Challenges of Attracting and Retaining Workforce in Hospitality Industry

This essay discusses the challenges of attracting and retaining a workforce in the hospitality industry. It covers issues related to HRM, theories and models, diversity, three generations within the industry, and internal marketing. The article also explores the impact of turnover, job satisfaction, and recruitment methods. The ethical considerations of HRM and the impact of external factors on the industry are also discussed.

1The key challenges of attracting and retaining a workforce in the hospitality industry
THE KEY CHALLENGES OF ATTRACTING AND RETAINING A WORKFORCE IN THE
HOSPITALITY INDUSTRY
The key challenges of attracting and retaining a workforce in the hospitality industry
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2The key challenges of attracting and retaining a workforce in the hospitality industry
The hospitality industry gained the attention of many researchers because of its dynamic
nature as a service sector. It requires the optimal human resources management (HRM) to ensure
the delivery of professional service. The challenge is high in the hospitality industry to recruit
and retain talented employees and management staff. The hospitality industry provides intangible
services where the human resource management (HRM) should act effectively in recruiting to
enable the organization to succeed. Many developing countries depend on the tourism and
hospitality to generate revenues and enhance the economic development (Huda, Haque, & Khan,
2014).
The hospitality industry involves all of the characteristics of the service industry. It is
described with intangibility, consumed at the time of production and heterogeneity. Also, it is
considered a human resource-centric industry. The employees become an integral part of the
service. They should provide a high-quality service that meets the customers' needs and ensures
their satisfaction. According to Lashley (1995), as cited in Bharwani & Butt (2012), the
organizations operating in the hospitality industry could establish competitive advantages if they
can effectively manage the service quality that is considered an intangible service. The
competition intense has increased due to the globalization of services that requires the
organization to adopt differentiation strategies. Service development is essential to the success of
the hospitality organizations.
This essay discusses the human resource related issues in the hospitality industry with a
special focus on the employee recruitment and retention. It analysis the ethical issues related to
HRM, theories and models, challenge that faces the hospitality industry and the problem of
diversity, the existence of three generations within the hospitality industry organizations and the
internal marketing.

3The key challenges of attracting and retaining a workforce in the hospitality industry
Hospitality industry refers to the services offered in hotels, licensed clubs, restaurants and
motels also there are many other sub-sectors. Tourism is among the most important industries
worldwide, where hospitality has a significant contribution to it. According to Nivethitha,
Dyaram, & Kamalanabhan, (2014), it is the world's second employer in the tourism industry. The
hospitality industry is heavily reliant on the manpower resources, it is considered the largest jobs
generator that provides more than 212 million job opportunities. One of every nine workers
worldwide is employed in the hospitality industry. Despite these facts, it is hard to attract
talented labor to this sector and it suffers from the high turnover rate that represents a significant
loss in terms of the companies' investment in the human capital. One of the major characteristics
in the hospitality industry is its high mobility. People can easily transfer to a similar job in
another company.
The processes of recruitment and selection are related to the performance of the
employee, work attitude and absenteeism. Employees who are recruited through direct
application to the organization gain accurate information about the job duties and the
organization. They enjoy long staying and better performance compared to those who are
recruited via employment agencies. Recruitment plays an important role through which the
organization is able to select the employees based on their characteristics, knowledge level and
personality in relation to the job requirements. This process is likely to result in an improved
service quality. The practices of the hotel industry reveal that organizations fail to match the job
requirements with the right hiring specifications (Murray et al., 2017).
It is argued by Paraskevas (2000), as cited in Nivethitha, Dyaram, & Kamalanabhan,
(2014), that due to the instability in the environment, the hospitality recruitment process requires
a job-fit rather than organization-fit employees.

4The key challenges of attracting and retaining a workforce in the hospitality industry
Researchers as Walsh, Sturman, & Longstreet (2010), argue that the HR decision making
involves some critical challenges that threaten its strategic implementation. These challenges are
due to the intangible nature of the human characteristics and the value of the brand name of the
hotels and its recognition. These factors are difficult to be predicted, there is no guarantee that
the investment in the human capital will lead to better performance of the employees that
contributed to the better financial performance of the organization. Although, the hospitality
industry relies on the employees to develop and maintain good relationships with the customers
that make them loyal to the brand. These challenges cause the hospitality organizations to
operate with lean margins.
Every organization seeks to satisfy its customers and maintain their loyalty. Listed
companies seek loyal investors to keep providing financial resources. This means that the
retention rate involves both the customers and investors. Kramar, et al. (2013b), argue that the
relationship between the employees and organizational performance is a function of certain
conditions where employees have knowledge that exceeds their managers' knowledge, the
employees are motivated to utilize their skills through discretionary effort and the organizational
strategy can be achieved only if the employees contributed to the discretionary effort. This
argument implies that organizations can only compete effectively if they could ensure that the
high-performance employees are motivated to stay in the organization and continue to contribute
to the discretionary effort and the low performance are required to leave. The significant role that
the high-performance employees do to ensure the success of the organizations, encouraged many
organizations to focus on the retention of the talented employees in order not to voluntary
turnover. They tend to offer the talented employees, many advantages, including flexibility,
career development and salary options. This issue is very important, that is why the expression of

5The key challenges of attracting and retaining a workforce in the hospitality industry
the ‘war for talent’ emerged to reflect the intensity of the competition for skilled employees
(Kramar, et al., 2013b).
The job satisfaction level plays a significant role in employee retention. The scarcity of
qualified employees in the hospitality sector represents a massive loss to the organizations
operating in this sector. The employees tend to minimize their contribution to work and lower
their performance level. The Minnesota satisfaction questionnaire and the job descriptive index
are used by organizations to measure the employee's level of satisfaction (Scott, 2015).
According to Kong et al. (2018), job satisfaction directly causes the turnover. The common
factors that lead to turnover in the hospitality industry are represented mainly in the work
environment, salaries provided, fondness towards the firm, the opportunity of escalation
according to their performance level, their acceptance of the work they do, the provided
retirement funds and the flexibility of work. Managing diversity in the workplace can assist in
increasing the employees' satisfaction towards the organization (Hsiao, 2017).
The negative impact of the high turnover rate requires the hospitality organizations to
retain the high-quality seasonal employees. The research previously conducted focused on the
existing employees and the turnover intention rather than the actual behavior. Also, the research
efforts focus on the job satisfaction level. The high similarity between the jobs offered by the
hospitality organizations and the seasonality of the service make the required skills identical.
This means that the satisfaction level is not the main factor that differentiates a workplace from
another. The common reasons behind the low satisfaction level of the employees are represented
in relocating away from the family for long times, seasonality of the service, working for long
hours, night shifts and weekend schedules, fewer opportunities for growth and self-development,
high level of job responsibility and dissatisfaction with the leaders (McCole, 2015).

6The key challenges of attracting and retaining a workforce in the hospitality industry
The recruitment challenge in the hospitality industry led organizations to search for new
methods of recruitment. The social media recruitment is one procedure that has its advantages
and disadvantages. It offers employee business interaction, business to employee interaction and
employee to employee interactions. Organizations can reach employees through their virtual
online career profile. Employees are required to update their information regularly. The
organization can target employees among a large pool of candidates around the world (ladkin &
Buhalis, 2016).
Internal marketing is beneficial for the organizations within the hospitality industry.
Organizations implement the marketing concepts through their frontline staff. Internal marketing
refers to the friendly managerial behavior that yields internal and external advantages. The HR
policies can positively impact the employees' behavior. According to Kusluvan et al. (2010), as
cited in Baker & Magnini (2016), the organizations that possess the internal marketing could
achieve a competitive advantage. The constituency model assumes that the phases of the
planning process are linked to the actions and thoughts of the frontline service providers who can
communicate and maximize the brand value.
Despite the emergence of new recruitment processes, the hospitality organizations mostly
depend on the face to face interviews. By the time they diversified their recruitment methods to
be technology-based through asynchronous video interviews (AVI’s). This method depends on
text questions that are prepared and asked to the candidates who answer online. The candidates
are required to answer, but not allowed to ask questions. This method has many advantages, it
allows the organizations to hire a large number of employees, it saves time and cost as well

7The key challenges of attracting and retaining a workforce in the hospitality industry
(Torres & Mejia, 2017). Sobaih (2018), recommends that job distribution should be done in
accordance with the skills and capabilities of the employees.
There are some causes of the failure of the HRM planning that could be explained
according to the strategic problem formulation theory (SPF). The theory assumes that some
challenges take place in the organizations because of the differences between the organizational
requirements and the employees' needs. The SPF theory assumes that the organization could find
solutions to different problems. Problems are to be categorized, noting that different unobserved
variables are attached to the problems. These variables are networked and their degree of
connectivity could be observed. Applying the model of Human Resources planning in the
hospitality organizations involves eight factors. These factors are represented in the evaluation of
the employees' behavior, the HR costs, the selection of the HR programs, poor system of
consideration, job examination, data analysis, the daily management activities and politics in
organizations. Considering these issues enhance the effectiveness of the HR planning (Saad,
2013).
Strategic human resource management (SHRM) is about achieving the organizational
profitability. The strategic analysis is concerned with the internal and external factors that allow
the organization to create its competitive advantage and achieve the highest performance.
Employees represent the human assets, they are among the intangible resources that contribute to
the creation of the organizational competitive advantage. According to Walsh, Sturman, &
Longstreet (2010), the hospitality service organizations suffer from the low-skilled employees
with a high annual turnover that reaches 100% among the employees and the management staff.
The hospitality industry is affected by three major forces, represented in the demographic
shift, the change in the workforce composition and the industry image. These factors have

8The key challenges of attracting and retaining a workforce in the hospitality industry
impacted the generational phenomenon that affects the organizational ability to attract and retain
employees. From the demographic perspective, the aging population, or the Baby Boomer
Generation or the people born after the world war during (1945 and 1964) and the low birth rates
represent the main concern of the hospitality industry. The industry is massively understaffed.
Also, the hospitality graduates choose to change their required career and find meaningful jobs in
other industries. Many organizations in the hospitality industry employ the Baby Boomers while
the Generation X or people born between (1965 and the early 1980s), continue working beyond
their age of retirement. Generation X is required to adapt to the younger generations with their
different mindset and work attitudes. This also implies that the hospitality industry is witnessing
a turnover culture. Some of the employees consider hospitality jobs as fun, glamorous,
challenging and adventures. Generation Y or people born after 1980, in the workplace have
undeniable significance. They represent 25% of the world population and will continue to grow
to represent 50% of the global workforce by 2020 (Sakdiyakorn & Wattanacharoensil, 2018;
Zopiatis, Krambia-Kapardis, & Varnavas, 2012).
The lack of understanding between the different generations creates conflicts in the
workplace. Each generation has its value system that can negatively impact the overall
organizational performance due to lack of collaboration. Organizations should consider that each
generation has its own drivers and motivations to work that could be economic, social or
political. Open communication between the different generations is recommended to reduce the
barriers between them. Although, the communication itself could cause conflicts because
traditionalists and Baby Boomers prefer face-to-face communication, while Gen Xers and
Millenials prefer the digital communication via email and text messaging (Kapoor & Solomon,
2011).

9The key challenges of attracting and retaining a workforce in the hospitality industry
The ethical theory introduces a clear and precise argument, it assumes that the HRM
activities do not act in isolation of the other organizational activities. The decisions and practices
of the HRM influence other organizational decisions that also affect the HRM decisions. The
external environment affects the organizational decisions, including the hospitality industry. The
impact of globalization and the MNCs direct the HRM decisions that have to respond to the
global demands. For example, in Australia, the government deregulated the labour market and
reformed the workplace legislation. In addition, the HRM decisions and activities have a direct
impact on the society that could help or harm people (Kramar, et al., 2013a). These practices
resulted in the necessity of measuring the HRM-performance to ensure that the human capital is
enhanced to learning and development and to apply their skills in their work in order to achieve
the organizational goals and create a competitive advantage to the organization. According to
Kramar, et al., (2013c), the audit approach involves reviewing the different outcomes of the HR
role and activities. It depends on collecting information about the customer satisfaction to
measure the HR effectiveness. The key measurements, include the turnover rate, the absenteeism
rate, the average days to fill a vacant, compensations, occupational health and safety, equal
employment opportunity, customer satisfaction of the employees performance, performance
management and learning and development.
In conclusion, the hospitality industry refers to the services offered in hotels, licensed
clubs, restaurants and motels also there are many other sub-sectors. It is the world's second
employer in the tourism industry. Despite these facts, it is hard to attract talented labor to this
sector and it suffers from the high turnover rate that represents a significant loss in terms of the
companies' investment in the human capital. The practices of the hotel industry reveal that
organizations fail to match the job requirements with the right hiring specifications.

10The key challenges of attracting and retaining a workforce in the hospitality industry
The significant role that the high-performance employees make in the success of the
organizations encouraged many organizations to focus on the retention of the talented employees
in order not to voluntary turnover. The job satisfaction level plays a significant role in employee
retention. The scarcity of qualified employees in the hospitality sector represents a massive loss
to the organizations operating in this sector. Despite the emergence of new recruitment
processes, the hospitality organizations mostly depend on the face to face interviews. By the time
they diversified their recruitment methods to be technology-based through AVI’s.
The lack of understanding between the different generations creates conflicts in the
workplace. Each generation has its value system that can negatively impact the overall
organizational performance due to lack of collaboration. The ethical theory introduces a clear
and precise argument, it assumes that the HRM activities do not act in isolation of the other
organizational activities. The decisions and practices of the HRM influence other organizational
decisions that also affect the HRM decisions.

11The key challenges of attracting and retaining a workforce in the hospitality industry
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