How the Economic Recession has Changed HR Management in Lodging

By Miranda Kitterlin, Ph.D. Assoc. Professor, Chaplin School of Hospitality & Tourism Management, FIU | March 25, 2012

Over the years, the lodging industry has seen its share of tough times. However challenging, the fantastic men and women who carry the torch of hospitality in this field have always found a way to adapt. Most recently, this adaptation has been toward the economic recession, which had an impact on all levels of operations, but perhaps most drastically affected Human Resources departments. Those that emerged from this difficult climate without losing their shirts have come to find what we are calling a "new norm" – one that can be summarized simply by "doing more with less" – and preparing to do more with less from here on out.

The lodging industry is no stranger to the fickle whims of the economic climate. The catastrophic events that we have come to know as the "great recession" forced many businesses into triage mode, and those who would weather the recessionary storm were left with the dizzying task of doing more with less. More work had to be done with less employees, more advertising had to be done with less money in the budget, and more thinking had to occur outside the box, so as not to lose the box itself to the bank. Human Resources departments, despite being arguably the most impacted by downsizing, rose to this challenge by implementing what is now considered to be the "new norm" of doing business.

One strategy being employed by Human Resources professionals in lodging companies is simple: hire smart workers. Having been forced to reduce staffing levels in the past, lodging properties now recognize the need to make each position count. That means hiring the right talent-those individuals who are up to the challenges the work presents, and those who are open to cross-training and change when needed. This is not merely applicable to line-level employees, but is particularly germane to management. Additionally, working in a company that has been forced to tighten its belt means doing more motivating with less incentive costs. Management must find "easy on the wallet" ways to motivate and reward their employees.

Doing more with less inevitably involves asking both management and staff to take on additional tasks and assignments. Properties are often quick to respond to an undesirable economic climate by reducing or eliminating training and development. However, forward thinking Human Resources professionals know that without training and development, a company's existing employees are not as qualified to assume the added responsibilities required to ride out the economic tempest. The long-term payoff for quality work performed by appropriately trained individuals will prove to outweigh the temporary costs of training and development. Now more than ever, HR departments are emphasizing the importance of quality performance. Properties are being forced to become less tolerant of employees who do not have both "hard skills" and "people skills". Management and staff in all areas are being rated as A, B, or C players – the understanding being that they can no longer afford to retain any "C" level performers, and that those who perform at a "C" must be coached to at least a B level, or respectfully dismissed from the company. Simply adding more work to a dwindling population of staff who lack the necessary knowledge and skills is not a sustainable model.

Realizing this need to retain and employ training and development initiatives, Human Resources departments are modifying their programs to be more cost effective during difficult times. This includes amendments to existing programs to incorporate more innovative approaches, such as the use of technology and/or senior employee mentors. For example, some educational methods, such as watching corporate training videos, or taking employment-training tests, might occur off-property via the Internet. Other efforts include the evaluation of existing training programs through the use of secret shoppers and the analysis of consumer feedback to monitor success and ensure alignment with company goals. To further complicate this difficult task, Human Resources departments must also ensure that the holders of the company purse strings understand the importance of training programs in relation to decreased turnover and increased productivity, satisfaction, morale, and overall company success.

Due to the drastic change in the landscape of the economy, Human Resource departments in lodging are not simply using technological advances to reduce costs associated with training, they are also turning to technology in an attempt to improve the speed and efficiency of the hiring process. Systems (like Gallup) are being adopted that are capable of bringing candidates all the way through the hiring process from application to objective screening to generating offer letters. There is still a human aspect, of course, but the administrative responsibility can be minimized to the click of a button, versus multiple hours of employment coordination. With this increasing dependence on technology comes the recognition of the urgent need to replace old technology with more efficient programs (new Human Resources Information Systems, for example) as upgrades can offer vast long-term savings. Compared to other departments in lodging properties, more than 50 percent of new product implementations are seen in the area of Human Resources.

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