The Challenge of Human Capital
While the gravity of the effects of this pandemic is undeniable at various levels, challenges in Human Capital in hospitality have long revealed a profound misalignment with the job market. An opportune context for reflection on the subject? Churchill would probably consider it so, given his old maxim: “Never waste a good crisis!”
A Challenging Context
Between 2004 and 2016, the pace of hotel openings increased from 563 establishments to 1,238 (120%), while the number of sector professionals only modestly grew by 34%, from 27,000 to about 35,000 (Tourism of Portugal, 2018). Together with other variables, this fact caused a sharp decrease in the total volume of qualified applications received by companies. If recruitment became increasingly difficult, retaining selected professionals also did not become easier. Baum (2019) defines this phenomenon as a “prevailing culture of high turnover.” In 2018 alone, the US tourism sector saw its workforce voluntarily transition at a rate of 52% (Bureau of Labor Statistics, 2018). On the other hand, it is known that 29% of hospitality graduates leave the sector in the first ten years of their careers (Brown, Arendt, & Bosselman, 2014).
As if these variables were not enough, there was the entry of the so-called “Generation Z” into the workforce. This generation has profoundly distinct characteristics from previous ones, prioritizing values such as geographic and organizational mobility, integrating professional life into personal life, and aspiring to a career pace superior to other generational segments.
In this immensely challenging context, there is unexpectedly the outbreak of a pandemic, which, in the sector, led to the abrupt closure of more than 75% of existing establishments (AHRESP, 2020), affecting professionals in the midst of seasonal hiring, those in the probationary period, fixed-term contracts, and even those under permanent contracts, mostly subject to the simplified layoff regime.
Looking to the Future
In the era of real-time, interaction with professionals inevitably needs to be proactive and timely, through Employer Branding (Gehrels, 2019), where the employer’s presence in communities of digital natives captivates its target, long before the need for effective hiring. It is urgent to reinvent the industry’s perception for a generation whose commitment is generated through identification with causes, mobility, employer experience, etc. Adjusting hiring paradigms, prioritizing the flexibility and agility that new professionals want to assume in their interaction with companies, in the era of the Gig Economy. Resorting to technological solutions that allow for processes of true flexibility, control, and transparency in accessing professionals validated for experience and performance, in strictly necessary time periods, without the usual constraints of admission or awarding through external partners in outsourcing.
Regarding retention, in a world of information-first, there is an increasing organizational need for “meritocratic” postures. The professional must understand the consequences regarding the performance levels he/she may adopt. Be aware of the professional evolution that can be achieved in the company and the expected period for it to happen. Strategies such as Gamification help employees understand what is expected, understanding the value they add to the whole (Narayanan, 2014). Where the remuneration system is a direct reflection of the individual contribution level, unequivocally distinguishing high performers from performers based on the merit of their results. Systems that include non-monetary elements relevant to each one’s lifestyle (e.g., subscription services, insurance, gym contracts, mobility allowances, streaming, etc.), often of greater value than the effective cost borne by the company, and with great benefits in terms of employee engagement.
In short, only with high priority on the sector’s agenda, the consistent implementation of innovative approaches can reverse the mentioned trends, whose structural impact effectively conditions the destinies of hospitality. It is therefore imperative to look forward with resilience and pragmatism, just as Abraham Lincoln assumed that “the best way to predict the future is to create it”.
Written by João Silva Santos
May, 2020
This article was published in Rede T. You can access the online version here.
