HOTEL BUSINESS REVIEW
MARCH FOCUS: Hotel Human Resources

Re-imagining Human Resource Management in the Hotel Industry

By Mark Munoz Professor of Management & International Business, Millikin University | March 2021

This article was co-authored by Subhashini Tripathi, Co-Founder, Pexitics

Hotels and allied businesses were among the worst hit in terms of business revenues and are now emerging from the paralysis resulting from the Covid-19 pandemic. There are projections suggesting that business and leisure will pick up again in the near future. An important question is, how will leaders in the hotel industry maximize gains in the next 6 -12 months?

The following key factors need to be weighed upon carefully as near term strategies are explored:

Cost focus: Many hotels will be making a revival from about ground -10 (negative profits), not ground 0 (no profit, no loss). Thus, cost will be a constraint for any strategy.
Non- managerial manpower management: This employee segment constitutes the bulk of the workers who are low on skills and low on 'loyalty to employer', unionized and often may have immigration issues. This segment cannot and should not be ignored.
Millennials as a significant ratio of travelers/travel decision makers: Millennials or Gen Y are environment friendly, aligned to brand values and highly technology savvy. Preferences and desires of this important market segment need to be carefully considered.

These factors will likely be in forefront of the minds of hotel executives as important management decisions are made.

Reframing the Human Resource Management Conversation

With numerous challenges impacting the hotel industry, new conversations need to take place. These conversations cover several key issues:

Profit improvement – how can profitability be improved? How quickly can we mend our balance sheet position? How can the hotel do more with less people and resources?
Enhancement of employee experience – how can the hotel improve employee morale and keep them motivated? What are the implications of a potentially diminished morale on the customer experience and eventually the company's bottom line?
Alignment of employee mindset with market conditions – how can the hotel ensure that the attitudes and actions of employees are in tune with the desires and expectations of key market segments (ie, millennials)? What training and development need to be carried out to facilitate this alignment?
Technological advancement – What measures need to be taken to ensure that employees have the right skills and tools to optimize the use of technology in business improvement? How can these be implemented with scarce resources? When would be the best timing of implementation?
Expanded collaborations – how can the human resource department better collaborate with other departments to find ways to optimize operations while reducing costs? Can synergies be derived from other external stakeholders to improve business operations?

As the pandemic recedes and the world moves towards business as usual, the hotel industry has an opportunity to reframe conversations and rethink its human resources management strategies. It is an excellent time to examine new processes, systems and tools that could lead to the improvement of employee and business performance, enhancement of customer experiences and the improvement of profitability.

Hotel Top Management Meeting

The hotel management meeting discussion shown below is fictional, but plausible given the emerging human resources issues to consider in the industry. The conversation is shown to illustrate current concerns.

CEO: Given we now have fewer employees, shouldn't our workforce be composed of lesser but smarter, multi-tasking employees?

VP of HR: Definitely. We need to rethink the optimal number and quality of employees we have and the most pertinent skill sets needed.

CEO: How can we identify smarter, multi-tasking (Best Fit) employees for hiring?

VP of HR: We should develop a skill selection criteria based on our current goals and preferences. We can then use top quality assessment tools to review all applications and pick out the best candidates.

CEO: Where can we find these types of employees for the hotel?

VP of HR: We have to take on a dual approach. With regard to the new hires, we have to broaden our search pool to find the very best. Due to the approximately 40% job loss in the hotel industry, there is a large unemployed talent pool available for hiring. With regard to our current employees, we need to identify and implement strategic and impactful training to help them do the best work possible.

CEO: What should be the ideal cost per employee?

VP of HR: Before the pandemic, managerial employees had structured pay-scales while the non-managerial employees were on negotiable per hour / per day rates. We need to now carefully measure employee output and productivity alongside cost per employee given the state of our budget. I'll run some numbers and show you in our next meeting.

CEO: Should we expect to spend more?

VP of HR: Not as much as one might expect. There are innovative and fairly inexpensive tech tools available for assessments. Our department has been very strategic when it comes to handling our learning and development (L&D) budget. Over the past few months, we have utilized innovative virtual training programs to boost employee technology as well as customer relations skills. We are empowering supervisors and assistant managers so they can make prompt and effective decisions. We are training them to take on multiple roles. We are exploring several other options while keeping our budget in check.

CEO: Aren't some hotels using apps and other tools to enable multi-tasking management and productivity enhancement?

VP of HR: Many hotels have structured Human Resource Management Systems (HRMS) to enable employees to submit leave requests, check policies etc. We are currently studying the use of one of these systems. During the pandemic, the level of technology usage and adoption across all sections of the population have increased. New concepts of HR Analytics and smart dashboards are helpful in making sense of data from multiple sources. It will enable the managers to make smarter and more profitable decisions.

CEO: How can we get started on this?

VP of HR: We have lost many employees over the past months. The HR department is seeking new processes and tools that will allow us to enhance employee output while minimizing cost. This is a tough task. But, the key to success will be the recruitment, engagement and retention of the right fit employees – those that are smart and have the ability to take on multiple tasks.

This conversation illustrates just a fraction of the key issues hotel management need to contend with at the current time.

Leveraging Technology and Business Models for Solutions

Many industries have turned to innovative technologies and creative business models to address operational challenges and uncover solutions to problems. A similar approach would work well for the hotel industry. Shown below are typical contemporary challenges relating to human resources management and their strategic solutions:

Challenge 1: Optimizing employee performance and hiring the best fit

Talent assessments are a good way to get an unbiased pool of candidates who score high on desirable multitasking traits and attributes. An excellent way to enable fast and accurate shortlisting is by enabling online Talent Assessments (by sharing a link) in the Job posting. It ensures only the serious candidates land up in the list of hopefuls and that the best suited (aptitude and ability wise) come in for the interviews.

For the hotel industry, certain traits like empathy, customer centricity, pleasing speech and behavior become as important as the technical skills. Using platforms like Mettl, Pexitics, MBTI, SHL etc. to shortlist candidates with the best fit can be helpful. With regard to existing employees, having them create their own Personal Strategic Development Plan or Self Development Journey in coordination with the human resources department could be helpful in ensuring an alignment between the goals of the employee and the company.

Challenge 2: Evaluating the ideal cost per employee

Hotel executives can use salary benchmarks from companies like Glassdoor, Mercer etc. to understand the pay structure that will work best for the hotel. Savings on manpower cost can be derived by employing candidates with the best organizational fit. Hiring employees with the best fit can result to a higher cost per person, but talented employees contribute to impactful results that could eventually cover the work of several persons. Talented hires can lead to lower operational costs and profitability improvement.

Challenge 3: Finding the best possible pool of employees

The gig economy is here, and a multitude of platforms and apps enable reaching the right audience to positions open like LinkedIn, GrabJobs etc. Hotel executives can leverage the pool of ex-employees. They can be sent online Talent Assessments (share a link) through email. A ready reference pipeline of people that can be hired on short notice can be built. Hotel executives can use HRMS systems or CRM (Marketing) systems to maintain contact with ex-employees and part-time employees by sending emails and messages on birthdays and other events. They form a good pipeline for referrals.

Challenge 4: Utilizing technology to enable multi-task management and productivity enhancement

Hotel executives can empower the HR department to embark on talent assessments, surveys, dashboards, data management and HR analytics skills. The HR department needs to find ways to enhance the employee experience and co-relate these with heightened customer experience and better return on investment. The HR department needs to have a strategy that is well aligned with revenue and profit goals.

Furthermore, there is an opportunity to develop a culture of monitoring engagement, needs and performance feedback through surveys enabled by technology (smart phones, computers, kiosks etc.). Effective monitoring would lead to the prompt identification of issues that needs to be addressed and encourage employee engagement. If done right, it could lead to a more thorough understanding of the organization and the impact employees have on the hotel ecosystem and bottom line.

Challenge 5: Engaging and retaining the best fit employees in the talent pool

Creating a culture of taking feedback through surveys enabled by technology and analyzing the data using Dashboards and HR Analytics will enable hotel executives to undertake policy modifications and take steps to better engage the best fit employees, specifically those that are highly talented and can do multiple tasks well. Hotel executives can avoid the attrition of these best fit employees by conducting regular engagement and needs surveys across departments to uncover specialized needs and requirements.

Oftentimes, high potential employees require dedicated attention. The use of coaches and mentors can be helpful. Getting employees involved in inter-departmental projects will help them gain a broader perspective of the organization. There are innovative surveys that are focused on enhancing performance and employee satisfaction. Many companies have successfully used Aon-Hewitt, Mettle, Pexitics, Survey Monkey etc. for surveys to better understand the employees' current and future developmental needs. HR Analytics tools are available to gain deeper insights from the surveys.

As shown above, innovative processes and technology can help address key operational challenges in many ways.

Hotel HR Innovation

The case below recounts a real-life situation pertaining to a hotel industry client of one of the authors.

A hotel chain with around 1000 employees was forced to reduce manpower to around 500 during the pandemic. The occupancy rates were down to approximately 20% (from 48-50%) and business was slow. In December 2020, once the vaccine seemed like a possibility, the top management decided to pursue a strategy for reviving the business.

Since the number of staff was significantly lower and they had spare time, the goal was to focus on ways to increase revenues and profits. The management team planned a "transition phase" to get the business close to what it had been in the past.

During the first week of January 2021, they ran a digital Needs and Engagement survey to understand: 1) the willingness of each staff member to take on multiple tasks, 2) to identify which other functions they were interested in, and 3) uncover the support they needed to take on at least one more functional responsibility.

In the following two weeks of January, the management team did online Psychometric Talent Assessments to better understand the competencies of their present employee pool and identify quantitative benchmarks for use in future hiring and internal job rotations.

By the end of January 2021, the management team led by the HR department reviewed the findings of the survey and the assessments to understand:

Willingness and capability of the existing staff in order to devise a learning program for employees.
Frameworks to decide which employees have potential for promotion (higher responsibility) and who have ability to look at lateral growth and multitasking at the same or current levels.
Viable financial growth and incentive plan to motivate existing employees to stay for the next 1-2 years, thereby lowering incidences of attrition.
Essential skill sets necessary for the jobs where additional external hiring is required.

The hotel management then identified internal mentorship initiatives as well as essential external online training models for learning and development to optimize employee performance. With the program implemented in phases, the goal was to complete the initial phase of the program by the end of February so that the hotel will be ready to handle increase in business with minimal hiring by March 2021.

The case is noteworthy given its innovative approach, the speed of program implementation, heightened emphasis on productivity and profitability, and the rate of technology absorption in the organization.

Human Resources Reimagined

There are countless ways wherein human resources management can be redesigned and reconfigured in the coming years. In the hotel industry, three approaches are essential:

Rapid Response – with new technology and work models in place, hotel executives would be able to respond quickly to changing human resource needs alongside a volatile market environment.
Revenue Focused – with heightened attention placed on the optimization of talent and performance, hotel executives could realize cost savings and better align decisions with revenue targets and goals.
Revitalized Technology – with growing stakeholder technological sophistication and expectations, hotel executives could better utilize innovative technology to optimize work performance, boost productivity and enhance customer service.

When implemented strategically and at the right time, the impact of The Three R's (Rapid Response, Revenue Focused, Revitalized Technology) can help transform human resources management in the hotel industry and contribute to its business sustainability.

Human resources management is a vital function in any business anywhere in the world. In the hotel industry, utilizing the right technological tools and the re-thinking of ways to enhance work performance and productivity helps mitigate numerous industry challenges and opens up new success pathways into the future.

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Notwithstanding the foregoing, any and all disputes, which the parties cannot informally resolve, regarding the scope of issues or matter with the jurisdiction of the arbitrator, shall be resolved by a separate dispute resolution process whereby HotelExecutive, in its sole discretion shall elect the dispute to be resolved by either (1) a court of competent jurisdiction in the State of California or (2) a panel of three new arbitrators.

This Agreement shall be governed by and construed in accordance with the laws of the State of California notwithstanding any conflict of laws provisions. You and HotelExecutive agree that the venue for all legal disputes, controversies, actions of any kind arising under or related to this Agreement shall be San Francisco, California. You and HotelExecutive further agree that in case of any litigation regarding this Agreement, you irrevocably and unconditionally (i) consent to submit to the exclusive jurisdiction of the state and federal courts in the County of San Francisco, California for any litigation or dispute arising out of or relating to this Agreement, (ii) agree not to commence any litigation arising out of or relating to this Agreement except in the California Courts, (iii) agree not to plead or claim that such litigation brought therein has been brought in an inconvenient forum, and (iv) agree the California Courts represent the exclusive jurisdiction for all litigation relating to this Agreement.

11. MEMBERSHIP FEES

Hotel Business Review Subscriptions

If you choose to purchase a subscription, member subscription payments can be made in U.S. Dollars, as well as a variety of international currencies. Membership terms are Annual Recurring, and Monthly Recurring. The Annual Recurring subscription is an annual commitment and subscribers will be charged each consecutive billing cycle. Annual Recurring subscriptions can be cancelled after the first billing cycle and within 30-days of the billing date for a full refund. Monthly Recurring subscriptions are ongoing and subscribers will be charged each consecutive monthly billing cycle. Monthly Recurring subscriptions can be cancelled after the first month and within 7 days of the monthly billing cycle for a full refund.

12. PAYMENT AUTHORIZATION

Payment for the services provided to you in, at, through or in association with HotelExecutive may be made by automatic credit card, debit card, direct debit, bankwire or Paypal and other approved payment means offered in, at, through or in association with HotelExecutive, and you hereby authorize HotelExecutive and its agents to transact such payments on your behalf.

You hereby authorize HotelExecutive's Internet Payment Service Provider to charge your credit card to pay for your membership to HotelExecutive. You further authorize HotelExecutive's Internet Payment Service Provider to charge your credit card for any and all purchases of products, services in association with HotelExecutive. You agree to be personally liable for all charges incurred by you in association with your access or other use of any content provided by HotelExecutive or any third party in association with HotelExecutive. You acknowledge and agree that your liability for all such charges shall continue after termination of your access or any type of membership arrangement with HotelExecutive.

In the event that you have chosen to have your membership automatically rebilled, unless and until you notify HotelExecutive that you wish to cancel or terminate your membership to HotelExecutive, you hereby agree and authorize HotelExecutive's Internet Payment Service Provider to automatically renew your membership to HotelExecutive on a continuing basis and to charge your credit card (or other payment means you have selected) to pay for the ongoing cost of your membership. You hereby further authorize HotelExecutive's Internet Payment Service Provider to charge your credit card (or other approved payment means you have selected) for any and all purchases of products, services and entertainment provided to in, at, through or in association with HotelExecutive.

13. PRIVACY POLICY

The following is the Privacy Policy for HotelExecutive

We can be reached via telephone, email, or online at our contact page. When you visit our site we do not log any information regarding your domain or email address. Information Sharing: We do not share user information with any third parties other than via press release distribution as described below.

Hotel Newswire is a newswire service that distributes press releases on behalf of our users. If you decide to submit a press release for distribution through our system we will transmit your entire press release including any personal information therein contained to our media contacts and online distribution points including search engines. This is the only redistribution of your information that we engage in. Your submission of press releases through our system indicates consent with this policy. The information we collect during your registration process is used to notify users about updates to our service and inform users of any special events hosted by Hotel Newswire. This information is not shared with other organizations for commercial or non-commercial purposes.

Cookies: Our system requires the use of cookies to enable the user to log back into our website to access information from the newswire, without having to log in each time using the required username and password.

If you do not want to receive email from us in the future, please let us know by following instructions included in our communication with you. Users who supply us with telephone numbers online may receive telephone contact from us regarding their account, or informing them of new products and services available on the HotelExecutive website. If you do not wish to receive such telephone calls, please edit your account and remove your phone number from your account profile. This can be done from your user account menu.

Ad Servers: We do not partner with or have any relationship with any ad server companies. From time to time, we may use customer information for new uses not previously disclosed in our privacy notice. If our information practices change at any time, we will post the policy changes to our website to notify you of these changes and provide you with the ability to opt out of these new uses. If you are concerned about how your information is used, you should check back at our website periodically.

Upon request we provide site visitors with access to all information (including proprietary information) that we maintain about them. Users can access this information by logging in to their account.

Security: We always use industry-standard encryption technologies while transferring and receiving user data exchanged with our site. We have appropriate security measures in place in our physical facilities to protect against the loss, misuse, or alteration of information that we have collected from you on our site. We do not store credit card information in our systems.

If you feel that this site is not following its stated information policy, you may contact us.

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MARCH FOCUS: Hotel Human Resources