Challenges in Hospitality Sector Workforce

Q1: Trends in employment market

Introduction

Broadly, in contemporary business environment, organizations encounter several labour trends. One of the labour trends that need to be considered is the rate of unemployment because it could also change the dynamics of the prospective workforce that would aspire to apply for employment in a company and the level of commitment that they may have at work. In 2012, 22% of youth were considered as unemployed and it continued to rise as years go by (People Management, 2012). According to the brief paper prepared by House of Commons (2019), youth unemployment rate rose to its half a decade peak in late 2012 then saw a sharp decline to approximately 11% currently (Powell, 2019). Furthermore, another factor that might be included will be the available supply of the skills needed in the market. Another key feature that must be considered as affecting the recruitment and retention of candidates will be the requirements set for a particular position that includes the educational attainment, previous work experience, and other credentials that come with it. The current standing of the number of women in the workforce as well as the existing racial differences and cultural diversity may also be considered as some of the trends that currently exist in organisations. Such conditions lead the company to focus more on the achieving a high quality of recruitment as well as providing a strong retention policy in order to maximize the stay of the employees in an institution. Nevertheless, the emergence of ‘Gig’ economy over the past decade has redefined the youth and general perspective working environment include scheduling, engagement, work-social relation, and commitment. As pointed by Frazer (2019), popularisations of task-based labour referred as ‘Gig’ economy by such companies as Lyft and Uber, has resulted in a significant influence to the overall employees’ role and involvement in organization activities.

Specifically, studies have shown the UK’s service sector extensively relies on nationals from the European Union (EU) where some researchers indicating up to 23.7% of the labour market is made up EU individuals (Office of National Statistics, ONS, 2019). In order to maintain the industry, the UK needs at least 62,000 EU nationals to sustain the industry’s growth and activities. Even though the UK benefit largely from labour coming from the EU, the hotel sector currently challenged by lack of labour meeting the requirements (Doggrell, 2018; Quinn, 2018; Kamal, 2018). In addition, a number of hard-to-fill roles remain to be the case because there are new vacancies being added every month than any other sector in the UK (KPMG, 2017). Based on these findings, it is clear that there is a high demand for workers generally in in hospitality sector and contributing factors are outlined below.

The biggest threat to the industry to date is Brexit with the pending absence of EU national’s freedom of movement and possible changes in regulations, which prompt the likelihood to experience a shortage of skills. Since the announcement of Brexit, the Office of National Statistics (ONS) has confirmed that EU immigration has reduced to a four-year low in a full calendar year once the UK decided to depart from the EU (ONS, 2019; Warrell, 2019). The findings also confirmed a third of EU nationals looking for work dropped by a third and new EU nationals arriving in the EU had already organised a positioned prior to coming and this retains to be stable however last year 139.000 EU nationals decided to leave. Furthermore, on the issue of implications of workforce as a result of Brexit, the CIPD argued given that more than 70% of the organizations in the UK employing at least one staff from the EU region, it decision to exit the union resulted in drastic fall in EU nationals recruitments by 95% (CIPD, 2018). According to the findings, more than 44% of organizations in hospitality industry experienced difficulty in recruitment between quarter of 2016 and 2018. Moreover, the prevalence of hard-to-fill vacancies continued to grow. In mid-2018, data showed 70% of employers with vacancies reporting difficulty in filling the position compared to 51% in 2017.

Largely, this shrinking labour source has detrimental impact on the labour market knowing that recruitment by hotel is becoming difficult. As pointed by Caterer (2108), people from the UK labour market are struggling to fill their roles. As a result, there will be more competition in the industry with fierce competitors looking to attract competent and talent employees (Lake, 2018). The downside of this phenomenon is employees’ retention rate forcing the business entities to restructure respective approach towards retaining current staff and future staff. Building from the Taylors’ effects of tight labour market consisting of the safeguarding the income, dignity, and wellbeing of workers, disruption in the labour supply from the EU nationals ultimately cause misbalance between flexibility and protection of workforce (Taylor, 2018). The market will shift towards high demands of competent and talented individuals but low supply affecting retention rate. On a whole, the UK is faced with a continuation need for labour. This can be traced back to drastic growth in UK’s economy over the past years with a combination of further workers and jobs available for men aged 16-65 and 15-65 for women according to the UK Commission for Employment and skilled (UKCES, 2017). Even though the recession threated to derail the economic growth and subsequent labour market, the trend demand for labour still continued to grow with further vacancies being added the UK’s economy and up to 9 million people economically active (Taylor, 2018). As for the gig economy, it continued to be a struggle that although supply of workforce is present, most candidates preferred to work for a contract-based or project-based employment (People Management, 2017; CIPD, 2018). Arguably, the prevalence of gig economy is beneficial to the labour market particularly services industry but hold serious problems in long-term due to continuation of organizations and performance due to low commitment and retention rate. One can argue that the trend holds positive for the hospitality industry particularly the hotels in that staffs are contracted during peak hours and seasons while retaining essentials only. As pointed by Sargeant (2017), the approach allows the employer to pick up workers both on advanced notice and on a need basis, meaning it eliminate chance of under-staffing or overstaffing relative to business performance. However, the flexibility brought by this method holds number of challenges such as the misclassification of workers, workers loyalty, engagement and satisfaction of employees, and compliance with regulations particularly health policy in hotel industry (Department for Business, Energy, & Industrial Strategy, 2018). Recently problems experienced by such companies as Uber and Lyft has prompted the UK government to plan enhancing rights of workers through protection reforms particularly inequality for the same job done (Crerar, 2018; BBC, 2018; Pickard & Wright, 2018).

Another key trend that has been growing rapidly is the participation of women in the workforce. This is now at par with men in addition the state pension for women is continuing to rise but this will only have a minimal effect because women aged 60 have continued to stay in employment but they also been able to stop working regardless of the state pension (Taylor, 2019). Statistics produced by ONS (2018), show the UK’s labour market is aging driven primarily by higher life expectancy and decrease in fertility. According to ONS (2018), there are now 3 in 10 workers over the age of 50 in comparison 1997 where there were 2 in 10 people working. The reduction of individuals with 16-17 years because younger people are staying in education longer have been able to gain employment because the academic qualifications enhanced dramatically which has resulted in students obtaining degrees (The Taylor Review, 2017). Findings released by CIPD (2018c) on impact of an ageing workforce, it indicate that restructured workforce that consist of high number of baby boomers (individuals born between 1946 and 1964) relative to generation X and Y (those born between 1960s and 2000) has a significant impacts on the people management policies and processes. Rajput et al. (2013) and Cahill & Sedrak (2012) illustrated that different generations have different perspectives towards work ethnics, commitment, loyalty, and satisfaction with younger generations opting for more flexibility between work and social life compared to baby boomers. To tackle these issues, we must ensure that we are Brexit-ready, as there will be EU nationals that will be worried about the implications from Brexit. Therefore, we must ensure that we educate our employees and make them aware of the “implementation period” which will involve applying for a settled status. Failure to comply will result in loss of rights to work and live in the UK; also, this will result in facing a fine of up to £20,000 for each EU employee so therefore we must ensure that we start with the implementation as soon as we can as its already taken place. A recent survey from REC (Recruitment & Employment Confederation) has indicated that 42% employers from our industry have confirmed that they have been unable recruit staff for temporary or seasonal positions (Hospitality.Org, 2019).

Q2: Recruiting managers

Having considered the current employment market trends coupled with the current issues within our hotel, I would recommend looking at lateral transfers, promoting from within, bringing back former employees as some of the recruitment strategies. These actions should be taken in order to prevent the current issues within the hotel bringing in employees who may cause substantial amount of dissatisfaction to current employees. If we have employees who are already frustrated, and we fail to use internal recruitment, we may risk of losing employees or receive unsatisfactory performance, which may be damaging in the long-term. It is a good management that job vacancies must be advertised in the intranet and must be distributed through posters (Boella & Gross-Turner, 2013). Another approach that we can use is to offer overtime. I would highly recommend this because if people leave, it can cost us up to £2,000 to replace a large percentage to be used for recruitment. Recruiting internally shows that we are giving our employees the opportunity to develop within the organisation prior to considering candidates externally. This can encourage a strong internal market and employees a motive to remain in our hotel instead of them leaving us to enhance their career elsewhere. By doing this we will maximise our return on investment in training staff and improving commitment and motivation amongst our employees. Existing employees are also knowledgeable on how our hotel functions and expectations of the job and bring new people in can take a long time for them to come up to speed. Even though internal recruitment is cost effective sometimes, there is a need to bring in fresh blood, which is required especially for senior roles to challenge the current environment. As a way of choosing and hiring managers, it will be a great decision to look first in the internal pool of existing employees. A series of test and assessment must be done. Personality test and leadership skills must be conducted to have a grasp of their aptitude in terms of handling and leading a team. Collectively, recruitment process should focus more on the individual’s competency boiling down to bringing in right individuals, eliminated wasting of resources that include time and money, and team cohesion. If there are no suitable candidates available in our hotel then the next stage is to go external to source labour, we must be selective on the recruitment methods as it can be costly if it is not done right (Boella & Gross-Turner, 2013 and Taylor, 2019). It has been suggested that hotel industry is tarnished with a high staff turnover. With the rise of social media, it will give us the advantage to reach the global audience by informing followers on Twitter, Facebook, Instagram and LinkedIn so people may know about our vacancies. As stated by Nick Claypole, Operations Manager of a hotel in South East London, they found that with the market being heavily saturated with many unqualified candidates, they are having a hard time seeking the right candidate. They have found that social media works well to obtain passive candidates. As pointed by Syedain (2013), the theorised concept of ‘right’ type of employees held by every organization highlights difference in approaches and perspective in development and implementation of recruitment process moulded by cultures, ideals, goals, and environment of a given firm. LinkedIn in particular is a great way to attract candidates for managerial roles while Twitter works very well in attracting receptionist roles. Social media platforms are known to be powerful resources of candidates and we can create a talent management pipeline that is strong. A recent study conducted by CIPD/Hays Resourcing and Talent Planning found that LinkedIn is the most appropriate tool to use in sourcing candidates and the figure continues to rise. Nevertheless, this would mean that we must ensure that our LinkedIn page is accurate and updated on a regular basis (Syedain, 2013).

Furthermore, clear connection with target candidates must be done. According to Ladkin & Buhalis (2016) and Gibbs et al. (2015), social media platforms such as LinkedIn informs recruiting individuals with shared personality and agreeability qualities as those of the organization. One should also take into consideration that for an employer type of LinkedIn profile, certain cost is associated. Informal methods account for some new hires too and the word of mouth is its best form. However, in our case this is not going to work if we already satisfied staff. If we want to hire a manager with all the skills that we require, then I would also resort to using a recruitment consultant as they will be able to find the skilled manager that we need (Headworth, 2015; Goldstein et al., 2017; Kinnunen, and Parviainen, 2016). In addition, recruitment consultants can take charge of the whole process for us although the cost will be 10-20 per of the annual salary. It should be ensured that terms and conditions are well-established and clearly stipulated but individuals friendly. For example, in selecting someone who is familiar to hotel industry, it is ideal to have someone on a temporary basis with the option of going permanent so we can ensure that they are the right fit for our hotel. In addition, many recruitment agencies will also give a rebate if the candidate is not suitable relative to the firm’s culture and ideals (Sinha, and Thaly, 2013). Given that an employer-employee relationship is already established, a more tailored approach may be implemented wherein the expectations of the newly hired employees will be set in such a way that obligations and proper delegations will be made. Based on the psychological contract concept, both the employee and the employer should enter into this agreement to better set the commitment from both sides (Lub et al., 2012). The psychological contract may be established in the first week duty of the new employee, if not initially set by the employer, it will be established through the colleagues of the new employee and the initial impression formed. Moreover, such technologies as Artificial Intelligence (AI) should be considered in attempt to enhance the efficiency, productivity, and accuracy in identifying individuals with qualities aligned to those of the firm. The AI could search through pool of prospective employees by screening of several profiles whether Social Media based key variables and qualities of the organization while eliminating concerns such as racial and gender bias (Beamish and Rogers, 2019). Nevertheless, as asserted by Brown (2019) concerns highlighted by the Brexit uncertainty on labour market prompts consideration of training potential employees and ‘gig’ economy focusing particularly on the employee flexibility such as youth’s work-social relationship. For our receptionist roles, I would strongly recommend that we hold an open day and the idea behind this is to invite candidates on a day where potential receptionist come to meet the management team to give them an understanding of our hotel instead of having the HR team sifting through job applications of each person individually. This will assist us with spotting out candidates with the required skills. This is the chance for potential employees to see how our business works and get a feel of how it would be like working with us, which is better than a formal interview. This will also allow us to highlight our hotel in addition to help us assess culture fit. The advantage of this is that it gives all those involved in the process to demonstrate their abilities and for them to show off their personality, which is vital in our hotel. The Jury’s Inn found that the day went well and they plan to do the same again when they have job openings. This can be done by putting up posters, which states, “Staff wanted” to get them in. Another way is to use social media to post such announcements but it must be focused on some hospitality groups where people in the same industry or with the same interest and background will look for job openings (Eversham, 2015). Furthermore, due to technological advancements, a virtual receptionist may be adapted in order to automate certain services. There was a study made by Gartner that by the year 2020, most customer interactions will not need the presence of human anymore (Open Access Government, 2019). Fundamentally, virtual receptionist solves the problems of understaffing while advancing quality of costumer services, reliability, time management, useful during peak seasons, and cost saving. Such innovation is great but this somehow removes the personal touch and sensitivity that humans can provide.

Q3: Retention strategy, Diversity management, and Flexible working approaches

The current human resource (HR) data may be used to provide retention strategies for the hotel. As an example, if the hotel employees tend to experience stress and work overload during peak season, it may be a good way to provide more incentives during peak season to make them more engaged at work. However, one thing to consider would be the allotted budget for such strategy backed up by the approval of the management. Moreover, the exit interview data and some random attitude surveys to the employees in terms of their current feeling and idea towards our hotel can be used in assessing and in understanding what could be the possible ways on how to address their concerns. One foreseeable problem in these actions is the intention of the employees to actually tell their true feelings and opinions. Another way to harmonize the workforce in such a way that most, if not all, employees will stay in the organisation is the acceptance of the differences. The utilization of the diverse workforce that we have as a way of accommodating and collecting various ideas and viewpoints coming from different people with different perspectives is a good way to start with. In an article written by Rosalind Mullen in The Caterer, a clear emphasis was given in accepting diversity given that the UK, London, has a diverse workforce and diverse group of people (Mullen, 2018a). Furthermore, according to Gregory Hall, with diversity, each customer should feel comfortable most especially in hospitality industry (Mullen, 2018b). Improving retention will be an important focus if there is high employee turnover in critical areas or those exposed to Brexit changes. It will alleviate pressure on recruitment in a tough labour market. An analysis by performance and talent management consultancy People first suggested that retention is even more vital than attraction as a driver of good people management in the hospitality sector. In the social care sector, nearly half of staff leave within their first year of employment. Understanding turnover goes beyond knowing the headline figures but also to churn by site, job role, sector, recruitment route, and interpersonal relationship (Vasquez, 2014; Tews et al., 2014). Practitioners need also to understand why people leave, including whether it is poor management driving them away. Other actions may include increasing investment in training and employee support, improving on-boarding, and creating a better connection with organisational purpose. Offering flexible working arrangements or accommodating people’s wishes to work part time or avoid certain shifts/days can improve both retention and attraction

Given the strict implementation of anti-discrimination law, this issue should be taken seriously and the hotel should take advantage of having a diverse workforce. In terms of recruitment, diversity can create a great impact in the workplace. In 2018, 78% of talent leaders agreed to this fact about the importance of diversity (People Management, 2018). Based on the study of Jackson & Dutton (1988), diversity should be considered as an opportunity and not a threat. In addition to complying the laws and policies, a diverse workforce increases creativity, productivity, interpersonal relationship, problem solving, and reputation (Barak, 2016; Taylor, 2018). Diversification of the workplace does not end by recruiting both male and female but involving individuals from different backgrounds socially, culturally, religiously, and financially in core organization activities and operations. Given such, some positive changes may occur in the organisation (Cooperrider & Sekerka, 2003). Diversity networks should also be welcome in the our hotel since if we will be able to create linkages and connections with other diverse industries, a more strategic recruitment of candidates and retention of more qualified employees may be achieved (Terry, 2019). Due to globalization, an organisations’ openness to diversity should be one of utmost importance. To address the concern regarding the discrimination in our hotel and to patronize workplace diversity, equal opportunity should be provided for both sexes across all levels in the organization. To counter further the issue of female manager leaving the male managers in the hotel, there must be strict unbiased assessment and monitoring of all managerial-level employees as well as fair practices in the recruitment in terms of sex (Mullen, 2018b). Breaking the traditional mind-set that female should not be at the same level to those of men most especially in assuming supervisory roles, several managerial training and seminar/gathering may be implemented wherein there is emphasis of the equal opportunity given to both sexes in terms of promotion, work roles and power scope (People Management, 2018). Female managers may also be given some work set up flexibility given that most of the time; females are also the ones in charge at home. Just like what the Travelodge have used as a strategy for recruitment and selection wherein they plan to hire parents for the upcoming positions that they have while providing a more flexible work set up in order to accommodate their responsibilities as parents (Hospitality and Catering News, 2019). This strategy is highly recommended since it will be a win-win situation for both the employee and the employer. The employee can perform their multiple roles and the hotel can retain such workforce because of being able to attend to their needs and preferences.

Dig deeper into Implications for Human Resource Management with our selection of articles.

Work flexibility may be seen as a new trend and strategy to implement a strategic way in retaining employees. Having a flexible work set up most especially the one that focused on employee schedule, would give our employees better opportunity to better manage their time and have the authority in deciding about their work set up (Sakrouge, 2017). The person in-charge in creating the schedule may give a certain degree of freedom from which the employee can choose the schedule. The increased perception towards integration of social-work ideology or balance between work and family have driven mostly young employees to adjust into flexible working conditions and environment away from traditional nine-to-five set up (Jeffrey, 2017). Although caution should also be provided since this set-up can easily be abused and would still be able to serve the time needed for the duty of each employee. Such flexibility should not only be implemented in terms of the work schedule but in other aspect of an employee’s life as well. According to the study of Clarke and Holdsworth (2017), adapting flexibility in the working set up of employees may prove some beneficial effects for both the employees and the employers. With the advancement in technology, such flexibility may be adapted in our hotel. It will give the employees more freedom in handling and managing their tasks and responsibilities. In the study of White et al. (2004), he mentioned that flexibility and working in teams in UK organisations has not been maximized well yet. This study emphasized that such core idea should be practiced and that employees may be put in teams that would independently be able to manage their group. I can initiate an open-hall communication with the employees in order to hear their sentiments and opinion in terms of implementing some flexibility in the work arrangements that they are currently experiencing. The basis of such idea is because they are the ones having a first-hand experience of the job and they are more knowledgeable on how to effectively implement some modifications and adjustments. Having been proposed several new strategies, our team should still need to thoroughly create a plan regarding the suggested strategies because each option has its pros and cons and the positive factors should outweigh the negative ones in order for it to be considered as effective and ready for implementation. What matters is the idea that each option would create a positive impact for both our organisation and the employees.

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