Lisa Katz| Crain’s Detroit Blog

In 2014, more than 72,000 postings went up online in the retail and hospitality industry across Southeast Michigan. This industry encompasses all customer service occupations, with skills transferable across the retail sector, the hotel industry, food and beverage service, call centers, gaming/casinos and others. With this much demand, and this many open positions, why are R&H workers struggling to find gainful employment?

Demand for post-secondary degrees and certifications is on the rise. Alicia Sasser Modestino, a former senior economist at the Federal Reserve Bank of Boston and now a professor at Northeastern University studying regional labor markets, has come to the conclusion that — even when opportunities exist — in these occupations, “workers don’t move and migrate as much as we think they do.”

R&H workers have more contact with the public on a daily basis than any other industry, but it still manages to be incredibly isolating. For the more than 632,825 workers that were employed in the industry in this region in 2014, the future is bleak.

In a recent study by the Workforce Intelligence Network, resumes of people who hold or did hold R&H occupations were analyzed to determine how people in low-wage, low-skill jobs were using their experience and transferable skills to climb the career ladder.

Results indicated that, simply put, workers in these occupations were not “moving up in the world” as hypothetical career maps might suggest. Instead, the research showed that entry-level, low-wage occupations in these industries are not very mobile.

Key findings include:

  • More than a quarter of retail salespeople (26 percent) held the same or similar position five years later, with no increase in median salary.
  • Individuals in customer service occupations had a 36 percent chance of staying in the same or similar position five years later, with no increase in median salary. Twenty percent of these employees became senior customer service representatives, resulting in a negligible increase in earnings.
  • Forty-seven percent of individuals in restaurant occupations such as serving and bartending retained the same or similar job title five years later. Only 20 percent of these employees obtained a management position within five years.

For many, an occupation in the R&H industry was a “first job” — with good reason. It is an appropriate entry point to the labor force, providing flexible or part-time hours with valuable customer service and work experience.

However, too many local workers are staying too long in entry-level positions that do not provide a self-sustaining wage. According to WIN data for the most recently completed quarter, retail and hospitality workers in the entry-level, high-demand occupations in this sector earned less than $12 an hour, on average, while a living wage is recently considered around $17 per hour. Across the nation, workers earning only the minimum wage were disproportionately employed in retail and hospitality fields: 47 percent in food-preparation and serving-related occupations, 14.5 percent in sales and related occupations and 7 percent in personal care and service occupations.

Hundreds of employers across metro Detroit are scrambling for talent and struggling to find qualified workers. With some technical upskilling, the retail and hospitality industry could provide a pool of workers with labor force and customer service experience — but the structure to do so simply does not exist.

In other industries, career progressions are clearly defined. Not so, in retail and hospitality. Workers are not connected to education advancement systems and are ignored by potential employers.

Putting the mechanisms in place to make this an option is part of the theory of career pathway system development. Career pathways are constructed to support workers’ transition from education into and through the workforce. This strategy requires articulated educational and training programs and services coupled with clear, industry-approved career progressions to allow individuals from all skill levels to advance over time to successively higher levels of employment.

In order to provide some upward mobility for R&H workers and allow them to increase their earnings, education, workforce partners and companies could examine positions that might benefit from a strong customer service skill set. Who interacts most with the public in the company? Who manages partner relationships? Who deals with conflict resolution? All of these occupations could probably benefit from the transferability of a strong customer service background.

For example, a portion of Medicaid reimbursement to hospitals is based not on medical care but on customer service survey results. Hospitals therefore have a strong incentive to hire individuals with advanced customer service skills. Where better to source these workers than an industry that teaches and thrives on exactly that?

If career pathways into various industries can be clearly articulated for these workers in a streamlined system, fewer of them will stay in positions that do not allow them to earn livable wages. Consider an assistant manager of a local department store. This individual has sales experience, customer service skills, conflict resolution abilities and experience managing staff, but is only making $15 an hour. These skills, coupled with an additional short-term certification, could earn this person upward of $25 per hour in another industry.

Retail and hospitality workers present a pool overflowing with this kind of talent; the opportunity just needs to be brought to light. Maybe then R&H workers can come out of hiding, strange as it may seem.

Most common occupations 5 years later and median wages

Retail sales

Job titlePercent of retail sales workers
who hold job 5 years later
Median pay
Retail Sales Associate26%$20,400
Retail Store Assistant Manager16%$30,800
Retail Store Manager14%$36,900
Customer Service Representative (CSR)4%$29,500
Nurse Assistant4%$24,800
Inside Sales Representative10%$39,300
Outside Sales Representative7%$51,100
Department Manager, Retail Store6%$31,900

Front of house

Job titlePercent of FOH sales workers
who hold job 5 years later
Median pay
Restaurant Manager10%$32,200
Administrative Assistant3%$30,700
Medical Assistant5%$27,400
Bar Manager11%$30,000
Assistant Restaurant Managers12%$29,900
General Manager, Restaurant or Night Club8%$40,500


Job titlePercent of accommodations workers
who hold job 5 years later
Median pay
General Manager, Hotel8%$46,300
Front Desk Supervisor19%$25,000
Front Desk Manager15%$27,100
Front Desk Clerk10%$21,100
Property Manager4%$37,300
Meeting/Convention Planner8%$42,600
Hotel Sales Manager16%$42,500
Guest Services Manager, Hotel12%$29,000

Customer service

Job titlePercent of customer service workers
who hold job 5 years later
Median pay
Customer Service Representative (CSR)36%$29,500
Office Manager2%$34,500
Administrative Assistant3%$30,700
Customer Service Supervisor7%$39,700
Senior Customer Service Representative (CSR)20%$31,400
Customer Service Manager5%$41,500
Personal Banker3%$34,100
Assistant Manager, Customer Service8%$28,000
Customer Service Team Leader11%$35,100

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