The Future of Hospitality Work: Three Questions for Industry Leaders
By Bruce Tracey Professor of Management, Cornell University's School of Hotel Administration | April 14, 2019
Co-authored by Michael Warech, Founder & President, Warech Associates, LLC
This past November, an article was published in HR Executive Magazine online that discussed how the future of work (FoW) has become top of mind for leaders who are wrestling with how to best prepare their organizations for a future that is getting more and more difficult to predict. This article described the FoW as the "realization that dizzying advances in technology, coupled with significant changes in workforce demographics and required skill sets, necessitates a widespread overhaul not only of our organizations, but of the very definition of work itself".
The article highlights critical areas that will need attending to, including a company's brand, harnessing agile pools of talent, requirements for new and different skills, a redefined concept of leadership, and powerful tools and technology. Finally, the article paints a vivid picture of what such an organization will look like and how it will operate in 2023.
So, what does this mean for the hospitality sector, given some of the well-known inherent challenges in this space? In this piece, we focus on some of the implications of FoW for the hospitality industry, and present three questions that can be used by organizations as they adopt the necessary strategies, tactics, and practices to support FoW.
The Good News
On a macro-economic level, the hospitality industry plays a significant role in driving GDP in developed and emerging markets around the globe. Indeed, as a key component of the travel sector, the hospitality industry has demonstrated impressive growth worldwide over the past several decades, and a similar trajectory is forecasted for the next several. The industry also offers substantive investment opportunities – both public and private – as well as numerous opportunities for entrepreneurs and start-ups.
The industry also offers a wide array of social benefits. Hospitality is about prioritizing and taking care of the needs of others. Serving delicious and nutritious food, providing clean and comfortable accommodations, and ensuring efficient, safe transportation creates positive guest experiences, which in turn, cultivates broader good will – good service begets good service. The industry also reflects and embraces diversity on an enormous scale – from the amazing variety of restaurant and hotel concepts that reflect the unique nature of the local culture, to the wide array of customer needs that firms must consider in order to deliver a positive, memorable experience that they will share with others.
Finally, many hospitality companies have taken a leading role in addressing some of the most unfortunate and ugly challenges that our world faces – from feeding and housing the homeless, to preventing human trafficking. Hats off!
The Not So Good News
Despite the positive features outlined above, there is one key and (obvious?) challenge that makes it very difficult to be successful in the hospitality industry, especially on a long-term basis – people, which is somewhat ironic given the nature of the business. Of course, the hospitality industry is no different than other labor-intensive settings in terms of the importance of attracting and retaining the best talent possible. However, unlike other industries, hospitality has an image problem. A vast number of the jobs are entry-level and do not require a high-level of skill. As such, wages are comparatively low, so many individuals use their initial industry experience as a stepping stone to pursue other types of employment.
Additionally, since many hospitality firms are 24-hour operations, these same low-skill, low-wage employees must work on weekends and holidays, complete repetitive tasks that are physically demanding, and are asked to park their personalities at the door and pretend to really enjoy interacting with guests who may not be particularly understanding or respectful. These realities do not paint a very attractive or compelling picture about working in the hospitality industry, and the situation doesn't appear to be improving anytime soon.
To address this vexing and ubiquitous challenge, we offer three questions that can be used to guide decision-making and problem-solving efforts that address the industry's on-going image problem and ensure that the future of the HR function serves the firm's strategic and operational needs efficiently and effectively, in the context of FoW.
1. What is the real role of human resources in your company's mission, vision, strategy, and value proposition?
This question points to leadership. Every hospitality firm uses some sort of "people first" rhetoric in its external and internal messaging, and successful firms will demonstrate a commitment to this rhetoric in several obvious ways. First, if people are truly important, then in light of the image challenges noted above, leaders will be very considered in their efforts to paint a compelling vision of the future. The last thing you want to do is over-sell and under-deliver.
So, in addition to the typical strategic messaging that addresses the priorities for each of the firm's key stakeholders, leaders also need to acknowledge the industry's image problems and frame their company's future accordingly. It's a matter of taking our proverbial lemons and turning them into lemonade. Highlighting and branding some of the positive themes noted above offers a starting point. Ultimately, and most importantly, the consumer-facing brand must be consistent with the organization's culture and employee experience.
Additionally, and to support the firm's commitment to people, many hospitality companies will, smartly, continue to invest in the HR function. The most effective efforts will integrate policies and practices associated with high-performance HR systems, such as highly selective hiring practices, continuous learning and professional development opportunities, and comprehensive total rewards programs that promote high levels of performance, engagement and retention. Of course, all of these activities and related investments will be scrutinized closely because the enlightened leaders know the importance of accountability.
However, the pursuit of high-performance work systems is expensive, even for organizations with healthy financial margins. Additionally, such systems are generally complex and as such, difficult to change. And for the low-margin operations that characterize many of our industry segments (e.g., quick-serve and quick-casual restaurants), a highly-developed HR infrastructure may simply be a pipedream. Moreover, in light of extraordinarily tight labor conditions in markets worldwide – many of which are more like labor puddles that are evaporating quickly – and high turnover rates in many industry segments, hospitality leaders and managers are rightly reluctant to spend money on individuals who are not necessarily cream-of-the-crop and likely to be gone in six months. This leads to our second question.
2. How can your human resources be leveraged more effectively?
Even firms on multiple 'most-admired companies' lists have room for improvement. However, you can't be all things to all people, and as such, flexibility and the ability to place smart bets will play an increasingly significant role in your HR strategy. For example, an increasing number of non-standard work arrangements have evolved (e.g., compressed work weeks, part-time telecommuting, job sharing, etc.) and seem to be well suited for those who are drawn to the ever expanding part-time, 'gig' economy. Pursuing some of these on-demand or agile talent arrangements may offer some viable options for addressing the ongoing labor challenges that the hospitality industry will continue to face.
Another form of flexibility stems from the nature of work that we ask people to do. As noted above, the nature of work (and the work context/environment) in many hospitality settings is not particularly attractive. In response, companies have begun to restructure many of the typically narrow entry-level operational jobs (e.g., front desk agent/receptionist, server, prep cook, etc.) to include cross-functional, and, in some cases, supervisory, responsibilities that have been found to be quite attractive to those with higher skill sets (and professional ambitions).
Thus, fewer and more talented individuals can now complete the work that is typically handled by more but less talented individuals (with commensurate compensation, of course). It is important to note, here, that such restructuring of work arrangements may necessitate the requirement for new and different skill sets, including constructs like abstract thinking, collective decision making, multitasking, and data literacy.
Unfortunately, even efforts to provide flexible, enriching work opportunities (as well as the other actions noted above) may not be enough to fulfill your human capital needs and attract and keep top talent. Thus, consideration beyond the HR function is needed, and this leads to the last question.
3. What are the complementary resources for supporting your HR needs?
This question points to the growing importance of technology. Despite best efforts to promote and support a progressive HR function, many firms are still faced with enormous challenges that won't be met by adding more bodies, regardless of how capable those bodies may be. Thus, hospitality firms have been looking with earnest to find technology solutions for addressing some of their most pressing HR challenges.
Technology is already replacing the need for humans in many hospitality settings – from automated check-in/check-out systems to cleaning robots and digital food processing machines. These types of solutions will continue to evolve and play an increasingly important role in addressing the industry's ongoing labor challenges. However, technology does not always replace humans and/or the need for labor. In some cases, new technology may increase the need for more bodies (e.g., food ordering platforms such as Grubhub and Uber Eats have been shown to increase the need for food production employees in many fast food restaurants).
Moreover, new types of human-based work will be needed as new technologies come online (e.g., software and hardware specialists who oversee the automated check-in/check-out systems). These changes will evolve quickly, so hospitality leaders will need to pay focused attention on technology options that can address their HR needs. The infusion of emerging smart technology and the resulting creation of new types of work will directly address many of the industry's most immediate HR priorities and also has the potential to polish the industry's image along the way.
So, in the end, the human capital challenge for the hospitality sector continues to loom large. Changing the image of our industry will continue to be tough and will certainly not be for the faint of heart. Failing to recognize and leverage the impending changes being brought on by the FoW, is short-sighted at best, and potentially catastrophic, at worst. Putting our collective heads in the sand is simply not an option. Hospitality organizations need to ready themselves for FoW, remaining open, flexible and agile. Staying current with FoW best practices is a great place to start.
Creating, maintaining and delivering on a compelling employee experience brand (consistent with an organization's external brand), creatively leveraging agile pools of on-demand talent, employing and merging FoW technology to create meaningful man-machine hybrid work, and robust development and advancement opportunities is clearly the path to creating substantive change – both actual and perceived. This will require bold, innovative and steadfast HR leadership. We think leaders in our industry are ready!
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