Hotels. Why the hotel sector is a leader in employee engagement

Transcription

1 Hotels Why the hotel sector is a leader in employee engagement

2 Engagement is at the core of our business strategy. When we look after our people they look after our customers and business success flows from that simple equation. Ben Bengougam Senior Vice President HR, EMEA Hilton Author: Mariana Skirmuntt, Senior Researcher Great Place to Work UK November

3 Hotel industry outlook In 2015, the UK hospitality industry contributed an estimated 57 billion to UK GDP, equating to 3.9 per cent of the total UK GDP. 1 Despite Brexit, travel and tourism in the UK continues to thrive and this country remains one of the most popular tourist destinations. In January 2017 alone the UK received 2.9 million overseas visits, up 11% since January Overseas visitors spent approximately 1.5 billion during their visit to the UK a 15% increase on According to HotStats data, hotels in London recorded a 2.6% decrease in profit per room in 2016 despite a 0.5% increase in revenue per available room. However, it is important to note that 4,500 bedrooms of new supply were added into the capital, which diluted room occupancy performance in hotels resulting in a 0.4% decline to 80.8%. In London, there was a 1.1% increase to in the average room rate achieved which helped to drive growth in Revenue per Available Room (RevPAR). 3 Scotland achieved some of the highest increases in profit per room in the UK and saw a 12% increase. Edinburgh s room occupancy levels also remained strong, increasing by 1.4% to 82.9% enabling hotels to achieve an average room rate of In contrast to Scotland s strong performance, Cardiff hotels saw a 6.1% decline in profit per room due to an absence of events being held in cities such as Cardiff which prevented hoteliers from driving premium room rates due to the significantly low levels of demand. This resulted in a RevPAR decrease of 16.6% in September and a 35.8% decrease in October in Hilton s mission is to be the most hospitable company in the world, and we can only achieve this mission if we attract, develop and retain the best people. While we do not focus on engagement to win awards, we appreciate plaudits and they help us position our value proposition as attractive and competitive. Ben Bengougam Senior Vice President HR, EMEA Hilton Brexit has also caused the pound to decrease in value which could make the UK a much more attractive destination for potential visitors. Although the full repercussions of Brexit are still not fully foreseen there are many challenges that organisations in the hotel sector will have to overcome. Customers, especially millennials, expect hotels to provide them with the kind of personalised experience they can t get elsewhere and, through their strong presence on social media, they also expect to have two-way communication channels such as Twitter, Facebook and Instagram that can provide them with real-time marketing. This is also beneficial to the hotel which, in an increasingly digital world, should be aware of the reputation they have and what is being said about them. The Internet is increasingly becoming the preferred way for customers to shop. Travel agencies and intermediaries have been quick to identify this gap in the market and there are a number of online travel agencies that are helping travellers book rooms that are most suited to their needs and which focus on the elements that are most important to the customer. This has resulted in a market disruption regarding how customers book rooms which has led to a decrease in visibility for hotel brands and a weakened relationship between customers and hotel operators. Moreover, research from PwC shows that over the past six years online travel agencies now take up to 20% of the price 1 Oxford Economics & British Hospitality Association (September 2015). Economic contribution of the UK hospitality industry. Available at: 2 Office of National Statistics (ONS) (January 2017) Statistical bulletin: Overseas travel and tourism. Available at: 3 TRI Hospitality Consulting (December 2016) UK Chain Hotels Market Review. Available at: trihospitality.com 3

4 of a booking as commission, which can significantly reduce a hotel s margins. 4 Likewise, online travel agencies continue to strongly impact the prices hotels can quote and the terms of competition for pricing. Companies like Airbnb or HomeAway have successfully merged the concept of technology and hotels whilst avoiding some of the costliest elements of running a hotel such as maintenance, rent, amenities and employee-related costs. Several online platforms have been quick to adopt a new business model and embraced the sharing economy but have caused other businesses to struggle. However, letting rooms through Airbnb and similar sites have increasingly been receiving pressure from the government in the UK, for instance, there are plans to overhaul the current Rent a Room tax scheme as well as from neighbours, who complain that the home-sharing business has disrupted the short-term housing rental space. We love blending cultures and are proud of our differences but we all share the same passion: people. Sophie Kilic Senior Vice President HR AccorHotels Top issues for HR Teams The British Hospitality Association (BHA) has estimated that between 12.3% to 23.7% of the UK hospitality sector is made up of EU national workers, 15% are nationals of the rest of the world and the remainder are UK employees. This is a much higher proportion in comparison to the rest of the UK workforce, where only 6.9% of the workforce are European nationals. 5 The concentration of EU nationals in the workforce also varies depending on the region in which they work. This is due to a number of factors; UK employees may be less willing to live in expensive areas such as London where rent prices are higher, and they may be less willing to commute further distances to go to work whereas EU nationals are in essence already geographically mobile. In the post-brexit scenario, recruiters working in this industry face some uncertainties around free movement of labour and the future pace for sourcing European talent to fill their roles. In sum, recruitment could be the biggest challenge for hotels, especially since they are largely dependent on non-uk employees from European countries. The BHA predicted that if the UK loses access to EU national workers there could be a recruitment gap of over 1 million workers by 2029 over a quarter of its expected total. It is not new that the hotel sector suffers the pervasive effects of labour turnover. But employee retention is more critical now than ever. A Deloitte report estimated that employee turnover in the hospitality industry is approximately 31% and that hoteliers spend an average of 33% of revenue on labour costs. 6 Organisations need to place more emphasis on retaining their talent, especially in a post-brexit environment where they may no longer have access to a steady stream of EU national applicants. Organisations should place a stronger focus on continuous learning and offer their employees training that gives them ownership over their learning. HR experts recommend that hotels should give their staff the chance to make lateral moves across the organisation and offer them the opportunity to learn new skills and take on new challenges and responsibilities. In addition, hotels should foster a culture of two-way 4 PricewaterhouseCoopers (October 2013) How Can Hotels Achieve the Right Kind of Growth in a Digital Age? A Toolkit for Fighting Commoditisation. Available at: 5 KPMG & British Hospitality Association (March 2017) Labour Migration in the Hospitality Sector. Available at: 6 Deloitte (2015) Hospitality Report. Game Changers or Spectators. Available at: tourismhospitalityleisure 4

5 communication that allows employees to continuously feedback and report any issues that they may be encountering at work. This would allow them to tackle any matters that employees are struggling with straight away rather than waiting for an employee to leave the organisation before they become aware of any problems. Many organisations in the hotel sector are already working alongside schools and colleges to provide young people with the opportunity to get some work experience and employability skills whilst at the same time promoting careers in the industry. Hotel organisations need to find new ways of sourcing and attracting candidates and designing strategies for integrating technology into their work in an intuitive and personalised way that would benefit both employees and customers. Hotels HR teams play a vital role in determining the performance of their businesses since they ensure the appropriate levels of headcount and define the kind of staff required to deliver customer satisfaction. Similarly, HR managers in the hotel industry are key stakeholders responsible for understanding the factors that contribute to employee disengagement. A vast research literature has been showing that tackling the issues relating to unmotivated staff helps to prevent costly and unproductive staff turnover. 7 How do the Best Workplaces compare? Best Workplaces in the hotel sector have a good gender balance: 49% of the full time workforce are women; the national average is 47%. 8 On average, 9% of the workforce is working on temporary employment contracts. In terms of job tenure, 42% of employees have worked for the organisation for less than two years. By comparison, the average job tenure in financial services is seven years. Staff turnover is high a median of 35% compared to a national average of 13%. 9 There is a clear vision shared from management downwards, a clear sense of purpose throughout the organisation. The whole organisation is very customer focused and this leads to a great sense of pride. We are doing great things in the market and I truly think we are leading the industry with many of our initiatives. Hilton s commitment to protecting and celebrating diversity, of all types, is really inspirational. HIlton employee Involuntary staff turnover is 7% in financial services Best Workplaces it is 5%. Organisations received, on average, 20 applications per open position. As a comparison, IT Best Workplaces receive 28 and Best Workplaces in the bio/pharma sector receive % of Best Workplace hotel organisations offer maternity leave over and above the statutory minimum; in bio/pharma Best Workplaces the figure is 30%. 7 See, for instance: Cook, S. (2008). The essential guide to employee engagement: Better business performance through staff satisfaction. Philadelphia, PA: Kogan Page. Gostick, A., & Elton, C. (2007). The carrot principle: How the best managers use recognition to engage their people, retain talent, and accelerate performance. New York, NY: Simon and Schuster. 8 The World Bank, Labor Force, Female (% of Total Labor Force), The World Bank Databank (2016). 9 CIPD, Resourcing and Talent Planning: Annual Survey Report

6 Crafting a culture of Trust in the Hotel Industry Best Workplaces in the hotel industry sector are inspiring because they are: 1. Attracting a young workforce Best Practice: At Hyatt Hotels Corporation, hotel staff take candidates on tours of their prospective departments during the interview process. They found that spending 30 minutes in, for example, a hotel kitchen chatting to the chefs and servers, feeling the rhythm of the operations, is an invaluable exercise in determining if candidates will be a good fit. These interview tours are almost like speed dating; candidates either fall in love on this mini first date, or realise that there is just no spark between them. Best Practice: At AccorHotels they truly believe in the value of apprenticeships, not only for the individuals involved but for ensuring the future success of the business. Apprenticeships give them access to the best and brightest, budding industry professionals. Their apprentices have gone on to have rich and rewarding careers and the success of their programme is demonstrated by the fact that more than 80% of their apprentices stay with the business once they have completed their apprenticeships. 2. Retaining and developing high potential talent Best Practice: At Hilton, employees are interviewed at hotels before they get hired and complete an exit interview when they leave, but what about in between? At Hilton they teach managers about the importance of retaining great employees and ensuring that they are engaged and happy. They conduct Stay Interviews to ensure that managers are asking the right questions and taking action to keep employees actively engaged. Best Practice: Wyndham organises a certificate presentation to celebrate their staff professional development. Throughout the year, they record a range of certificates earned by their associates at different sites (NVQs, quality accreditations, degrees, marketing qualifications, etc.) and share a big presentation showcasing all the certificates that their associates have undertaken. Wyndham finds it very inspiring to watch staff collecting their certificates and they believe it encourages associates to undertake qualifications and development, many with the company s support. 3. Implementing initiatives to support a healthy work-life balance for employees Best Practice: Given the nature of the hotel industry many employees will need to work during public holidays such as Christmas day. If they do need to work, Hyatt Hotels Corporation rewards them with either two lieu days or double time and one lieu day. This is their way of thanking their employees and recognising the sacrifice they make by leaving their families or loved ones during holiday seasons. I feel that Hilton supports the growth of careers on all levels. Furthermore, the company provides exposure to front line staff to projects and management tasks. It is great to see so many people excel in their careers and to be a part of a developing work place. Hilton employee There is a great sense of togetherness here at the Churchill which makes working here a lot better. Hyatt Hotels Corporation employee 6

7 Best Practice: After six months service, employees can benefit from two free breaks of one or two days in any AccorHotels hotel (excluding Sofitel and some franchise hotels) in a 12-month period. I believe that my General Manager and deputy General Manager really try to look after all their staff. They engage in personal conversations when they can in place of just work related. AccorHotels UK employee 4. Integrating culturally diverse employees Best Practice: Learning English as a second language is an important personal and career goal for many employees at Hilton, which is why they provide online English learning for employees. The programme allows employees to follow a personalised, selfdirected learning option, encouraging them to develop their ability to write and speak English as a second language. I work for Sofitel for 13 years, I travelled around the world with them and got to work in seven different countries making me a better person and manager. They gave me the chance to change my life. Sofitel employee Team members from different cultures make the environment more interesting, with everyone bringing different ideas to the table. Hilton employee Best Practice: When employees relocate to the UK or move from another country, AccorHotels allows them to take advantage of a free service that assists employees with their move to the UK. The service includes an app to help manage the move, a moving specialist to advise employees, relocation essentials, a service that enables employees to pay rent after they get paid, special deals and accommodation for stays from a few months to a few years. The organisation is so diverse and mixed, I have colleagues and friends with backgrounds from all over the world. Furthermore there is an on-going initiative to promote inclusiveness and a community spirit that is much appreciated. AccorHotels UK employee Helping you improve business performance We help organisations create great workplace cultures which ultimately improves business performance. To find out how we could help your organisation: Call info@greatplacetowork.co.uk Visit 7

8 Great Place to Work UK is a consultancy specialising in workplace culture, helping organisations to create exceptional, high performing workplaces where employees feel trusted and valued. We help employers improve recruitment, retention and productivity by putting employees at the heart of the organisation, analysing what they think and feel and identifying the real issues that need to be addressed. Part of a global organisation, we apply data and insights from over 10,000 organisations across the world to benchmark individual performance and advise employers on how to continuously improve employee engagement and wellbeing and so help build and sustain business performance. We run the Best Workplaces awards to enable the organisations we work with celebrate their achievements, build their employer brand and inspire others to take action. We share our learnings through our research and publications at national, regional and global level, as well as through conferences and events. T +44 (0) F +44 (0) info@greatplacetowork.co.uk Great Place to Work UK The Loom, Unit G.2, 14 Gower s Walk, London E1 8PY Registration Number VAT Registration Number: