Have we entered the performance and talent revolution?

Martin-Christian Kent, Executive Director at People 1st explains how their research shows that many are having to rethink on how to maximise staff.

It’s a challenging time to be dealing with HR issues in the hospitality industry, but with those challenges come opportunities. Research we’ve conducted with 40 leading hospitality companies shows that many are rethinking the way they maximise value from their staff. Central to this are interventions to increase retention and performance.

Many businesses describe themselves as being “on a journey”, and that journey signals a break from the ways things have been done in the past. For many, the focus on staff retention and performance is a logical response to rising staff costs, recruitment difficulties and changing employee attitudes. In essence, the old ways are no longer working effectively.

Most hospitality businesses would argue that they have always focused on retaining talent, but our research clearly highlights that they are now doing so on an unprecedented scale. While businesses’ retention strategies differ, they are increasingly broad and far-reaching, including rethinking how to have a genuine, two-way dialogue with staff and tailor contracts, hours and benefits to suit different needs.

Businesses are harnessing technology to facilitate this engagement, allowing staff and employers to communicate with one another in ways that were unimaginable a decade ago. At the same time, businesses continue to invest heavily in effective people management skills to ensure staff are fully engaged and motivated. 

Businesses are also looking to make their progression opportunities more transparent by promoting both vertical and horizontal opportunities. Through interactive maps, staff can also access appropriate training and pay increases are often linked to the successful completion of appropriate training. This is something we have seen our clients value very strongly.

In addition, the apprenticeship levy and reforms have led many large businesses to rethink how they can maximise apprenticeships. We’re seeing a clear shift to higher-level apprenticeships that are used to support retention and progression, rather than simply being used as an entry route. For many years, People 1st has highlighted the strong link between high labour turnover and skill gaps, and how they are undermining productivity levels within the industry. Businesses are now much more likely to focus on staff retention, training and development to increase performance than they have been in the past, but some are also looking taking a much wider view.

A number of businesses are looking afresh at their HR strategies as part of a wider re- engineering of their customer journey and experience. Technology is changing the way a business interacts with its clients and, as part of this, some are looking at ergonomics, job design and their processes to increase customer satisfaction, spend and return business. Whilst doing so, they are also placing more emphasis on increasing productivity.

As many employers acknowledge, this rethinking of HR approaches is a journey. Some are further along than others and it may take a while before the industry reaches its destination. However, not only will these changes deliver real benefits to a business, they should have a positive impact on the industry overall.

Hospitality is likely to reduce its demand for labour as a result of better retention, as well as becoming a more attractive career destination. Both will be critically important as unemployment continues to fall and we prepare to leave the EU, making the labour market even more competitive.

This break from the past is likely to continue to have positive repercussions for the effectiveness of HR approaches in the industry. There has probably never been a more challenging time to work in hospitality HR – and it has certainly has never been under so much scrutiny and measurement – but, equally, its impact on business effectiveness has never been as fully appreciated as it is today. In other cases, businesses are beginning to ask questions about whether they need to start thinking differently.