The last decade witnessed some far-reaching and significant changes in the way business is conducted in the Indian Hospitality spectrum. Regardless of the recent year’s contentious and challenging economic climate, the hospitality landscape continued to evolve, and new international hotel brands entered the Indian subcontinent. Needless to say, in its effort to stay one step ahead, the growing sector had to work twice as hard and revolutionise its business and human resource (HR) strategies. HVS Executive Search provides an outline of the key HR trends we believe have been the drivers of the hospitality sector in the last few years and will continue to play a dominant role going forward.
- Walking the path to maturity – Traditionally, HR in Indian hospitality was predominantly transactional with sheer emphasis on personnel management. With the advent of global international brands intensifying, competition for talent became fierce. Management of the employee lifecycle along with aspirations of young recruits became more challenging and complex; thus providing the much needed impetus to HR to evolve and emulate innovative global practices. HR took the leapfrog from being “administrative supporters” to “business partners” working closely towards the development and evolution of the human capital. Today, HR Leaders work alongside Business Heads to predict what the future of the organisation will look like, and identify potential skill sets required to tide over the market landscape.
- Employer branding – New Value Proposition – To capitalise on the opportunities that today’s socially connected and net savvy consumers are exposed to, HR in the sector is creating a compelling story for their existing and potential employees. Traditional recruitment efforts are now making way for workplace branding promotions through social media platforms. HR teams across some of the global hotel brands are actively engaging in brand storytelling through mediums such as LinkedIn, Facebook and Twitter. Apart from this, inorder to resonate better with a potential employee, more and more prospective employers are partnering with consulting firms inorder to integrate storytelling with employer branding.
- Growing partnership of HR and the Social Media – In conjunction with employer branding, social media is also becoming a popular platform for the HR function to acquire talent. Tools such as Facebook, LinkedIn and Twitter have a major following amongst today’s generation of hoteliers. Apart from their internal referral programs, hotel companies are encouraging job applications through innovative group forums created on these popular platforms. This not only leads to effective management of time and costs for hiring new employees but also creates a sense of belongingness and bonhomie in the mind of a prospective employee. Marriott is a shining example of utilising this tool very effectively.
- Building the base and changing the old status for future growth – The increasing competition and shrinking revenues have led to serious introspection by the industry stakeholders and HR leaders to devote their time on measuring key factors such as productivity of employees, average employee cost and manning ratios. The sector had ignored these critical barometers for a long time, however in the recent past these have gained considerable significance so as to be reviewed on a periodic basis. Such measures assist in determining how effectively companies are able to attract finance and create plans for scaling up and managing their existing talent pool. The focus should continue towards bringing in rigor and science while making strategic HR decisions.
- The Compensation Bubble – In the last decade, the Indian hospitality sector recorded a historical compounded growth ranging between 10-12% in terms of real earnings for its employees across all levels. It is marked as the “golden period” in Indian hospitality as the industry emerged from the shadows of being the poor cousin in the Services sector, eventually gaining respect and recognition. However in the years to come, owing to escalating costs, which have started to hurt profitability and bottom lines, the same optimism on compensation growth may cease to exist. Given the current hospitality landscape, which is being dominated by International hotel brands with a distinct advantage to utilise their global practices to attract high potential talent, it is time for Indian hotel players to innovate fast in order to tide over the impending challenges.
- Evolution of a Hotel General Manager – In today’s promising hospitality landscape, one significant paradigm shift has been the emergence of a hotel General Manager (GM) from functions other than Food & Beverage and Rooms Division. Traditionally, these were the only two preferred breeding grounds for a potential GM. However, given the current economics coupled with robust employee engagement tactics being followed by leading International chains, companies are encouraging career growth from other core functions such as Housekeeping, Finance or Human Resources.
- Young Workforce and Aging Leaders – Another clear trend emerging fast is the growing young workforce replacing the aging employees. The days of traditional management style no longer seems to motivate and inspire the minds of a much younger workforce seeking constant job satisfaction, faster promotion avenues and also an environment offering a more participative as well as collaborative work style. Furthermore, this trend can be substantiated with a recent research on a typical GM profile conducted by HVS Executive Search across 200 hotels with varied market positioning in India. It reflects that more than 80% of the existing GM population are aged between 36-40 years, providing a stark contrast to the erstwhile GM profile with an average age of 44 years or more. This interesting trend not only holds true for positions that are at the helm but across divisions and job roles.
- Doing more with less – One of the recent trends has also been to look at practical ways of rationalising existing manpower through their optimal utilisation. Building efficient hotels and hiring employees who are multi skilled and can multi task will continue to be a popular trend. Thus putting the spotlight on HR function that will have to work strategically to manage employee expectations and growth aspirations better.
- Assistance with Higher education – With all the focus on employee engagement, a trend which has gained considerable popularity is the tie-up of hotel companies with leading International hospitality management institutes. Through these tie-ups, employees can enrol for online courses and can even be eligible for undertaking scholarship programs. Such proactive measures assist in engaging employees better and also act as a tool for talent development, which in the long term becomes beneficial for their career growth. Recognising this as a need of the hour, HVS will soon be providing customised training and development solutions through the launch of its Professional Skill Development vertical this summer.
- Women Power in the Hotel World – Whilst the hospitality industry has no shortage of women entering the business, as one goes up the ladder, it is seen to be - male dominated. The reasons are generally attributed to the culture and nature of the industry, where women hoteliers often face the dilemma of having to make a choice between family and career. Although we are yet to see a significant shift in regards to more women as GMs, the industry seems to have taken cognizance of this absence. Based on HVS research, in 2009 women GMs constituted less than 5% of the overall GM pool in India as compared to the existing 7% in the current year. Even though this shift in data can almost be considered negligible, one can definitely see a glimpse of change in the trend.
Whilst HR will continue to play a high impact role, however despite the encouraging trends HVS Executive Search still believes that there are sizeable opportunities yet to be explored in the Indian hospitality domain, specifically when compared to other mature HR service economies.