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Indian Hotel Industry... New Paradigms and Shifts
By Natwar Nagar , HVS International
HVS Executive Search started its voyage in India. It has been a long and tiring journey but a fruitful one. We believe that we have made a small but meaningful contribution to the hospitality industry in India. As the country’s first search firm specialising in hospitality, and being member of the Association of Executive Search Consultants and International Executive Search Consultants, we have been able to bring in a new perspective to the Executive Search business in this industry, as well as international best practices in the various areas of our work. We would like to say that we have been fortunate to forge excellent relationships, and establish a strong foothold in executive search in the segment of hospitality.
Along with our own evolution and growth, we have seen much change within this segment, in a number of areas and aspects. Today’s hotel professionals are markedly different from what they were five (or even three) years ago, in terms of their career growth aspirations, and their willingness to make the personal adjustments that the hotel industry career so often demands. Owing to the industry’s unique characteristics (and limitations), the task of finding and holding onto good people is becoming increasingly difficult and challenging.
We have, in the following paragraphs, tried to assimilate key human resource issues that we believe need close attention. The aim of the article is essentially to provide our thinking on these issues and get an immediate focus for hotel owners, senior hotel management, professional associations and industry experts: all those that have a stake in, or are associated with, the hospitality industry.
The hotel industry is rapidly losing good professionals to other service segments. With many new opportunities opening up - for both graduates with a hospitality degree and hotel executives with experience and talent - within the business process outsourcing (BPO), ICE and other service segments in
India, the hotel is no longer the only career choice. We can go so far as to say that the hospitality industry faces a serious threat from other sectors: those that offer better comparative remuneration, a better work-life balance, a more challenging work environment, or faster professional growth.
Shrinking manpower within the industry is, today, a very real problem. This paucity is being felt across all levels of staff and management now, and across all departments. On a pessimistic note, I dare to say that 85% of all management level personnel across hotel chains in India are not happy, and are waiting for the right opportunity to move out.
We strongly feel that for any new hotel that plans to open, the biggest challenge would be to source the requisite talent and to retain it.
The growing disillusionment within the sector is indeed worrisome. A love for the business of hospitality, and the desire to excel as a hospitality professional – considered to be the driving factors for a long-term career in the industry – are no longer motivation enough for a new generation of professionals that seeks faster and better gratification.
Quite clearly, industry leaders, associations and HR practitioners need to put in time and effort, to provide and prepare for long-term planning to resolve the issues. The issue of quality of working life would be the single deciding factor for the new generation.
Changing Aspirations and Expectations
The aspirations and expectations of hotel professionals have also undergone a sea change. To quote a senior hotel professional, “During our time, it would take as much as 13 years, through various positions, to rise to the level of Food and Beverage Manager. The new ‘Generation Y’ is not prepared to wait for more than six years.“ I have, in my three years with HVS Executive Search, not seen such profound change in the attitude of hotel executives. People now want a tangible idea as to how they will progress in the organisation.
The pressure of retaining people in today’s competitive environment, and the adjustments that this necessitates will, over a period, significantly change both the management structure and working environment in hotels in India. Managers will need to pay more attention to employee motivation and team-building efforts, and see that these “ideas” are more regularly - and more effectively - put into practice. Age old policies and super structures, will, we believe, have to pave way to newer and faster career progression. HR concepts once alien to the Indian hospitality, like HRIS, OD intervention and Career Pathing, must now be taken very seriously by Indian hotel companies.
It is indeed disappointing that, to date, not one hotel company in India has been ranked in the top three in any field of service orientation, or has been included in the list of best employers or best companies to work for. The industry has, without doubt, been inward looking, and owners and management have been slow to understand, recognise and adopt employee best practices.
The Indian hospitality sector having witnessed a golden year notwithstanding, the industry has failed to create enough excitement for talent from outside the industry to enter and be a partner in its growth. The industry has to find new ways of attracting talent from outside. At the same time, there is a need for senior management to be flexible in terms of their hiring practices, and more accommodating with new recruits. We believe that hoteliers need to let go of apprehensions and doubts, as to whether “outsiders” would perform well enough, and adopt a longer-term, more visionary approach: invest in finding and attracting talent and devise ways to retain good performers.
In other words, the industry needs to become more competitive. Lessons have to be learnt from the telecom and the other newly emerging, fast-growing sectors where people were “invited to join the industry and given time and space to perform”.
The industry’s compensation practices will go through a radical change. Some companies in India have started the process of aligning their pay structure to those of newly emerging sectors, but the differential is still too much, in the range of 30 - 40%.
Hotel owners and management need immediately to plan, develop and implement long-term strategies for bridging or, at least, lessening the gap between what the industry offers - and what these professionals would be paid outside. Industry leaders should be more open with their compensation policies and practices. Annual benefits may need to be split into monthly or quarterly incentives, to enable an ongoing process of employee motivation. Performance Management linked incentives must be very carefully monitored and should not be delayed. The practice of delaying compensation should be rectified and given urgent and top priority.
In our view, is it imperative to properly address the special issues and concerns facing the hospitality industry in India today. It has become quite evident that a market for the well-trained hospitality professional is beginning to emerge: from the newly liberalising aviation sector; from the retail sector; and from BPO firms, which were earlier limited to the main metros but are now expanding aggressively into second-tier towns. ITES-BPO jobs in places like Kolkata, Hyderabad, Pune and Cochin are being perceived as attractive options by those hotel professionals who would prefer to stay and work within their local environment, rather than re-locate elsewhere. Such as trend is likely to adversely affect hotels in remote areas as they would find it difficult to attract and retain talent.
The Road Ahead...
The solution lies in the industry taking some important steps, both in terms of building a productive and positive work culture, where employees are actively encouraged to perform to their best capabilities, as well as making the necessary changes in compensation practices. Hotel owners need to share as much information as possible with management. Managers and team leaders, on their part, need to spend time with their team members, to discuss objectives, provide feedback, ask team members about their difficulties as well as to talk about what’s happening in the hotel. International hotel companies such as the Ritz Carlton Company, Four Seasons Hotels and Resorts and Marriott – leaders in this industry in guest satisfaction and business profitability – are companies that have made a dedicated effort to encourage teamwork, employee empowerment, and a sense of responsibility towards the organisation’s well-being.
Moreover, the organisation has to define and create a clear path of movement for its employees. Quality of working life with international cross-functional exposure should become a key focus.
Taking a more macro perspective, the industry as a whole has an important role to play in positively presenting the hotel industry as a career choice. This could be by organising discussion sessions where prominent hoteliers/senior managers and industry persons speak to students and young professionals in this field. Hotels, on the other hand, will increasingly need to market themselves as promising places to work in. Arrogance and aloofness will no longer be the order of the day. Here, I would like to add that companies having their own training school and providing customised training to selected students should broaden their reach: in other words, extend their training programmes to other hospitality institutions and, thereby, increase the pool of talent available to choose from.
Another thing to do would be to provide greater education and exposure at the mid-management level. One way to do this is by opening our doors to knowledgeable hotel professionals with international experience, to visit and provide new learning to mid-level managers. Unfortunately in India, hotels have simply not invested enough time and effort in their junior and mid level positions, to provide them new knowledge, and keep them informed of international trends and best practices.
The subject of training hotel personnel, too, has simply not been taken seriously enough in India. A few senior people are sent abroad for few weeks and return with no new real value addition. Interestingly, this is also an area where international companies have a distinct advantage: the comprehensive and properly structured training that they are capable of providing is most potent weapon to attract the best resources in the country. Sorry to say, no international hotel firm operating in India has yet used this tool for differentiating itself with domestic hotel companies.
How successful hotels are effectively attracting, managing and retaining good people has a lot to do with their Human Resource departments. To quote once again the example of Four Seasons and Marriott, these companies’ generally high levels of employee performance and retention are due to the importance given to the HR function, to think, act, and care for their people. For hotels in India, the HR function needs to move out from the job of simply “recruiting“, and adopt a more holistic picture; in other words, pay attention to the deeper issues that affect their people. I would like to add that the time cycle for HR to take decisions must be reduced, and a vital lesson be learnt: that resources are scarce and that time is running out.
In my opinion, what we truly require is a “Hotel Infosys” (or many such hotels) that would share its profits with all internal and external stakeholders. For all those of us closely associated with the hotel industry in India, it is essential to do some soul searching and contribute effectively to protect our industry’s best interests. We, at HVS, would co
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