Employer Branding for the Hospitality and Tourism Industry

Finding and Keeping Talent

Sjoerd Gehrels

• Publisher: Emerald Publishing Limited
• Year: 2019
• Print ISBN: 9781789730722, 9781789730708
• eBook ISBN: 9781789730715
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

Employer Branding (EB) aims to assist businesses in becoming the employer of choice for potential employees, and provides hands-on tools in attracting, developing and retaining people. Employer Branding for the Hospitality and Tourism Industry explores the potential of EB in changing approaches to managing people and improving opinions on careers in the hospitality sector. 

With a focus that goes beyond large companies, the book innovatively explores the possibilities of implementing EB methods within small-and medium-sized enterprises (SMEs) operating in the field of hospitality and tourism. Using international case studies taken from real world research, Gehrels highlights practical ways for companies in the hospitality and tourism sector to adopt EB strategies to best suit their business, employees and customers.  

For an industry with a high labour turnover and negative public image in terms of its employment practices, Employer Branding is more vital than ever in its ability to attract potential employees in a targeted and efficient manner. It is a must-read for both current and future practitioners, as well as for researchers and academics in the field of tourism, hospitality, branding and employment.

Chapter 1

Introducing Employer Branding: Potential for the Hospitality and Tourism Industry

Introduction

The hospitality and tourism industry is one of the fasted growing sectors worldwide both in business and employment (Cammio, 2018). Jobs are created on an ongoing basis from highly qualified to low skilled. In Europe there are an estimated 2.3 million enterprises in the hospitality and tourism industry (Eurostat, 2017). The total worldwide hospitality and tourism industry’s contribution to gross domestic product is anticipated to increase to $11.5 trillion (11.4%) in 2027 and in 2016 already accounted for almost 292 million jobs (10% of total worldwide jobs) (WTTC, 2017). The hospitality and tourism industry will support 380 million jobs by 2027, but experiences increasing challenges to attract qualified talent that can successfully deliver the best service to meet growing customer demands and business objectives (WTTC, 2015). Customers are increasingly critical because there is an almost unlimited transparent online travel, accommodation, events and F&B offer. Reviews are posted online through websites and social media making the business more vulnerable when quality is not up-to-par. This changing landscape makes it critical to have the right employees who can deal with the delivery of high-quality products and services in the hospitality and tourism industry. To deal with the challenges in the industry, a state-of-the-art approach to HRM is crucial. Employees only function at their best when they are really comfortable with their work situation, meaning they need to have control over their work to realise the company’s and their own objectives. Companies actively working on the happiness of their employees are more successful (Mes & Peper, 2018). In this chapter, employer branding as an approach to finding the right employees and keeping them (happy) is explored.

Background

Changes in global and local talent markets affect economies specifically in the hospitality and tourism industry. Without the right talented qualified employees to deliver quality customer service, a company is going to fail in the long term. Service employees can be seen as the connector between customers and company (Cammio, 2018). The Hospitality and tourism companies constantly seek for talented human capital (Walsh, Sturman, & Carroll, 2011). Human capital (employees’ knowledge, skills and abilities) although being intangible is a critical resource for a company to build its competitive advantage. One of the challenges for companies in the hospitality and tourism industry is the high rate of employee turnover. The industry in 2017 had a higher turnover rate (29.4%) than other industries (18.5% average) (CompData Surveys, 2017). High employee turnover incurs costs, estimated at 50% of the annual salary for entry-level employees and amounting to 250% for technical/leader-level employees (Hennig, 2017; LinkedIn, 2018). This calculation takes into account the loss of intellectual capital, client relationships, productivity, experience and other job skills, plus the cost of recruiting a new hire. The hospitality and tourism industry is likely to suffer from labour shortages because of ongoing growth and high employee turnover (CCIQ, 2016). Businesses from many countries experience shortages in qualified chefs, waiters, bar attendants, pastry cooks and managers. Labour and skills shortages are also caused by operational characteristics of the hospitality and tourism industry. It is labour intensive and in many cases has odd working hours, there is competition for labour from other sectors and a lack of recognition of on the job training by employers, and not enough industry involvement in education and training (CCIQ, 2016). Some of these causes are inherent to the industry making it difficult to combat them. There are, however, directions hospitality and tourism employers can take to have a direct impact on skills and labour shortages. The situation is urgent and important as, for example, it was calculated that in the UK, 1.3 million employees will have to be recruited by 2024, of whom 975,000 will be replacements for staff that have left. The other 325,000 are needed to deal with the expected growth in business (Caterer.com, 2016). Growth is a good thing, but increasing staff turnover is not. Shrinking labour supply driven by demographic changes in developed countries will cause a scarcity of human capital. Attracting talent becomes now more difficult than getting new customers in many industries and almost 65% of recently surveyed companies have positions open that cannot be fulfilled (Talmark, 2018). Increased competition between employers in different sectors is a consequence. The US faces a 0.5 negative balance between demand and supply of talent for the hospitality and tourism industry until 2024 (WTTC, 2015). Many other countries have the same challenge: UK –0.8 for hospitality and tourism (H&T) versus +0.2 for the overall economy (OE), France –0.8 H&T versus +0.5 OE, Italy –1.5 H&T versus +0.3 OE, Russia –2.3 H&T versus +0.3 OE and dramatically Thailand –3.7 H&T versus 0.0 OE. Some developed countries show better predictions because they are effectively incorporating immigrants into the hospitality and tourism workforce and put large investments into training and education (Australia and Germany 0.0 H&T vs + 0.3 OE and Norway +0.1 H&T vs +0.2 OE). But even with investments in ‘new’ citizens, the talent deficit now and in the future is obvious.

Employer Branding: A Different Approach

Human resources (HR) marketing, referred to as employer branding, can assist the hospitality and tourism industry in dealing with the challenges in finding talent. Employer branding is used as a strategy to differentiate a company as employer. A company’s employer brand is closely connected to its corporate and customer brands. Employer branding includes attractiveness to outsiders, and engagement and retention of talent. The challenges in finding and keeping talent were recognised by hospitality and tourism practitioners (Gehrels & De Looij, 2011). The majority of managers almost a decade ago had heard about employer branding but only a few had started to use it. Some professionals conceive employer branding as ‘job advertisement pimping’ instead of it being a strategy. It has become increasingly important for companies in the hospitality and tourism industry to consider setting up an employer branding strategy. Improving the image of the hospitality and tourism industry by implementing employer branding will increase its attractiveness. Employer branding not only applies to large branded companies but is also of interest to small and medium enterprises (SMEs). In this chapter, the importance and application of employer branding are explored. The central idea in employer branding is to create long-term preferences for hospitality employers amongst current and potential employees (Egerton-Vernon, 2017; Hall, 2016; Scholz, 2000). With the increasing shortage of talent, a lot of power in the labour market has moved from the buyers (employers) to the sellers (employees). In a sellers’ market, talented employees have relatively better bargaining positions making it important for employers to think from an employee’s point of view (Kayatz, 2006; SHRM, 2016). The British hospitality and tourism industry reports about an ongoing growth that presents an inevitable challenge for employers (Caterer.com, 2014). The hospitality and tourism industry has long suffered skills shortages and poor talent pipelines, particularly for skilled and management roles. During economic crisis, it may have been slightly easier for employers to hold on to great talent or become more able to grow talent from within. When the economy is on the rise and talent movement increases, employers face potential crisis. Whilst industry skills shortages can make life difficult for employers, it also stipulates the necessity to position themselves to ensure that they recruit and retain staff that fit their desired profile. The question for hospitality employers now is how to stand out from the crowd and to ensure the best and most relevant candidates come to them and get them on board. A key component is to have a strong and meaningful employer brand, something which an increasing number of hospitality employers are beginning to explore. Empirical proof of the added value introducing an employer brand can have was provided by one of the largest hotel groups worldwide Intercontinental Hotel Group (IHG). IHG stated that employer branding improved engagement and performance of its employees (Hickman, 2014). Engagement scores went up after implementing EB and IHG links it to guest satisfaction and financial results. Since the employer brand was introduced in 2009, engagement has risen from 60% to 81%. Company pride has risen to 94% (20% above the industry average), job satisfaction is 89% (13% above average) and 90% of staff would recommend IHG as a place to work (19% above average). High engagement scores are critically important and IHG identified a relationship between engagement and operating profits (Hickman, 2014). The difference in operating profit between hotels with highly engaged staff and those without is estimated to be as much as 7%. IHG has worked out that a 5% higher engagement score equals 70 $ cents increased revenue per available room per night. This means that a 200-room hotel could make more than $50,000 additional revenue per year by improving staff engagement. There are, unfortunately, still only limited number of studies on employer branding for the hospitality and tourism industry.

Employer Branding Advantages

Front-line employees are considered to be boundary spanners in the service experience (Wilson, Zeithaml, Bitner, & Gremler, 2016). Still, also the historical view persists that customers, when purchasing products, most of the time base their perceptions of products on the tangible features (Hur & Adler, 2011). In the process of purchasing services, however, customers perceive the practices of service employees as a key factor when evaluating the service provided. The most successful service companies are likely to pay more attention to the employees than being suggested in traditional management approaches (Kotler, Armstrong, Harris, & Piercy, 2017). As a result, providing attention to employees becomes one of the effective tools to stimulate service profits and growth since the employees are a key determinant of service companies. Defined as the ‘war for talent’, it was predicted a couple of years ago that a scarcity of qualified staff would arise due to globalisation, demographic and economic changes (Beechler & Woodward, 2009). For example, the European population ages 15–60 years will decrease from 62% to 49% by 2050 which will make the competition for companies to find and keep talent increasingly fierce (Backhaus, 2016). More recently, it is suggested that the ‘war for talent’ has changed into a ‘war on talent’. Some say that this ‘war on talent’ already has been lost by employers resulting in an increasing number of talents seeking self-employment or moving to other sectors (Chamorro-Premuzic & Yearsley, 2017). In China and India, and some parts of Europe and North America, a lack of higher-skilled employees is clearly visible (Dobbs, Lund, & Madgavkar, 2012). Employment structures of the hospitality and tourism industry make the situation more critical than for any other industries (Tag-Eldeen & El-Said, 2011).

A number of potential employees in the hospitality and tourism industry tend to look for overseas employment instead of searching for jobs at their own locations (Ivanovic & Blazevic, 2009). Effective human resources strategies are highly needed for the hospitality and tourism industry to compete with other industries and in order to secure high service quality, employee commitment, organisational performance and ultimately profitability (Nickson, 2007). An important HR strategy available is to work on profiling as an employer brand. Employer branding is a combination of marketing and recruitment practices allowing customers, employees and other stakeholders to recognise the desired organisation image (Wallace, Lings, Cameron, & Sheldon, 2013). In other words, the employer brand represents an organisation’s image as perceived by current and prospective employees. A company with an effective employer brand is more attractive amongst potential employees than those with lower employer brand perception. Employer branding helps organisations to leverage employees as ‘brand ambassadors’ when employees share their recognition stories over external social networks and in doing so contribute to a positive employer image (Lancaster, 2017). Positive stories tend to enhance the organisation’s potential employee candidate pool by being recognised as a great place to work (Ataya, 2016; Ference, 2012). When an employer brand is implemented, this has a number of advantages because it (Johnson & Roberts, 2006, p. 40):

• helps recruiting and retaining top talents for the company resulting in better service and productivity;
• creates substantial credibility for the company;
• decreases the difficulties and costs in recruiting;
• increases the number of suitable candidates;
• enhances the company’s reputation;
• energises the current employees to achieve the organisation’s goals; and
• leads to a higher degree of company loyalty improving employee retention.

Importance of Employer Branding

Different ideas about employer branding and its definition exist. Examples of the different definitions are in use, such as employer branding is having a good recruitment website or employer branding is being active on social media. Another view on employer branding is that it is about having expensive commercials to recruit new employees. These ideas, however, do not comply with the first definition of employer branding (Ambler & Barrow, 1996, p. 187): ‘The package of functional, economic and psychological benefits provided by employment and identified with the employing company’. Further research added the notion that employer branding is not just about recruiting new employees, but also about keeping employees in the company (Harris & Short, 2014; Waasdorp, Hemminga, & Roest, 2012). Keeping talented employees is expected to be the biggest challenge for the coming years (Schmidt, 2016). In employer branding it is crucial to obtain and keep an authentic and distinctive preferred position as employer in the mind-set of employees and to influence them with the aim of both recruiting and keeping the right employees. This can be reached by making sure that employees prefer the company above others. Employer branding is about managing corporate identity, in and outside the company. Therefore it is important to create an organisational image that presents the organisation as a distinct and desirable employer (Backhaus & Tikoo, 2004). To create this image of being a good employer and thus workplace, it is the starting point to know what is interesting and attractive about the company after which the message can be spread (Redactie, 2013a). Simultaneously, it is important that an employer is confident that corporate brand, customer brand and employer brand are interrelated (Minchington, 2007). Otherwise, messages communicated internally and externally can be contradicting each other, which makes it for potential employees and for customers hard to know what to believe about the company. In order to create a company image as an employer and communicate that externally, the HR and the communication/marketing functions should work together, in order to define and implement an employer brand strategy (Ambler & Barrow, 1996). In view of talent scarcity, organisations should take the employer branding activities to the same level of importance as their corporate branding activities (Sengupta, Bamel, & Singh, 2015).

To re-emphasise, employer branding is about giving an identity, image and distinctiveness to a company as an employer in order to attract potential employees and to motivate, engage and retain current employees (Ataya, 2016; Srivastava & Bhatnagar, 2010). An employer brand strategy is useful for large and small companies, as every company needs to attract and retain employees. Developing a good brand image is generally easier for large companies (Torrington, Hall, & Taylor, 2017). SMEs can, however, also very well adopt the principles of employer branding in their companies and some already have started to do so (Gehrels & Altan, 2015). Potential employees base their decisions on their general impression of the attractiveness of a company (Phillips & Gully, 2014). Feeling part of a company with a strong employer brand strengthens employees’ self-esteem and company identification (Lievens, 2007; LinkedIn, 2012). Therefore, it is important to put effort in creating and maintaining the image of being an attractive employer (Wallace et al., 2013). The higher the level of external recognition, the easier it becomes to attract skilled job seekers to the company (Bouchikhi & Kimberly, 2008). A fully incorporated employer brand strategy in a company in the hospitality and tourism industry will also have a major impact on its service delivery (Gehrels & De Looij, 2011). Service delivery will be impacted due to the fact that employees who feel connected to the company will work harder and better to make the company a success, as they will identify themselves more with the company. It can be concluded that employer branding is of great importance for hospitality and tourism companies as it helps to attract skilled job seekers and improves the delivered service. Some success factors for successful employer branding implementing are highly empathetic management, flat hierarchies and a lot of individual responsibility (Hennig, 2017).

Process and Involvement in Employer Branding

When knowing the definition and importance of employer branding, the following question arises: ‘What does the process of employer branding involve?’ After thoroughly understanding the EB process, an employer can start approaching potential employees in an appealing way and different from competitors. The basis of an employer branding strategy is a unique value proposition. By knowing and understanding its unique value proposition a company can easily spread an attractive message to the labour market and its current employees (Forbes, 2018; Torrington et al., 2017). In addition, it is important to be clear, consistent and honest when communicating the company message (Redactie, 2013b). Clarity stands for the communication of a transparent message that is understandable for everyone, keeping in mind ‘less is more’. Consistency: it is important to keep in line with the message that is communicated so that potential employees know what to expect and that the company delivers on its promise. If the message is changed every month or year, potential talent does not know what to expect from the employer. Last aspect mentioned is to be honest. When an employer communicates a fake identity, job seekers will be attracted to the company on false premises. When not being honest, a company does not only lose the applicants but also the company’s image, which will lead to a high turnover and unsatisfied employees (Torrington et al., 2017; Tran, 2015). A successful empl...

Table of contents

• Cover
• Title
• Chapter 1. Introducing Employer Branding: Potential for the Hospitality and Tourism Industry
• Chapter 2. Employer Branding – A Historical Perspective
• Chapter 3. Sustainability and Employer Branding
• Chapter 4. Hospitableness in Human Resources Management
• Chapter 5. Pelican Hotels & Resorts’ Considerations for the Future
• Chapter 6. Employees as the Brand: Internal Marketing at the Sanctuary Hotel
• Chapter 7. Culture Influencing Employer Branding
• Chapter 8. Developing Employer Branding in Pegasus Hotel
• Chapter 9. Great Place to Work®
• Chapter 10. Human Capital a Reality Check
• Chapter 11. SMEs and Finding Well-educated Candidates
• Chapter 12. Employer Branding Through Social Media and Websites
• References
• Index