Business landscapes across the world continue to shift and refocus as companies reevaluate which employment techniques will be the most effective in the new economy. The things that employees value are changing as well and employers need to do their best to address their employees’ goals and longevity. This holds true especially in hotels and the rest of the hospitality industry.
500 Foot View – Changes in Hospitality Force HR to Become Strategic
Human Resources is more susceptible to change than other aspects of business because HR is completely inseparable from the employees. As workers retire and new employees come on board, a company’s HR department must strive to reflect the goals of the employees that they represent. The hospitality industry has faced uncertain times in recent years, and an HR department’s role in hotels must quickly adapt to the new requirements that it must address. HR departments in the hospitality industry hold a unique crystal ball into the future behaviors and makeup of the workforce, serving as an early indication of things to come because hospitality workers are typically very young when compared to other industries.
Research from the U.S. Bureau of Labor and Statistics (BLS) shows that 33.2 percent of the people in the U.S. Hospitality workforce are under 24 years of age. That means that these employees are highly susceptible to societal changes, and business leaders are still figuring out exactly how to attract workers of this age range to their hospitality businesses. But beyond just attraction, the increased challenge entails maintaining sustainable retention levels, consistent high workplace engagement, and overall increased performance and productivity from a workforce that is more informed, more empowered, and more sought after than previous generations.
These facts fundamentally expand the role of the HR professional and the HR function and permanently shifts it to strategic HR. With early access to the new generation and younger talent pool, there exists a unique opportunity to leverage incoming skillsets, high enthusiasm, and fresh ideas prior to most other industries where a great talent management program can lock in best-in-class future leaders especially those already keen to join the hospitality industry. Meanwhile, 49 percent of HR professionals confessed they were without a plan or idea on how to be more strategic. 39 percent said that there existed barriers to becoming strategic, even as 90 percent acknowledge that these strategic opportunities existed.
The Financial Burden of Employee Turnover
Focusing efforts on how to attract and maintain younger workers is a worthy goal for business and HR leaders because the cost of finding and training new workers is quickly rising. The 2017 Employee Retention Report from the Work Institute highlights the high cost of worker turnover.
According to the report’s findings, today’s companies are spending up to 33 percent of an employee’s annual salary to replace them. That’s a significant cost for any business, and it’s one that many of them simply cannot afford, particularly independently owned hotels, venues, and restaurants with limited or no working capital buffer.
The most pressing problems in the hospitality industry are all related to issues of employment. The top concern that is commonly highlighted by hospitality professionals is the distinct lack of trained employees and a drying pipeline of qualified entry-level staff. Many jobs in the hospitality industry do not pay as well as jobs in other sectors, and so it can be difficult to incentivize employees to stay. But there exist many ways to supplement fair wages, which is not the top priority of many entry-level or young talent as long as the entire value proposition is fair and addresses their needs and motivations.
Upgrading Hotel HR to People Operations: A Focus on Culture + Motivation
We’ve written before on the evolution of strategic or traditional HR to People Operations, and how many business leaders and traditional HR experts are establishing People & Culture departments across whole swathes of industries where once it was believed the data-driven and employee as internal customer approach was isolated only to tech companies. The hotel and hospitality industry stands to benefit the most from the upgrade where newly minted People & Culture departments who once settled on high turnover rate as a standard immutable cost of doing business can look to their company’s culture as a driving force to increase employee retention and the application of data-backed insight to unlock tremendous value in their people management.
It’s All About Alignment
By focusing the company culture on messaging that aligns with the value and motivation structure of younger employees, a business can boost their retention rate and have a well-trained, highly engaged pool of talent ready to in turn, provide the absolute best service to their customers with long-tail benefits that funnel down to the health of the enterprise’s bottom-line. You can not have a newly redefined customer-centric organization without also including your employees as part of that expanded definition and focus.
If an employee believes that the company they work for understands them and has their best interests in mind, then that employee will be happier and more engaged in the workplace. Happy and engaged employees tend to stick around longer, even if they are unsatisfied with their salary. Data and people analytics can take it further and give you access to the lifetime value of an engaged employee (ELTV) and the contribution to your sales, customer satisfaction rating, and reduction in legal and employment-related costs over time.
Instant Feedback Reveals Rift between Internal Culture and Public Identity
Refocusing a hospitality company’s culture is a difficult thing to do because hospitality companies are very public, and their culture is often wrapped up with their public identity. Though difficult, these changes should never be delayed, because all companies need reliable and skilled staff in order to operate effectively. A newly launched Talent Attraction campaign that eventually evolves into a self-sustaining system enshrined into company value, can succeed amazingly well if honest and transparent. Bad experiences are only a Facebook Live video, Tweet, or Instagram story away from making national news or trending 1000 miles away to a couple who just walked away from that “Book Now” button.
Career Development as a Motivator
When looking at how to adjust a company’s culture to resonate with a new generation of workers, expect a good amount of research to come with it. Younger workers also want to have a say and, they will seek out mentors. Programs that match younger employees with those who are more experienced is a great way to reinforce company values and show employees that they are valued by the company. But this must also be tied to professional, leadership, and/or management development programs. When interviewing candidates, you’re not just looking for culture fit, but also value fit and motivation fit to ensure that the new wave of future leaders of your company are there for the right reasons as long as you can, in turn, provide the opportunity to satisfy those reasons.
Benefits as a Competitive Advantage
Benefits and incentives are another great way to keep people on board, but these they must be carefully thought out so that they are tailored to the mindset of the new generation and surrounding community. Looking at other successful company cultures and why they work is a solid plan for developing your own program to fit in with the changing pace of the hospitality industry and overall talent marketplace. This is where a company can truly be creative and showcase their differentiators and their unique brand identity.
Revisiting Technology + Training Programs
Technology too has grown in lock-step with the strategic HR and people operations movement to tackle many of the traditional ills of people management yet very few leaders have the time or resources to source, implement, train staff, and then effectively leverage their use to fully unseal the promised value proposition. An entire niche market of hospitality oriented software has sprung up in the last decade to replace legacy software that was never built or tailored for specific industries. South Florida boutique hotels are using the same HRIS, payroll, or ATS software as regional Detroit hospitals or Texas based national energy conglomerates that are not suited to their goals or the needs of their talent pool.
Realizing the Value of a Generation of Digital Natives
The new generation of talent and your young leaders will come in as digital natives and be highly tech-savvy, ready not only to quickly learn and deploy the full powers of your internal tech solutions but also take advantage of the previously mentioned social media channels as tools to rapidly spread the word of their amazing team members, managers, and workplace culture. And yes, your customers are seeing that too. But this 61 million strong workforce that will bring on a massive paradigm shift in the workplace will also still need new forms of training many companies are not yet prepared to provide. To be so digitally astute, sacrifices had to be made in the departments of face-to-face interaction, emotional intelligence, and interpersonal communication. That’s right, the very bedrock soft skills the hospitality and hotel industry are highly dependant on. People Operations has as two of its core levers for change, the effective deployment of technology and the establishment of growth-oriented training and development programs with trackable ROI directly linked to specific objectives.
Augmenting the People & Culture Function in the Hospitality Industry
Many businesses in the hospitality sector employ outside expertise when looking to shape up or build out their new People & Culture department, a strategy being implemented by 49 percent of global CEOs across all industries who in a 2018 PWC survey said they would be partnering up with outside firms to help build strategies and tactics to attract top talent to some extent and another 30 percent said to a large extent. The war and race for talent are at everyone’s doorstep and will only quicken in the face of mounting competition in a tightening job market. People Operations experts can save companies a lot of time and money by cutting through ill-advised tactics and figuring out tailor-made effective, creative, and data-driven game plans. These plans, when executed well, will cut training costs and boost employee retention, with the ability to enhance or build out your Talent Attraction program, candidate pipeline, company branding, diversity and inclusion, compliance, technology stack, and training and development apparatus. The business is then able to focus on providing worthwhile work experience to their dedicated employees and delivering the highest levels of delight to their customers, both internal and external.
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- Primer on HR & People Ops in Hospitality and the Hotel Industry - October 11, 2018