cooking (3% each)
  • Restaurant management (2%)

Skills transferable from food services, hospitality, and retail roles requiring no postsecondary education

  • Customer service (41% of relevant job postings in 2019)
  • Sales (39%)
  • Communications (28%)
  • Management (24%)
  • Selling techniques (13%)
  • Customer experience (8%)
  • Customer satisfaction (6%)

56%

"Good" jobs available to those who have completed a bachelor’s degree
“Good” jobs available to those who have completed a bachelor’s degree

In transferring their skills to new careers, workers will likely need additional education and would do well to complete formal credentials (e.g., industry-recognized certificates, bachelor’s degrees). As the Center on Education and the Workforce at Georgetown University has demonstrated, workers with training or education beyond high school face far better job prospects. This is even more true for “good” jobs, defined by the Center as “one that pays at least $35,000 for workers 25-44 and at least $45,000 for workers 45-64.” Workers with less than a bachelor’s earn a median of $56,000 in good jobs, while including workers with a bachelor’s or higher raises median earnings to $65,000. Completing education beyond high school but below a bachelor’s degree opens 24% of those good jobs to workers. Achieving a bachelor’s degree equips workers for over half of good jobs. Preparing students to move into these roles puts them on an improved career path post-pandemic.

Displaced workers will need help to fund their education both in terms of identifying funding sources as well as the financial support (e.g., federal educational grants). The need is undeniable, but schools should prepare to provide additional guidance to ensure students know the value of their education as well as options to fund it.

What to watch: Which industries will offer displaced food services, hospitality, and retail workers the most opportunity?

Helping food services, hospitality, and retail workers transition to viable careers requires knowing:

  1. What skills they likely have, and in which industries and jobs those are in demand
  2. Which industries will hold the greatest potential for success in the post-coronavirus economy

While the second point is still unfolding, we can begin by answering the first.

Professional, scientific, and technical services exhibit the largest demand for related skill sets, as demonstrated by job postings requiring skills common to food services, hospitality, and retail positions. Other potential destinations could include manufacturing, or finance and insurance.

Top industries requesting common food services, hospitality, and retail skills: proportion of 2019 job postings

Top industries requesting common food services, hospitality, and retail skills: proportion of 2019 job postings
Source: EAB analysis of Emsi Analyst data

Within professional, scientific, and technical organizations, workers could be preparing to fill in-demand jobs across sales, accounting, and account management. Almost half of job postings within the industry this year, however, seek applicants with bachelor’s degrees. One-third request less than a bachelor’s degree, while another third do not specify the required education (postings may list and accept multiple educational levels, so fractions do not add to one). Top skills requested include skills former food services, hospitality, and retail workers are unlikely to possess, such as:

  • Accounting (32% of job postings in January to April 2020)
  • Auditing (28%)
  • Business development (7%)
  • Financial statements (6%)
  • Project management (5%)

Equipping students with business administration skills, while ideally putting them on a path to bachelor’s degree completion, prepares workers to enter this high-need area.

Manufacturing industry organizations offer retail and sales positions applying transferrable skills to different products, as well as opportunities as customer service representatives and account managers. Roles more distinct from workers’ previous jobs include quality assurance engineers and financial analysts. Again, nearly half of roles request a bachelor’s degree, while slightly over one-third accept less than a bachelor’s degree, and slightly less than one-third do not specify an educational requirement. Workers would need to develop new skills such as:

  • Auditing (22% of job postings in January to April 2020)
  • Warehousing (14%)
  • Forecasting (9%)
  • New product development (7%)
  • Good Manufacturing Practices (6%)

Entering a pathway to a bachelor’s degree, while learning high-value business or manufacturing-specific skills, would enable students to change industries and elevate their earning potential.

Insurance sales agents, bank tellers, and customer services representatives exemplify achievable roles within the finance and insurance industry. Slightly less than half of finance and insurance industry job postings request a bachelor’s degree, while one-third accept less than a bachelor’s degree, and slightly more than one-third do not require a particular educational level. Skills common to these roles but unfamiliar from food services, hospitality, and retail positions include:

  • Auditing (31% of job postings in January to April 2020)
  • Financial services (23%)
  • Loans (21%)
  • Risk management (15%)
  • Lead generation (9%)

Again, education for business skills would prepare students well for a move to this industry, but with greater emphasis on finance applications; degree completion is less necessary, but arguably still valuable for students in this realm.

Corporations are filling the void from unemployment to new careers

Corporations are already seeing opportunities to connect students from their last job to their next job:

  • Emsi launched SkillsMatch, a tool to identify adult learners’ skills and what education complements those to achieve their desired career
  • Guild announced its Next Chapter offering as a “new approach to outplacement” to guide displaced workers through necessary training and re-employment
  • Coursera, Udacity, and Kaplan Professional have all announced new models to serve unemployed workers that range from individual scholarships to employer or state partnerships

What this means: Education for displaced workers provides high value to communities and individuals, but financing remains challenging for students

Many food services, hospitality, and retail workers won’t be able to return to their previous positions, or similar jobs, as social distancing restrictions loosen. Adults facing lost jobs and returning to the workforce may require intentional recruitment to realize the value education offers at such a time, but would benefit from additional skill development and credentialing.

The greatest challenge facing colleges and universities will be offering affordable, but financially sustainable, transition programs. Unemployed food services, hospitality, and retail workers will lack the personal funds to pursue education, so programs will need to identify and communicate funding opportunities in order to generate net revenue. Resources will vary by campus and state, but consider:

What’s next?

We’re continuing to watch job postings trends as well as adjustments to employment projections, and to monitor trends our partner colleges and universities are reporting. Expect updates to this analysis as we learn more this summer. We’ll be particularly seeking financial models for programs that serve under-resourced and unemployed members of your communities.  

In the meantime, keep a look out for our upcoming regional profiles to see what roles rank among the most demanded jobs for your area, and consider which offer potential career paths for displaced food services, hospitality, and retail workers. Health care roles, for example, remain in-demand with potential for sustained careers—read more about COVID-19’s impact on clinical health care careers and education.

EAB asks you to accept cookies for authorization purposes, as well as to track usage data and for marketing purposes. To get more information about these cookies and the processing of your personal information, please see our Privacy Policy. Do you accept these cookies and the processing of your personal information involved?