Introduction
Managing talent and employee retention in hospitality and cruise industry sector has become a major concern for 2014. It is presented as ‘the strategic management’ by Baum (2008) in analyzing the influence of labor market on the talent management. The industry faces the highest employee turnover that reduces significantly the competitiveness of companies in this sector. Also, talent management has become vital due to lack of skilled workers and the uncertainties labor market (Chartered Institute of Personnel and Development (CIPD) 2005). Many hotel operators lack powerful strategic plan for managing talents that is critical in promoting brand consistency (Kyriakidis 2010). Interestingly, the industry has invested heavily on employees with an average hotel operator incurring 45% of operating expenses on employees. In addition, 30% of revenues generated by hotels cover labor costs mainly benefits and compensation (Kyriakidis 2010). Talent management is to be viewed as a basic business strategy as per Maxwell and MacLean (2008) who focused on this need to coordinate it with a range of HR systems and processes. They lay stress on the strategic thrust of Talent management through the citation of a numbers of authors including Faragher (2006), Powell and Lubitsh (2007) and Smith and Tyson (2005) who stress on the strategic approach to Talent management.
The essay evolves the barriers to the talent management in hospitality and cruise industry and the emerging challenges in the market. Hence, provides recommendations to deal with these barriers accordingly. Further, it assists and development of talent management and concludes by discussing the potentials within this industry, which by implementation of certain strategies can lead to increased profits and economy to be at its peak.
Rising employee turnover and its impacts to the industry
Despite the high expenditures on employees, employee turnover has kept on increasing leading to loss of talented and skilled workers. Hospitality management has several negative attributes that contribute to high employee turnover rates as per a research that include low-status nature, job insecurity and low pay (Hughes & Rog 2008; Nickson 2007; Sturman 2001),.Causes of employee turnover are a result of seasonal demand that need to be flexible and little requirement of skills, hence, the workers may enter or exit without restrictions (Barron & Anastasiadou 2009; Milman & Ricci 2004; Taylor & Finley 2009). Companies in this sector lack strategic programs and plans to effectively manage talents and position themselves well in the market. Apart from incurring high costs, employee turnover has adverse effects in maintaining brand consistency that is ideal for success in hospitality sector. There is a high correlation between employee loyalty and their dedication to good service in the hospitality industry (Allen & Bryant 2012). Well-motivated employees are satisfied and handle customers well, hence, building the company’s brand. Companies that struggle to retain talents find it extremely hard to build brand loyalty amongst its workers, who deliver inconsistent services to customers. Investing heavily in talent management is inevitable in this sector to effectively execute strategies. Employee retention and sustainability should be a part and parcel of decision making in this industry to align employee satisfaction and service delivery. Hence, Christensen Hughes and Rog (2008), Deery (2008) have been working to investigate on the relationship with features of employee engagement and employee retention. Also, the industry is lacking in research to improve critical processes and methods of improving the workforce. Companies in this industry should consider investing more on research and development to combat the increasing employee turnover and stay ahead of workforce desires and needs. An excellent way to do this is to establish research and development department that is fully equipped with necessary tools and human capital to spearhead research and make recommendations to the company. Management tools for reviewing and tracking costs will improve efficiency with which working capital is managed. Many companies in the hospitality industry are reluctant to execute up to date management systems geared towards managing costs and improving operations. To enhance customer service as well as good feedback system, companies should embrace mobile phone technology especially the smart phones as this will help in improving customer loyalty. Customers are satisfied when they get quick responses to their questions and needs at any particular moment (Allen & Bryant 2012).
Employees’ competency is enhanced when they stay relatively longer in an organization. It is paramount for hospitality sector companies to invest heavily in innovative talent activities. Companies that struggle to ensure a sustained employee engagement stand a chance retaining good talents. This is critical in ensuring customers are satisfied and is a source of companies competitive advantage in the global arena. Productivity in hospitality and cruise sector is driven by creative employee engagement practices (Kyriakidis 2010). Revenue increases significantly because when employees’ affairs are well taken care of, guests do not encounter problems implying they are likely to return for another time and probably refer other guests. Many Hotel operators and resorts owners in the hospitality have not done enough to reduce shocks occasioned by unforeseen events. There is need to execute good crisis management practices including constructive restructuring and redesigning of business processes, continuous planning, flexibility in pricing strategies to retain customers. The essence is to maintain brand consistency even in bad economic times and enhance good relationship with workforce to retain them for long period of time. It is important for companies operating in the hospitality industry to recognize that most guests are more inclined to recognition as opposed to rewards. To enhance customer loyalty, companies should treat customers in a special manner so that they feel recognized. This way they will become loyal to the company’s brand. It the prime responsibility of companies to understand generational needs of their workforce to effectively retain good talents that will satisfy customers. Understanding Lifestyle brands is an important aspect to remain relevant in the market. Companies that keep track of the current lifestyle brands and avail them to customers make huge margins as opposed to those that stick to their conventional brands (Kyriakidis 2010). In order to attract talented workforce who are conversant with brands, internet and social media sites are excellent tools to create awareness especially when there is need to hire more employees.
Market challenges emerging in 2014
Companies entering into new global markets are facing numerous challenges related to regulations in sourcing talents. Labor laws for instance vary and act as impediments to operations of a company. In some areas such as Macau for instance, hotels are limited to only hiring locals only. With more hotels establishing in the region, it means that shortage of talents is a pressing issue. America and European countries for example fresh graduates with hospitality background have a well-defined career path unlike in Asian and African countries that do not have conventional talent sourcing venues or clear talent paths to be followed. In bigger and well established economies, poaching talent is popular activity especially in locations with concentrated hotels where salaries rise uniformly (Phillips & Connell 2003). Employees in such areas shift to competitors to earn higher salaries, accelerating the existing problem of high employee turnover. Changing standards in different geographical regions are also a hindrance to maintaining good customer service and brand consistency especially in emerging markets. This implies companies intending to operate in such markets should develop powerful and innovative practices geared towards talent retention and management. Due to the liberal approach towards career development the hospitality industry has been vastly impacted since, a recent research study at Cornell University in the USA concluded that the professionals in this industry have been independently taking charge of their career and have been in search of jobs that offer career potential growth (Taylor and Walsh, 2005). These practices will among other things align employees with the company’s strategic objectives and goals , reduce significantly employee turnover, build company’s brand and improve customer experience.
Developing talent management action plan
Many companies do not have a powerful talent management action plan even as the world recovers from a recession. Lack of a robust action plan for retaining talents is the major cause of high turnover in the hospitality industry. Many employers in this industry have not realized the increasing demand for talents in the sector. A survey conducted early this year by Deloitte indicated that most employers are only worried of losing top talents. This means that as the economy recovers, voluntary turnover will rise because many opportunities for top talents will show up (Kyriakidis 2010). To manage this problem companies in the cruise and hospitality industry need to be proactive by designing innovative practices for managing talents. This is this the only way they can retain critical workers. To attract and retain critical employees, companies should do an analysis especially on assets and liabilities to identify barriers to retention. Barriers vary in different markets as well as the economic conditions. Baum (2008) supports the necessity to improve the working conditions to retain the present and employees and attract newer ones to absorb maximum talent. Also, he considers it to be a necessity to view the application of talent management in larger labor markets. His views are supported by Barron (2008) and Watson (2008) who also focus on the unforeseen structure of talent management. During recession period for instance, incentives and compensation are the major barriers to employees’ retention while during flourishing economic times, employees turnover is occasioned by new jobs and opportunities. Once the company identifies retention barriers and an assessment of existing talents has been done, a comprehensive talent management action plan is designed. The action plan should be a combination of several aspects including catalysts, solutions, infrastructure and strategies to effectively manage and retain talents in the companies in this sector (Davidson & Shane 2011 p.507). Company needs and strategies determine talent goals and objectives. It is important for companies to consider the manner in which their human capital needs will vary in the coming years. They need to determine the type of workforce they require, the parts of the world they will originate and how their performance will be continuously monitored and measured.
Investments geared towards making solutions should be intertwined with company’s strategies. While some solutions focuses on talent related issues such as hiring employees or developing their career, others will focus on work related issues such as how, when and who to work where. Talent Management literature presents a number of considerations in relation to its implementation. The line management role is an enduring theme in much of the literature on Talent management (CIPD 2006; Faragher 2006; Warren 2006). To enhance implementation of talent solutions, companies should develop their infrastructure to meet the needs of workforce. Some infrastructure could be already in existence looking for upgrading. Hotel operators for instance should address issues such as upgrading systems and adjust their culture with regard to issues such as workforce diversity, technology and delivery of services. In a nutshell, improvements should focus on delivery of specific solutions ideal for supporting the strategies executed.
Restructuring operation model
A global financial officer for instance who is responsible for providing direct reports and giving feedbacks on performance and rewards across the world encounters different merit percentages, review schedules for salaries and benefits, varying evaluation criteria depending on locations. Such inconsistencies hinder team building and reduce employee engagement leading to increased inefficiencies (Paul & Barrie 2008 p.298). Operations of the back office in hospitality sector have been in the past underinvested especially information and technology, finance and human resource functional areas. Most companies undertake initiatives that are customer-centered and forget initiatives for retaining and attracting critical employees to handle customers. Redesigning and restructuring operations model is inevitable for companies in the hospitality industry to address issues affecting back and front office interactions as well as overall corporate relationships. This involves reassigning responsibilities and upgrading models geared towards effective customer service delivery. Also, an exclusive post should be provided to the HR managers to give them the sense on recognition and respect in the hospitality and tourism industry (Jurowski & Liburd, 2001). Companies in this industry should consider decentralizing or centralizing their operations and making of decisions to align talent strategies with the organizational mission and vision.
Conclusion
In conclusion, businesses in the hospitality industry continue to encounter dynamic markets and strategic options in the coming years implying they must be proactive in evaluating their talent management plans to determine whether the talents suits their organizational strategies (Kyriakidis 2010). As the economy peaks from recession, companies in the hospitality industry will face increased employee turnover due to talent poaching and more opportunities opening up. To fight this trend, companies must develop innovative and robust talent programs and solutions geared towards decreasing employee turnover and retaining critical talents. The programs must be implemented consistently and be internationally integrated. Increased employee engagement is the only way to motivate employees to work hard and to boost their morale (Oakes & Galagan 2011). In order to effectively execute set goals and objectives, companies in the hospitality management must redesign and restructure their operations model as well as their structures so as to align with employees’ responsibilities and roles. This is important for companies especially considering centralizing or decentralizing their operations and those considering corporate or property relationships.
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