The COVID-19 induced recession centered on the services sector, leisure and hospitality in particular. With approximately 25% of local economies tied to tourism, businesses shuttered and thousands of workers were laid off. Now those companies are struggling to reopen, as positions remain unfilled and businesses are operating at less than full capacity. Though the national unemployment rate dropped from a peak of 14.8% in May 2020 to 6.1% in April of this year, the workforce is still 8.1 million below pre-pandemic levels. This corresponds to the local trend. California Employment Development Department (EDD) data shows unemployment in Sonoma County peaked in May last year at 13.4% and now down to 5.3% as of May. And yet there are thousands of job openings. So what happened to all the workers?
Rob Eyler, Ph.D., professor of economics at Sonoma State University shares his thoughts on the dilemma. “There are several factors that come into play,” he says. “During the pandemic, many workers eligible for retirement reassessed their life goals and decided to take early retirement. Other workers moved to lower cost areas outside California. These early retirees and those who moved out-of-state have not been replaced. Without childcare, and with schools closed, many women were forced to quit their jobs. And that is still an issue. Lastly, unemployment insurance, though providing a needed cushion when businesses closed, has been a disincentive for lower wage earners to seek employment. That insurance likely ends in early September,” Eyler says.
A recent Pew Research Center survey implies that it’s not so much a shortage of workers but rather a reassessment. The survey found that about half of those unemployed, are pessimistic about their prospects for the future and are considering changing fields or occupations.
Nonprofits assist
A few Sonoma County non-profits have stepped up to help. The Sonoma Valley Chamber of Commerce implemented a job board, workinwinecountry.com. Within a month of launch, 50 valley employers posted openings. There are now more than 100 positions listed. “We had to do something to help the business community,” says chamber CEO Mark Bodenhamer. “Local businesses are coming out of an unusual tough time and immediately transitioning into peak hospitality season. The lack of workers has kept hotels, restaurants and tasting rooms from operating at full capacity, yet their fixed costs like rent, insurance and utilities are the same. It’s extremely frustrating that these businesses have an artificial cap on their ability to recover financially.” The chamber’s job board provides leads and information on opportunities in the hospitality sector, wine and food, brewing and distilling, catering and other tourism-related businesses.
Sonoma County Tourism launched an Accredited Hospitality Professional (AHP) program. Industry professionals designed the curriculum, customized to focus on Sonoma County. Topics include; the importance of tourism, customer service and visitor safety; local wineries and American Viticulture Areas (AVAs); environment and sustainability; and local art, history and culture. “Those in the tasting rooms, restaurants and hotels are the face of Sonoma County,” says Claudia Vecchio, CEO of Sonoma Tourism. The program is designed for residents, industry professionals and those making a career transition. Classes began July 8. “The response has been overwhelming,” she says. There are in-person classes taught in either four-hour blocks or multiple smaller sessions, with virtual classes also available. Cost for the accreditation program is $45 with an annual renewal fee of $20. Following accreditation, recipients participate in networking events and have access to additional educational resources. Sonoma County Tourism regularly publishes times for new classes. Registration is on-going and can be accessed by visiting sonoma-county.com/partners/Sonoma-county-ahp-program.
Layoffs and rehires
The Chandi Hospitality Group, owner of Stout’s Irish Pub, Bibi’s Burgers, Beer Baron, Bollywood Bar & Clay Oven and eight Mountain Mike’s restaurants was considered the United Nations of food and beverage. Downtown has been challenged with fires and it all changed in March 2020. “With the exception of Mountain Mikes, 90% of profits from operations came from inside dining. And that disappeared,” says Sonu Chandi, owner and CEO. “The most unfortunate part was that we had to lay off 70 employees.”
After a few months, bars and dine-in restaurants reopened and Chandi Hospitality rehired its former employees. Five months later, the state re-imposed restrictions, the businesses closed and workers were laid off yet again. “Fortunately, we found positions at Mountain Mike’s for employees who wanted to stay with us,” Chandi says. With dine-in shut down, the group was forced to revaluate its strategy. Stout’s Pub in Santa Rosa was sold. Bibi’s Burger’s and the Bollywood businesses were discontinued. “We’re committed to downtown Santa Rosa for the long term. It will become the vibrant hub we envisioned,” says Chandi. “The pandemic has helped restaurants add outdoor seating and an exciting vibrancy in the core of downtown Santa Rosa.” Beer Baron has since reopened, offering food, craft beer and cocktails with a Bollywood pop up menu on Tuesday and Wednesday nights.
With restrictions on dine-in, take-out and outdoor patio dining at Mountain Mikes surged. “All locations are hiring to meet demand,” Chandi says. “And we’re hiring for other reasons. Eight members of my family have been involved in growing Chandi Hospitality Group. It’s time to allocate some of our responsibilities. This will happen through promotions and bringing in more mid-level management.”
One of those new hires is Katy Duarte, general manager of Mountain Mikes in Rohnert Park. In 2017, the restaurant burned, but has since been rebuilt. “I’ve been in food and beverage supervisory positions since I was a teenager,” Duarte says. Though in 2006, her career was sidetracked by a brain aneurysm. “It took me several years to relearn basic things, like walking.” During recovery, Duarte attended Santa Rosa Junior College and got associates degrees in humanities, psychology and social studies. “All related to working with people,” she says. At her most recent job in The Barlow, her salary was cut due to lack of business. “My family has been in the area since 1945. I was attracted to Chandi Hospitality for their commitment to supporting schools and the community. And I wanted to work for a local company. I have exciting plans for the Cleveland Ave restaurant and have put out the word to my network that we’re hiring.”
Nayeli Ruiz, another recent Mike’s Mountain general manager hire, says, “Previously, I was the food and beverage assistant manager with a hotel in San Francisco. I got laid off because of the pandemic. I could have gotten unemployment insurance, but that wasn’t enough to pay bills. Besides, I wanted to work.” Ruiz took a job with a collections agency until Mountain Mikes came calling. “I’m happy to be back in the hospitality business. I’m all about customer service,” she says with a smile.
Chandi says that finding drivers is a hiring challenge. “It’s something we didn’t face a year ago. Now we compete with Door Dash and Uber Eats.” For help filling some positions, Chandi Hospitality uses the services of Next One.
Hiring for the future
Next One Staffing began operations in January 2020. “My timing couldn’t have been worse,” says Founder and CEO Ryan Buxbaum. “There was demand for new hires prior to the pandemic, then everything fell apart. It was a tough time. And no one knew how long it was going to last.” The company hunkered down and focused on resume repair and consulting. “By June, employees had become accustomed to working from home. The Microsoft TEAMS platform that facilitates collaboration and communication, was a big driver in the success of working remotely,” Buxbaum says. “And ZOOM job interviews became the norm.”
Next One focuses on the banking and finance sectors while also working with other companies such as Chandi Hospitality, Sonic and The Fountain Grove Club. Clients are based in Sonoma County, San Francisco, Sacramento and Folsom. They typically have 15 to 500 employees. “97% of our searches are completed within three weeks. Right now demand for employees is huge. An impediment to filling on-site jobs is that some people are still reluctant to return to the office. As more are vaccinated, that will change,” Buxbaum says. “Another issue is the ongoing unemployment benefits. Why would someone want to work for $18 an hour when they can get $21 in unemployment?”
Beginning in April of last year, Next One placed temporary employees with banks engaged in the Payroll Protection Program (PPP), a program offering Small Business Association (SBA) backed loans to help a company keep its workforce. As PPP wound down, many temporary employees became permanent and placed in other areas of the bank. “A lot of our business is contract hires,” Buxbaum says. “We hire an employee on a six-to-12-month basis and place them with one of our clients. We take care of all the benefits and payroll. This allows the company to do a trial run to see if the person would be a good fit on a permanent basis. And vice versa.” Currently, with interest rates low, banks are inundated with refinancing requests. Next One’s hiring is focused on filling the need for loan processors and underwriters.
The hospitality industry
As of March 2020, the famed Vintners Resort and John Ash restaurant had 200-plus employees. When businesses were forced to close, 140 were laid off and 50 furloughed. A skeleton staff of ten stayed on for maintenance and basic administration. “It was devastating,” says Percy Brandon, the long-time general manager. “Our employees are like family.” The resort, situated on 92 Russian River Valley acres with 78 luxury rooms and suites and three restaurants, was closed for four months. “In July, we began a phased reopening,” Brandon says. “For John Ash & Co. we set up a tent out back, purchased heat lamps and converted a herb garden into additional dining space. This allowed us to seat 150 guests.”
Fifty-five of the furloughed employees were brought back as well as some of those laid off. The hotel opened to limited capacity. Rooms were sanitized and rested for 24 hours between guests. Room delivery replaced room and breakfast service with orders left outside a guest’s door. High touch items were removed from rooms and refrigerators were sealed with tamper proof stickers. “With the precautions we initiated, diners and hotel guests felt safe to return. And they did,” Brandon says. Then in early December, the resort and restaurants had to shut down again. “We let go all the employees we’d recently hired. And we had to refund thousands of dollars of room and wedding reservation deposits.” Vintners hosts over 100 wedding events each year, a big part of its business.
John Ash & Co. switched to take-out and reopened in late February for five nights a week followed by Vintners Resort opening for four nights. The Front Room Bar and Lounge, a popular Happy Hour destination, reopened in April. “I noticed that those working from home tend to get cabin fever around 3 p.m. So we changed Happy Hour to 3-5 p.m. Now the Front Room is packed,” Brandon says. “In these times, one needs to look at the pattern of the people and reinvent.”
Vintners Resort and John Ash & Co. have 40 job openings. “Some employees are held back by our luxury brand. No need. We have many entry-level jobs and we offer training,” Brandon says.
Manufacturing jobs
As the hospitality sector shut down, SMC was called on to fight the COVID-19 battle. Headquartered in Wisconsin, SMC is a contract manufacturer of devices for the medical industry. The company’s operations are located throughout the U.S., U.K., India and Costa Rica. The Santa Rosa facility, with 250 employees, occupies 63,000 square feet with plans for an additional 20,000 by years end. The local company operates 24 hours a day, seven days a week.
SMC partners with medical device manufacturers, both established and start-ups. The majority of the business for the CA site is generated on the West Coast. “Prior to the pandemic, operations focused on medical devices. In May 2020, we expanded our to diagnostics offerings,” says Plant Manager TJ Shadid. “We partnered with several companies for the development of COVID-19 testing kits. Initially most were for lab tests, though several have since received FDA approval for over-the-counter and in-home use. Beyond COVID-19, and with existing platforms, the emerging market and our focus will be on in-home, fast diagnostic testing.”
SMC employs a highly-skilled and engineering-driven workforce. “Our biggest challenge going forward is finding talent,” Shadid says. “Our preference is to hire locally, though on occasion recruiting efforts have led to hiring from out of the area. The tight housing market makes it difficult for new employees to relocate here.”
Employees rave about the rewards of working in the healthcare field and the benefits of SMC’s flexible work hours. “The people here make everyday a joy for me and our company’s efforts to improve healthcare are very rewarding,” says Alana, a recent hire. “It’s great to be able to work weekends, continue with my schooling during the week, and still have an opportunity for advancement,” says Erik, another recent hire.
SMC currently has positions available for operators, inventory control coordinators, buyers, quality and process engineers and program managers. Operating for 24 hours a day, seven days a week, there is shift flexibility as to days, nights or weekends. “Our plans are to continue to grow within current space and expand into the pharmaceutical market,” Shadid says. “We are committed to continuing our local growth, hire talent, and partner with OEMs to bring medical solutions that improve patient care globally.”
The future of hospitality
Visitors from throughout the U.S. and soon to be followed by international travelers, are returning to enjoy the many attractions of Sonoma, Napa and Marin counties. Businesses are reopening to greet and accommodate them. Though with a shortage of labor, they’re using creativity to fill jobs. All offer training, while some are offering signing bonuses. Others are resorting to job boards and radio ads while participating in job fairs. The impact of the pandemic on local economies has been huge. Businesses and employees have been whiplashed by a series of closings, re-openings and layoffs.
There is room for optimism, tinged with a bit of caution. “Local economies are coming back strong, though it will take until the end of summer to gauge the momentum and if a variant does not lead to forced change again as in 2020,” says Eyler.
