Has the hospitality industry got stuck in the 1980s?

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Series: Recruitment, AI & HR in the hospitality industry · Post #9 of 90

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Has the hospitality industry got stuck in the 1980s?

A few weeks ago, I launched my new blog with a 90-day series focusing on key issues related to modern recruiting and human resources – or human potential, as people nowadays prefer to call it, to move away from the usual 'terminology'. Topics covered include:

• AI in recruitment
• ATS systems and their limitations
• Best practices from the hospitality and catering sector
• Talent retention and employee development
• The role of social recruiting, LinkedIn, etc.

The aim is to provide practical insights for companies and HR managers, while at the same time initiating a discussion on a wide range of topics and the future of our industry. 

My editorial plan includes a total of nine thematic blocks, each with ten articles. However, while this seemed wonderfully structured at the outset, when I was researching my blog posts and articles, it proved almost impossible to separate the different topics. At least not with a clear dividing line in terms of content. If I talk about AI in recruitment, I also have to consider the issue of the skills shortage in general. If I explore the reasons for this, I quickly find myself delving into topic areas such as 'changes in job profiles', 'recruitment processes', 'social recruiting', 'career changers' or 'leadership in the hospitality industry'. And in doing so, I cannot avoid addressing corporate and HR strategies, and above all, the future of the industry. It's all closely interlinked. 

The thoughts that went through my mind as I worked on individual topics, which went far beyond what is outlined above, somehow seemed familiar to me. And after a bit of digging through the depths and vastness of my external hard drive, I found them. These thoughts. These reflections. Recorded in 2015! As the foundation and rough script for a book project featuring clear pain points, authentic stories, and the solutions and approaches based on them. And I was shocked. Shocked that what I recorded nine years ago, as a summary of my then 29 years in the profession, is still as relevant today as it was then. 

And that is the following:

A shortage of skilled workers – and no end in sight.

When I began my vocational training as a hotel manager in 1986, there was already widespread talk in the hospitality industry about the prevailing and growing shortage of skilled workers. Forty years have passed since then, and, as a result of demographic change, technological developments, an ongoing shift in values, and other influencing factors, the demand for skilled workers in the hotel and hospitality sector has increased more than ever. The COVID-19 pandemic has brought further challenges and has led to a significant exodus of the few available workers from the hospitality sector. Forty years have passed, during which the industry has done little to proactively and promptly address this exodus, both in normal and exceptional circumstances, and to meet the demand for skilled workers. In some cases, it was not even recognised that there are new training pathways available (for example, a dual business administration degree with a specialisation in Hospitality & Tourism; one of my areas of expertise since 2008 (!)) and that the demands of guests and their expectations of hotel and restaurant staff have changed. The attitude of young professionals towards work has also changed. In this context, 'work–life balance' is a buzzword that makes many business owners and managers from the Baby Boomer generation roll their eyes. In fact, the hospitality industry has an even worse reputation today than it did around 40 years ago, which cannot be attributed solely to unattractive working hours and low salaries. The call for strategies and solutions is growing louder and louder – on both the employer and employee sides. Many young people choose the hospitality industry despite the challenges it presents. In many cases, they discover that the warnings they received from friends and acquaintances, from family and also from the internet were not empty words. Often, the reality is experienced as being far worse than previously described by the aforementioned groups of people – even in establishments that offer 'excellent training' and are certified accordingly. At universities that offer dual study programmes and full-time Bachelor's and/or Master of Arts courses in Hospitality and Tourism Management, the number of students who drop out after opting for business management training with the aforementioned specialist focus on theory and practice is significantly higher than in other subject areas. These young people were happy – and in some cases proud – to be part of the team at an independent hotel or a hotel chain, at a chain restaurant or at a high-end restaurant. They had been won over by the campaigns that have now become commonplace in the hospitality industry in the areas of employer branding, corporate philosophies, corporate cultures and visions, as well as career prospects. Large hotel groups and chain catering companies in particular, but also private/owner-managed hotel and restaurant businesses, invest a great deal of time and money in developing and implementing such marketing activities. Even if they do not, the product or the location often act as attractors, or, during an initial introductory meeting, the atmosphere conveys the impression of an ideal working environment; social media often does the (deceptive) rest. Subsequently, these young hospitality professionals have had to learn that they are merely low-cost (not to say 'cheap') labour, who are not even provided with the content of traditional vocational training, let alone the contractually agreed time for their studies – and other benefits and perks (including, among other things, the implementation of optimisation projects) are (as yet) not even mentioned here. What is commonplace in other sectors, such as Christmas and holiday bonuses, 30 days of annual leave, and reliable work and holiday scheduling, is more the exception in the hotel industry, even at establishments that are bound by collective agreements through their membership of DEHOGA (the German Hotel and Catering Association). This, along with many other symptoms, shows that little has changed in the minds of past and present managers: above all, young staff are expected to perform, rarely to have opinions of their own, but most importantly, it is all about numbers, numbers, numbers – about making the most of minimal resources in the interests of absolute cost efficiency and profit maximisation. Lean management, the panacea in times of (economic) crisis, is still practised on a daily basis in an industry that thrives on and because of its people, even though the Baby Boomer and Generation X cohorts have experienced first-hand, on at least one occasion, where this leads. The 'leaner', the better – admittedly, this is not always the intention, but if there are no applicants, no one can be hired. Or can they?

When product and operations become the arguments for lean management.
In the private hotel sector, an additional factor is that the owners or operators are often unable to let go. Everything and everyone is monitored down to the last detail. If such details are not communicated proactively, it is tantamount to the end of the world in terms of product damage. If multiple owners or (appointed) managers are involved in operations and cannot agree, staff are allowed to choose which process or procedure to follow … it will be wrong anyway. Managers rarely appreciate the stress that both lean management and constant monitoring and disagreement – in other words, the ultimate lack of clear structures – cause among team members. Very rarely do they admit that many mistakes and points of criticism in day-to-day operations are the result of this. And, after all, 'taking the plunge' has never done anyone any harm. As a result, managers dispense with proper induction, training, further education and/or professional development without considering the consequences, particularly for the people involved (i.e., employees and guests) and, subsequently, for the company's turnover and, ultimately, its very existence. 'Lean initiatives' are not thought through to the end; 'quick wins' (e.g., through one-sided targeting of specific groups and markets) and short- to medium-term cost-reduction measures are often decided on in passing and are then usually implemented only half-heartedly. However, even when – supposedly – every penny is not being counted, investments tend to be made selectively (not only in individual areas, but often also limited to individual departments or team members), and 'goodies' are in many cases nothing more than greenwashing. Employees talk of exploitation and window dressing. Employers argue that they regularly invest in the development of their employees, or at least have done so in the past. However, it is often the case that employees leave the company sooner or later, and therefore the financial investment would not have been worthwhile. In times of low turnover, low capacity utilisation and/or low demand (here, it is permissible to ask: Why is capacity utilisation so low? Could it be the product, or a lack of specialist expertise due to insufficient training, and/or a lack of employee motivation due to insufficient support, that is preventing customers from coming [any longer]?) After all, personnel costs are generally the highest item in business analyses. Therefore, it makes sense to start here first. Furthermore, there is still a widely held view that it is necessary to put the brakes on here and there in terms of flexibility, authority and employee benefits, as – at least some – team members would otherwise quickly take advantage of this and overstep the mark. Moreover, the product has been carefully considered down to the last detail over a long period of time. After all, a minor deviation – such as a different arrangement of the buffet, a change in the décor or a modified menu – constitutes an intervention in product marketing, which is the foundation for so much more.

People's business without communication and appreciation?

But what are the consequences of this 'logical' approach? I once compiled a list of very different kinds of outcomes. I have experienced all these situations in my roles as a guest, as an auditor, as a consultant, as an employed manager, as a mystery guest, and as an interim manager. However, regardless of my role, I was always shocked by how little appreciation for one another, how little honour and pride, is demonstrated in the industry as a result. Does the saying 'If you don't amount to anything, you'll end up a publican!' still hold true? And does this mean that a ‘people’s business’ is increasingly losing its appeal and character? My blog is intended to serve as an inspiration for all those who have recognised that change is necessary. It is intended to provide impetus for all those who want to shape this change actively and differently – in a way that is simple, open-minded and immediate. It is intended to serve as an encouragement to take a different approach to employee motivation, employer branding, business management issues, apprenticeships, further education, continuing professional development, the shortage of managers and manager development, as well as many other directly and indirectly related topics. And it is intended as an invitation – to employers and (potential) employees – to reach out to one another and to talk to each other. Only through effective communication can weaknesses in day-to-day interactions and in the employer product, as well as in employee performance, be identified and addressed constructively. As part of my work as an auditor, I regularly take a look behind the scenes in the hospitality industry. What I see there is often depressing and appalling. Often, there are no proper changing rooms for staff, who are expected to present themselves to guests in a smart and professional manner. There are no staff rooms; in most cases, however, team members do not have time to take a break anyway, given the limited staffing resources. The list of examples, which also includes issues such as performance-related pay, overtime compensation or simply the tone of communication within the team, could go on more or less indefinitely. In many businesses, there is a long way to go before there is fair, collaborative teamwork, or even compliance with the applicable laws, requirements and regulations. When these weaknesses, not to say grievances, are brought to their attention, many managers respond with a lack of understanding or with the usual platitudes. They claim that a lot is being done (although it is often not possible to specify what), but that team members simply do not know how to appreciate it. Some people are simply 'naturally unmotivated'. The fact that satisfied staff, a positive corporate philosophy and respectful cooperation ultimately form the basis for (paying) guests feeling comfortable, wanting to return and becoming advocates is no longer just 'ethical rhetoric'; it is a fact.

And so the cycle continues …

Unfortunately, it is also a fact that the next generation of managers approach their roles and positions with the same lack of empathy and failure to change perspective as long-serving hotel managers and restaurant managers. Sometimes this is because they have been trained by people who are not specialists in the field and who often have few or no specialist or leadership skills themselves. In most cases, it is simply because people are not trained at all or not trained sufficiently in the field of 'leadership' and have virtually no experience in human resource management. However, it is also not uncommon for people to become jaded over the years, to throw their ideals overboard and to simply act in the way they themselves experienced in the past. People are still promoted on the basis of professional expertise, and often only because they have spoken up or positioned themselves as a workhorse who never claims overtime. Sometimes, too, people are promoted as a way of getting them out of the way, to a position where they can (supposedly) do little harm. Even 40 years after I entered the industry, there are still many patriarchs, many kings in their hospitality comfort zone, who practise a leadership style that was out of fashion even in the past. People who fail to see the potential within their teams, who even suppress it, or who ignore it until innovation, ideas and the will to change have withered away.

Human capital is increasingly leaving the industry.

With a great deal of luck, these employees will hand in their notice in good time and leave the company that is not treating this human capital appropriately. 85% of the students I mentored on a dual study programme in 'Hotel & Tourism Management' are now working in sectors other than hospitality or tourism. We are talking here about around 2,300 students who have left the sector due to their negative experiences within it. In addition, there are those who drop out of their apprenticeships and young professionals who, after completing their training, simply want to leave the hotel and hospitality sector behind. Well, at least their potential is preserved for other businesses – unfortunately, as described, mostly outside the hospitality sector; which, incidentally, brings us back to the (self-inflicted) problem of the shortage of skilled workers. Companies from industry and the wider economy are typically waiting impatiently for service-focused young talent from the hospitality sector, enticing them with attractive working hours and generally better working conditions, not to mention the salary. Proactively utilising and developing this kind of human potential has been, and continues to be, neglected far too often in the hospitality industry. People hardly sow anything, they sow at the wrong time, in the wrong place, or they don't sow anything at all, and then they are surprised that they don't reap anything. The aforementioned 'hospitality industry overlords' (primarily salaried managers) perceive every suggestion, every improvement, every opportunity for optimisation, every reference to the need for change as an encroachment on their own comfort zone, as criticism of 'their baby' – and as an immediate threat to performance-related bonuses, which, however, are only due to them, not to the teams. Some people fear that employees are always trying to outsmart them anyway. 

Best practice in industry and commerce: the company suggestion scheme.

Companies in industry and commerce have long recognised the value of human capital and know how to use it to their advantage. If we take a look at industrial manufacturing companies, we see that, year after year, cost savings in the billions are achieved through a company suggestion scheme, through ideas and suggestions from employees who drive, sustain and advance the innovative strength of these very groups, companies and operations. Approximately one third of these savings, which have an extremely positive impact on the balance sheet, are paid out to employees in the form of bonuses. And in the hospitality industry? Here, many managers tend to perceive suggestions for improvement – whether from staff or from guests – as criticism of their own competence, rather than as opportunities. Guest reviews are dismissed and brushed aside with arguments such as, 'Guests are becoming increasingly demanding and want to pay less and less. It's their own fault if the service isn't up to scratch any more,” even though guest reviews represent the most cost-effective form of feedback. 

Is it a lack of courage or a lack of good products?

The fact that the pricing problem is also self-inflicted is simply ignored. Is there a lack of courage to charge a fair price for a high-quality product and a genuine service? Or is there a lack of good products that are worth a good price? Suggestions, tips and conceptual approaches from team members are immediately consigned to the ‘big round tray’ (the wastepaper basket) without even being given a moment's thought. Requests to expand the scope of responsibilities are rejected out of hand; employees are not allowed to do this – but perhaps they can do it much better than their managers and therefore pose a ‘threat’?! However, it is not always just a matter of financial recognition or self-promotion. In many cases, it is about recognising individual needs and values, as well as about creating meaning. What is important to Employee A may be completely irrelevant to Employee B. Identifying these motivational factors and using them to create value-added and profitable value creation processes that improve the overall situation for all parties involved is at the heart of a programme I am currently developing. The foundation of my approach is to develop smart agreements and implement their provisions for the benefit of the contracting parties, but also for the benefit of the guests. Whether in everyday situations or when considering strategic matters, close collaboration between team members and managers in developing goal-oriented plans, both operationally and strategically, is indispensable and a key to entrepreneurial success. However, the examples and concepts that I will present in excerpts on my blog – not in full, as I also plan to publish a book – are not aimed solely at hospitality business owners and their staff. Trade associations and, for example, institutions and organisations involved in vocational training, such as chambers of commerce and industry, professional associations or trade federations – in this case, DEHOGA – should also rethink their long-established structures. It often takes years for changes to be incorporated into a vocational training framework. In reality, by that point, these frameworks are already obsolete because they are out of date. New forms of training that meet the short-term need for ‘trained’ workers (in the sense of ‘hands’ that have been brought up to speed) are long overdue and are only now (although the need has existed for many years) gradually finding their way into businesses. A number of vocational colleges already offer school-specific forms of training; however, this information has not yet reached the industry. Furthermore, examination processes and content are still guided more by the preferences of examiners than by the content of the training framework plans.  Often, a single seed is all it takes to reap a bountiful and innovative harvest – sooner or later. Let's SEED!

And now I look forward to seeing the comments on this post.