Human Resource Management in the Hospitality Industry

A Guide to Best Practice

Michael J. Boella, Steven Goss-Turner

• Publisher: Routledge
• Year: 2019
• ISBN:
  9780429805943
• Edition: 10
• Topic: Business
• Subtopic: Hospitality, Travel & Tourism Industry
• Index: Business

Human Resource Management in the Hospitality Industry: A Guide to Best Practice takes a 'process' approach and provides the reader with an essential understanding of the purpose, policies and processes concerned with managing an enterprise's workforce within the current business and social environment.

Since the ninth edition of this book there have been many significant developments in this field and this new edition has been completely revised and updated in the following ways:

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• Extensively updated content to reflect recent issues and trends relevant to the hospitality industry including: changing labour market profiles and the 'gig' economy, the digital transformation of HRM practices, employer branding developments, talent management strategies, employee well-being considerations, and contemporary concerns over diversity, gender and harassment at work.

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• Five new chapters on: organizational culture, modern labour markets, emotions and well-being, careers in hospitality, and digital HRM.

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• New international case studies throughout to explore key issues and show real-life applications of HRM in the hospitality industry.

Written in a user-friendly style, each chapter includes international examples, bulleted lists, guides to further reading and exercises to test knowledge.

PART 1

The hospitality industry HRM context

1 Background to the industry’s workforce

Introduction

To consider an industry’s workforce and the most effective means of managing the people in that workforce, one must begin by examining the context and the environment in which the industry is operating. And that context is continually changing as it responds and reacts and often lurches forward in the face of extraordinary and often unpredictable external forces. The decade since the financial crisis of 2008 is a graphic example of how politics, society, economics and technology have radically altered our perceptions and our understanding of the world around us. The rise of populism, countries moving to a nationalist and right-wing agenda, issues surrounding migrant labour, radical re-thinking in the way people work and behave towards one another, gender and harassment issues, the effects of artificial intelligence (AI) and other technological advances, have in some degree or other affected all industries and all workforces.

Every era has its own distinctive context of change and successful managers and businesses are those who react, adapt and change most effectively to the new challenges around them. As one of the foremost thinkers and writers on business of the 20th century, Peter Drucker, once pointed out, “The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic.” The way we did things in the past is not likely to be the way to do things in the future. It is perhaps of some comfort that in a recent book on AI (Lee, 2018), the author, a renowned researcher and company chief executive within the technology sector, considers that management is one of the jobs least likely to be fully replaced by AI. In contrast to Lee’s main thesis and his forecast that 50% of today’s jobs will be replaced by AI in the next 15 years, he also considers that the function of management requires essential human interaction abilities, such as motivation and compassion, and that AI cannot deal with such complex personal, caring functions. There is comfort here for the hospitality industry, one based on large numbers of employees providing services, customer care and products directly to their fellow human beings.

Not that the hospitality sector is immune from technological change, as will be explored within this book. Recruitment and selection of employees is being greatly influenced by high-tech practices around algorithms, online interactions, social media involvement (see Chapters 6 and 8); hotel receptions may have more self check-in terminals than receptionists; restaurant meals may be pre-ordered and paid for via the brand’s downloaded app; the hospitality sector figures prominently in the so-called ‘gig’ economy as more food is ordered from, and delivered to, our own homes. Yet the hospitality industry also retains many traditional characteristics that all impact on the working lives of managers and employees. The industry has always been dynamic, despite the large numbers of small and owner-managed properties, as the proliferation of highly competitive brands and hospitality concepts illustrates (e.g. multiple hotel brand differentiation, budget and boutique hotels, restaurant chains, coffee shops, pop-up eatery and street food concepts). The sector has always had to address a range of staffing and skill shortages, and has always needed to reflect the social trends and current thinking and perceptions of the wider society, the ‘psychographics’ as well as the demographics, and the specific employment concerns of the day such as post-Brexit staffing shortages, zero-hours contracts, tips and service charges distribution, gender pay gaps, discrimination and harassment issues.

Hospitality industry developments

The business environment of hospitality is difficult to forecast as there is so much change that is reliant on the trends and the social and economic circumstances that are impacting on the industry. The global reach of the sector adds to the complexity, reflecting local national and cultural characteristics (Ernst and Young, 2012). The international hotel and restaurant chains have long sought to establish their presence in as many corners of our world as possible, particularly those developing and emerging markets. Recent years have seen the further proliferation of brands, as particularly evident within hotel companies such as Marriott, Hilton, Accor and Intercontinental Hotels Group. Roper (2018) relates that Marriott operates some 30 different brands and Accor 22 brands, each brand blue-printed on a set of market-focused criteria. Further, Roper rightly points to the rapid development of franchising and management contracts as such companies seek to move away from ‘bricks and mortar’ to more ‘asset-light’ approaches that encourage more rapid expansion into those new markets. At the same time we have seen new international competition to hotel companies from ‘hosting’ accommodation concepts and their websites, where individuals offer their own homes for rent via online platforms such as Airbnb and Homestay. All such developments have an impact on employment demand and practices, on managing that demand and therefore on managing the human resource effectively.

Other sectors within the hospitality industry have also seen change, and not always for the better. There have been a number of recent high-profile restaurant group and pub company failures, as businesses compete for the dining-out market in the face of competition from the home delivery concepts, whilst at the same time attempting to keep tabs on consumer diet and eating fashions. Today’s consumer and society in general may be concerned by a range of factors that relate to specific hospitality operations and provision: the level of obesity, alcohol consumption, life-threatening food allergies, sustainable food sourcing and production methods, the growth of vegetarianism, and the needs of those on a vegan diet and those with a coeliac condition (needing wheat-free, gluten-free food). In the UK for example, hospitality firms are currently being challenged by forthcoming rises in the National Minimum Wage (NMW) and for those over 25 years of age the National Living Wage (NLW), by the level of business rates for premises, as well as the uncertainty over Brexit in the economy and the effects on staffing in terms of recruitment of EU migrant workers. Many restaurants and cafes face competition from new directions as well, as in the growth of up-market ‘gastro-pubs’, providing fine dining and often a few luxury bedrooms as well. Any high street will show evidence of the rise in locations where hospitality is available, as in pop-up street food outlets, bookshops with coffee shops, florists with tea-rooms, even antique shops with their own hospitality facilities. There is tremendous demand for an ever-wider range of hospitality services, ‘but not as we know it!’.

Various different forms of business models and business formats are now common. Apart from simple owner-operated properties, other forms of operation include management contracts, management services agreements, franchising, voluntary chains or consortia, joint ventures, branded reservation services and combinations of two or more of these. In addition, subcontracting, outsourcing and offshoring alter significantly the traditional business models. Consumer access to hospitality businesses has also continued to evolve. In the past, potential customers may have relied upon classification systems (e.g. hotel star-ratings and restaurants with Michelin stars) and leading brands for ‘promises’ of quality in replicated products and services. Today, social media is at the heart of the business environment, with sites such as TripAdvisor and Booking.com playing a significant part in customer behaviour and post-visit feedback reviews. Many customers use one or more social networking platforms during their search, comparison and purchase process. And whilst brands play a vital role they are seriously challenged to deliver on their ‘promises’ by the social media. In addition, whilst hospitality operators have operated basic forms of ‘yield management’ for many years, the adoption and development of computerized hospitality-specific yield management systems have led to the need for new skills and, in many cases, modified organization structures.

All these developments have significant impact on the human resourcing of businesses. Shorter business and product life-cycles, changing business formats and brand concepts, flatter organization structures and the regular ‘churning’ of properties and their ownership means that lifelong careers, or even moderately long careers with one employer, are harder to encounter, being replaced by ‘portfolio’ careers and even portfolio jobs (i.e. two or more part-time jobs at the same time).

Hospitality industry economic contribution

The contributions made by the hospitality industry to this general rise in standard of living are considerable and varied, providing essential products and services, leisure services, large-scale employment and wealth creation. Tourism, of which the hospitality industry is a principal element, is now claimed to be the world’s fastest growing industry and also one of the leading earners of foreign currency. The World Travel and Tourism Council (WTTC) has reported that one in ten jobs across the globe is provided by the tourism industry (WTTC, 2017), also suggesting that shortages of skills and staff was the most urgent challenge facing the sector. The total value of tourism to the UK in 2017 was estimated to be £130 billion (UK Hospitality, 2018), providing the Treasury with £39 billion in taxation. Overseas visitors spend around £12 billion in foreign currency (People 1st, 2011). In 2014, a report for the then British Hospitality Association (now known as UK Hospitality) calculated that the hospitality industry alone was worth £57 billion to the UK’s gross domestic product (GDP), some 4% of the total GDP of the UK (Oxford Economics, 2015). In terms of employment contribution (see Table 1.1), and whilst acknowledging that the statistics vary between sources of data and because of what is included under the umbrella terms of tourism and hospitality, the Oxford Economics report (2015) puts the UK total employment in hospitality at 2.9 million, or 9% of the total UK workforce, statistics endorsed by UK Hospitality (2018) although at the later date putting the total number employed at 3.2 million and also suggesting that a further 2.8 million jobs are dependent on the industry indirectly (suppliers, producers and the like). It is also the case that recent years have seen growth in employment across the hospitality and tourism sector (see Table 1.1) despite the dynamic nature of the industry and the ‘churn’ of brands and companies in some areas.

Table 1.1 Employment across the hospitality and tourism sector (2009–2014)

Industries	2009	2014	Difference 2009–2014
Hotels	254,303	281,311	+11%
Holiday parks and other short-stay accommodation	61,453	81,024	+32%
Camp sites and other accommodation	28,389	29,011	+2%
Restaurants	620,424	803,638	+30%
Food and service management	183,109	196,804	+7%
Pubs, bars and nightclubs	336,707	340,215	+1%
Organization of conventions and trade shows	22,315	31,218	+40%
Tourist services	23,332	32,764	+40%
Museum and cultural attractions	57,475	63,437	+10%
Visitor attractions	299,070	295,727	-1%
Hospitality services	391,749	375,054	-4%
Hospitality and tourism total	2,278,326	2,530,203	+29%

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