Note: All amounts are medians.
Source: Horwath International.
As an illustration of this approach, a comparative study of middle-range hotels in Germany and the United Kingdom discovered that German hotel workers are generally better-trained and vocationally accredited, have greater skills flexibility and exercise far broader discretionary authority than their British counterparts (Prais, 1989). Additionally German hotels appear to utilise more systematic work processes, have lower turnover rates and staffing levels, their managers focus on longer-term human resource planning and marketing strategies, and are enthusiastic about the implementation of minor technological systems (eg user-friendly building design; comprehensive computer systems; industrial, rather than domestic, vacuum cleaners, etc). Not surprisingly then, this study found that the labour productivity of German hotels was between one and half to two times higher than in British hotels. Despite generally higher wages in German hotels, room prices were 20% lower than their United Kingdom counterparts.
So neither labour costs alone, nor staffing ratios alone, are sufficient to account for the comparative competitiveness of the hotel industry. A similar study in Singapore hotels (Debrah, 1991) confirms the global dilemma faced by the industry, that: “we cannot afford to continue to manage hotels in Singapore the same way we are managing today.”
The State of Human Resource Management in the Australian Hotel industry
As indicated, the hotel industry in Australia appears to be considerably less productive and less profitable than many of its overseas counterparts. Some of the problems can be traced to the turbulence of the Australian domestic economy, industrial relations factors, tourist choices and internal supply/demand fluctuations.
However, significant difficulties exist within industry operations and management styles which contribute to the current state of malaise. The dearth of historic industry research, perceptions of industry leaders and individual hotel management have been relevant in the failure of the industry to date to face its fundamental and crucial problems. The earlier cited studies (Horwath; Prais, Jarvis and Wagner; AWIRS) all conclude that industry productivity and international competitiveness directly relate to the efficacy of the industry’s management of their workforce.
Simple solutions would suggest the ruthless reduction of the workforce, immediate and significant skills and conditions flexibilities, massive technological change and close scrutiny of financial management. Timo suggests that some of these approaches are already being implemented: “Because the level of demand for such services is highly volatile, unpredictable and perishable, management strategy has increasingly focused upon the extension of labour antiflexible specialisation through a complex process of deskilling and reskilling” (Timo, 1992). He warns, however, that these processes, combined with the use of increasing numbers of transient or short-term visa employees “…engender higher turnover…and retard skill formation for some occupations…” (Timo, 1992). In order then for the Australian hotel industry to regain its competitive position, hotel managers and industry leaders need to focus on the most effective ways of improving productivity levels, including the reduction of overall labour costs, value-added skills development and the avoidance of expensive wastage and turnover levels, realistically within the Australian socioeconomic and industrial relations context. Such strategies require attention to a broad range of human resource management practices within a long-range plan for development.
The hotel industry is perhaps the least advanced of all industries in its use and integration of modern human resource management activities. A recent study (Nankervis, 1991) found that, whilst most hotels surveyed, did in fact have a designated position as Personnel/Human Resource Manager, Training Manager, or some esoteric combination, few utilise innovative recruitment methods (eg relationships with hotel training colleges, secondary schools, older and / or disabled employees); management development, career or succession planning; performance management systems, flexible salary programmes or applied wastage/labour turnover studies.
Service Standards
Perhaps even more importantly, whilst most hotels possess general mission/vision statements, hardly any operationalise their definitions of “service” into behavioural standards for housekeeping, front-of-house, and food and beverage occupations. Most appear to focus on general qualities such as the “friendliness”, “refinement”, “spontaneity” or “consistency” of staff.
Whilst it is not suggested that hotels should adopt standardised, rigid McDonalds-style patter, the absence of specific behavioural standards impacts on recruitment/selection accuracy, training and skills development programmes, appraisal and rewards systems. It also largely precludes consistency and hence the fulfilment of guest expectations, especially in four- and five-star establishments. The development of national competency standards and benchmarks for service occupations by Tourism Training Australia and the National Training Board is a step in the right direction, as a basic skills expectation, nationally accredited. It does not, however, preclude individual hotels from adding value to their own staff, by defining additional specific behaviours relevant to their unique ambience. Failure to do so imposes constraints on quality service and hinders subsequent employee development, appraisal and appropriate remuneration, and thence enhanced productivity levels.
In the current industrial relations and labour market climate significant opportunities exist for proactive hotel, and human resource managers to recruit more selectively; create considerable skills flexibility coupled with subsequent training and career development opportunities; and free up the historic inflexibility of hotel employees’ salary systems.
Recruiting Opportunities and Options
For effective exploitation of the increased numbers and varied experience of the Australian labour market in the 1990s, more innovative recruitment strategies require consideration. As earlier indicated, the predominance of casual or part-time and female workers especially in service occupations (eg front office, housekeeping, food and beverage), may reflect traditional, rather than necessarily effective, sources of hotel staff. Recent increases in the supply of trained and accredited hotel employees through TAFE colleges, private hotel schools and training establishments, certainly provide a wider and more secure source of staff. However, it may be additionally useful for hotel recruiters to consider broader options such as developing ongoing relationships with hotel schools, local secondary schools and even sources of disabled, or older, mature and generically experienced workers. In a different labour market, some Singaporean (Debrah, 1991) and German (Prais, 1989) hotels consciously seek out more mature workers for highly specialised, and sensitive, positions such as concierges, front-of-house receptionists and guest liaison. Some writers (Tanke, 1990, Heskett, 1990, Zeithaml, 1990) suggest that North American trends in hotel employment are increasingly focused on “older” employees, especially 25-34 year old, and disabled workers, due to their low turnover and higher productivity rates (Tanke, 1990). In a scarce labour market, Singapore hotels are even resorting to “bring a friend” incentives and cash rewards for referral. On the other hand, “boutique” or resort hotels may prefer to recruit younger staff for easier assimilation with hotel philosophy and guest markets.
The point here, however, is that recruitment and selection practices should reflect actual expected occupational standards and overall management philosophies. (Figure 3 indicates the current use of recruitment practices in Australian hotels. More use of appropriate applicant testing schemes, site tours and probationary periods may yield considerable benefits to potential employers). Innovative sources and recruitment practices will ensure value-added recruits who are already oriented to the demands and opportunities of a career within the hotel industry.
Industry Promotion and Institutional Development
Associated with innovative, and focused recruitment programmes, the hotel industry would be well-advised to adopt more strategic industry and individual hotel campaigns to apprise prospective employees of the future opportunities offered by the industry. Many regional and resort hotels already operate community-based programmes emphasising their local involvement and investments (Blackwell, 1989). The tourism industry and its leaders have also significantly reversed the traditionally unattractive image of occupations in the hotel industry by media campaigns, work-experience programmes and career advice.
The Australian industry shares perhaps some of the perceptions noted by a Singaporean researcher: “…serving people has traditionally been perceived as degrading work in Chinese culture… low social status. There is also a moral element. Many conservative parents do not want their children to work in hotels. Similarly many men do not want their wives to work in hotels. These people see hotel jobs as one step from working in a night club” (Debrah, 1991). However, the semi-skilled nature of many such jobs and the relative absence of true career paths within this industry may still act as a disadvantage for potentially valuable recruits. This continuing perception of hotel occupations, overcome by necessity in recessionary times, can be addressed by both ongoing and broad industry promotional campaigns, and the development of human resource management programmes post-recruitment aimed at career paths, job rot