The hotel industry in Australia has undergone significant flux and turbulence since the mid 90s. The Asian financial crises of 1998 resulted in a drop of 8.2%. The industry was able to nearly recover and maintain its performance for the next three years, but the cataclysmic events of September 2001 and the oversupply of hotel rooms in the two main feeder markets, Sydney and Melbourne, built in response to the 2000 Olympics contributed to a significant downturn in occupancy and yield in all segments. In addition, the combination of these events has had industry altering consequences for domestic and international travel. In light of these circumstances the main issue facing the industry is how it can now react proactively to future “emergent turbulences”.
Attracting talent to the hospitality industry is challenging at the best of times. In today’s global candidate-short market, a refined recruitment policy has become a strategic imperative in order to remain competitive. In Australia, selected hospitality organisations have adopted a planned approach to recruitment to offset the high recruitment and retention rates inherently associated with an ‘ad-hoc’ approach. The Australian Human Resource Magazine (2005, Issue 79) claims that the estimated recruitment cost of a mid-level manager can be as much as $15,000 and there is no guarantee that the employee will last more than 6 months. Cascio (1999) suggests that strategic recruitment starts with a clear statement of objectives, based on the types of knowledge, skills, abilities, and other determinants that a company presently needs to compete within a dynamic industry such as hospitality.
Given the above, it is no wonder that hospitality is a tough field for recruitment. Management and front-line candidates have complex skill-sets that are relatively uncommon and good talent is hard to find and tends to disappear from the market very quickly. The Strategic Finance Journal (2003) suggests that over 80% of employee turnover costs are due to ineffective recruitment practices. We argue that a strategic perspective to recruitment creates the ability to acquire and retain the best talent in the business and stay ahead of the game.
Recruitment is a form of business competition. Just as hotels compete to delight their guests and aim to offer to heighten the guest experience, hotels should also compete to identify, attract, and hire the most qualified and suitable people. It demands serious attention from management, for any business strategy will falter without the talent to execute it.
Strategic recruitment planning offers hospitality companies the “peace of business mind” and ability to select a recruitment and selection framework that will build on the quality and effectiveness of its management and workforce. Key areas such as succession planning, effective retention programs and measurable incentive plans contribute greatly to the structure around how the organisation measures its recruitment objectives, whilst reducing long-term organisational paralysis caused by ineffective selection practices.
We have observed a number of Australian hospitality organisations adopting a strategic recruitment and selection process coupled with measurable outcomes. They have developed and refined their own recruitment best practice guidelines that are directly related to long-term customer loyalty, the intrinsic cost of recruitment and increased staff retention rates. A best practice for recruitment and selection is acquired know-how or demonstrated experience that has proven to be valuable or effective within one organisation and that may have applicability to other organisations in the same industry.
By incorporating best practice principles, the hospitality industry has identified what distinguishes the most successful hospitality operators from the rest. Best practice champions demonstrate a strong ability to expand on their exceptional reputation by engaging in a relentless search for staff who share their passion to heighten the guest experience. While examples can be found in all areas of the industry, the key aspect in defining best practice puts the guest at the core of its service processes. Several authors have shown that a customer’s evaluation of a hotel and their decision to patronise it, depend less on what services are provided, but rather more on how the operator goes about delivering on the many aspects of the service experience being purchased. That includes the organisation and management of staff, the information systems, the hotel/facility configuration, the hotel environment and other resources made available. Each of these adds importance to guest satisfaction and repeat business.
Human resource professionals and hiring managers should do much more that fill vacancies. They should also assess recruitment policies, conduct job analysis and tactics, develop effective retention processes and improve on return on human investment (ROHI), before posting vacancies within or outside the company. By linking all recruitment and selection activities the manager can add significantly to the achievement of best practice. Adopting a pro-active and planned approach to target the right candidate for the right opportunity gives the organisation a greater understanding how to manage a best practice framework.In Australia there is a strong preference among hospitality organisations to find new talent with electronic job boards. The leading job-boards are SEEK, MyCareer and CareerOne, who constitute over 95% of all web-based vacancies in Australia and New Zealand. While this medium may indeed attract a vast number of candidates, Manhattan Group research has shown that only 6% of these candidates are typically chosen to be short-listed for any positions listed with the host organisation. The best candidates continue to be sourced through industry channels such as networking, promotional activities, industry rankings and positive press. Recently, after the presentation of a leading resort on national Australian TV, a remote resort in Western Australia attracted over 17,500 applications over 1 week. Hotel schools continue to be leading avenue of suitable recruits, although they are less used today. Staff can be obtained through final-year hotel school presentations, participating in job fairs or by sponsoring an annual scholarship. However, all these efforts can only be truly successful and efficient, if organisations first set up a documented succession planning process, a clear career identification process, a coaching and mentoring process and a participative leadership style.
The three steps of successful recruitment
1. Go internal first.
Before going outside the organisation a succession planning process for all level of management and employees should exist. This should be a formalised process where job analysis and job specifications should form the framework for the manager to be guided by. In turn this will facilitate an increase in retention rates as the organisation grows and the appropriate and tested individuals can be slotted in accordingly.
2. Have a positive image in the market place.
As companies grow new talent is often necessary to boost the number of competent staff. Possible recruitment forming strategic alliances with hotel schools and/or trade schools. This is a strategic process which takes planning, initiative, and foresight. While this practice was prevalent in the 70s and 80s it appears to be neglected today.
3. How do you manage your staff?
The ego-centric management style of the 1990s is giving way to one demanding innovation and creativity in attracting the best recruits. Action-centred recruitment provides this creativity and management depth. The successful companies of the future will be those who have developed excellence in products or services, together with managerial recruitment of superior quality and depth.
Hospitality companies have been using emotional intelligence (EI) to strengthen the recruitment and selection process. This method identifies the relationship qualities needed by candidates to be successful as an individual in the company and perform within groups. Emotional intelligence’s strong emphasis in social skills offers the individual a vehicle to deliver on the full potential of the team to exceed organisational and individual objectives. Emotional intelligence provides a criterion for individuals to measure such qualities as group effectiveness, individual achievement, interpersonal skills as well as succession planning. While EI is not new, in the mid 1990s Daniel Goleman expanded the concept of Emotional Intelligence as consisting of five traits/components. Self-awareness, self-regulation, motivation, empathy as well as social skill. When incorporated into the recruitment and selection process, it offers significant insight into how well the individual will achieve organisational objectives as well as develop a rewarding career in the organisation.
Considering the main message of EI is based on creating performance-based, effective work groups, it is imperative that management should not focus solely on immediate financial and operational results, instead, a manager must understand that a long-term investment in human capital is necessary before a profitable return can be achieved. Only a balanced (financial and non-financial) approach will foster sustainable growth for the organisation. Leading hotel companies such as Four Seasons and Ritz-Carlton have long followed the strategy that the only control a hotel has on the guest’s experience (i.e. the product and service) is employees’ motivation and attitude. This is applicable to all levels of hotels, independent of their ranking.
Since even the most detailed set of standards cannot ensure consistent service delivery, the organisation needs to hire people who are motivated to serve the guest. Technical skills can be taught to employees, but without the right employee attitude and motivation, the guest still may leave unsatisfied. Besides formal training, employees learn by example from managers’ behaviour. Managers build an environment based on respect and leadership that allows the employees, with confidence, to ensure that superior service is being delivered with the passion needed today in order to delight and retain that most precious of guests, the repeat guest.