Our figure of the month 10/2021: Hospitality, tourism and personal service industries with highest employment declines in 2020 due to pandemic
Loss of labour force continues to slow turnover recovery. Employment gains in online retailing, parcel delivery services and the IT sector, among others.
The pandemic has not only led to a drop in turnover in the tourism, hospitality and personal services sectors, but also to a high loss of labour force. As a comparison of the employment statistics published by the German Federal Employment Agency (BA) as of 31st December 2020 with those at the end of 2019 shows, these sectors have lost up to a fifth of their staff in the face of long-lasting lockdowns and restrictions regarding travelling and events.
The chart below shows the biggest Corona winners and losers in terms of percentage employment growth in 2020. The green bars show the absolute change in employees, i.e. the sum of employees subject to social security contributions and exclusively marginally employed persons from 31.12.2020 versus 31.12.2019. The figures with a light grey background show the percentage change in employees in the same period.
Across all economic sectors, the number of employees at the end of 2020 was only approx. 1 % below the previous year's value according to the BA, with the number of employees who pay social security contributions remaining stable across all sectors, while marginal employment declined by about one tenth.
The hospitality industry suffered by far the highest absolute decline of all sectors with a total of 275,000 employees. This means that every sixth job was lost in these employment-intensive sectors (-16.5 %), whereby the restaurants and catering (Nace 56) and the accommodation industry (Nace 55) were affected proportionally in equal measure. In addition to 165,000 so-called mini jobbers (approx. 30 % of all marginally employed persons in the hospitality industry), 110,000 or one tenth of the employees subject to social security contributions lost their jobs in this sector in 2020. By way of comparison, job losses in 2020 amounted to merely 230,000 in all manufacturing sectors in total (NACE 10-33) This corresponded to only about 3 % of jobs across all industries.
Among travel agencies and tour operators (NACE 79), the percentage decline in employment was even higher than in the hospitality sector at over 18 %, but only affected a total of 18,000 jobs, three quarters of which were jobs subject to social security contributions. The personal service sectors (NACE 90, 92, 93 and 96) recorded the third highest percentage decline in jobs with -10 % or 16,500 jobs, roughly half of which were accounted for by employees subject to social security contributions and those employed on a marginal basis. Particularly affected were art and culture professionals (NACE 90), the entertainment industry (NACE 93.2) and hairdressing and beauty salons (NACE 96.02). The fact that the reduction in employment in this sector was not even higher in 2020 in view of the long lockdowns and the cancellation of almost all major events, folk festivals, etc. is probably also due to the very high number of self-employed persons or sole proprietors in these economic sections. The hairdressing and beauty industry consists of 93 % sole proprietorships. In NACE 90, the share of self-employed amounted to more than 60 % in 2019 and in NACE 93.2, which includes showman enterprises and amusement park operators, about a quarter were self-employed, while across all economic sectors only every tenth working person is self-employed. Since the self-employed are not included in the -employment statistics, the number of those who have become unemployed due to the pandemic is likely to be much higher among personal service providers.
At the same time, the highest percentage job increases were recorded in online retailing (+8.3 %), postal and parcel service providers (+6 %) and the IT sector (NACE 62, +3.7 %). With an even stronger increase in demand than before the outbreak of the pandemic, these economic sectors are also among the winners of the pandemic regarding the employment situation.
Outlook after Covid-19 pandemic
The sales outlook is very positive due to the pent-up demand and an increase in demand from private and business travel, restaurant visits and events and meetings after one and a half years of pandemic-related lockdowns and cancellations. Since the reopening at the end of May 2021, however, staff shortages have been severe, especially in the hospitality sector. A lack of service staff restricts the opening hours and occupancy rates of the establishments and thus also the recovery of turnover. In view of unattractive working hours and still very low wages, it can be assumed that many of the more than 275,000 people previously employed in the hospitality industry will stay permanently in their new jobs, for example in logistics or with online retailers.
In the medium term, the growing shortage of skilled personnel, which has already posed major challenges for the industry sector before the pandemic, will become an even bigger problem. The number of new apprenticeship contracts within the German dual training system also reached new negative records in 2020 with a decline compared to the previous year of around one fifth for cooks, one third in for hotel management assistants and over 60 % for travel agents. In the hairdressing sector, the number of new apprentices which started in summer 2020 were 19 % below the previous year. The resulting shortage of skilled workers is likely to remain a major obstacle to growth in these economic sectors even after the end of the Corona restrictions.
Sources: Bundesagentur für Arbeit (BA): Employees according to sectors (NACE 2008), quarterly publication, reference dates: 31.12.2019 u. 31.12.2020, own analyses, Stat. Bundesamt: Employed persons acc. to business sectors, year 2019, Businiess register 2019, Fachserie 2 R. 1.6.4 Companies and workplaces, cost structure in hairdressing and beauty salons 2018, press release on apprenticeships dated 11.8.2021; Allgemeine Hotel- und Gaststättenzeitung (AHGZ): Hotels und Gaststätten suchen dringend Mitarbeiter, 21.09.2021; wdr.de: Gastronomie am Limit: Cafés und Restaurants fehlt Personal, 21.09.2021.
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