Talent Management Practices in South African Hotel Groups

1 Southern African Business Review Volume 13 Number 3 2009
Talent management: An empirical study of
selected South African hotel groups
P.A. Grobler & H. Diedericks
A B S T R A C T
This article sheds light on the use of talent-management practices in
some of the major hotel groups in South Africa. Growing numbers
of organisations globally as well as in South Africa are embracing
the concept of talent management, as it has a major impact on the
company’s competitive advantage. Results reported in the 2008
Travel & Tourism Competitive Report issued by the World Economic
Forum (WEF 2008) indicate that as far as the Human Resources
dimension of companies in this industry in South Africa is concerned,
they fare fairly poorly. As this industry is people intensive, a
closer investigation of this aspect was necessary. The research
was undertaken in a subcomponent of the tourist accommodation
industry, namely hotels. A cluster of 14 hotel groups, representing
33 995 hotel rooms (approximately 77% of all the hotel rooms
in South Africa) participated in the survey. Despite the negative
finding of the WEF, the results indicate that the hotel groups to a
large extent apply the principles underlying talent management
within their companies. However, some problem areas do exist, and
recommendations are made in this regard.
Key words: talent management, talent retention, talent development, talent deployment,
human capital management, talent pools, talent value, competencies,
skills, distinctive capabilities, competitive advantage, talent supply, talent
demand, competency inventory
Prof. P.A. Grobler and Ms H. Diedericks are in the Department of Human Resource Management, University of
South Africa. E-mail: [e-mail]

P.A. Grobler & H. Diedericks
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Introduction
The greatest challenge facing countries in the world today is the creation of wealth
for their citizens. One strategy to achieve this is to provide jobs for as many people
as possible. However, this can only be achieved if the country experiences consistent
economic growth. According to the World Economic Forum (WEF) (WEF 2008: xi),
travel and tourism has become a major player among the key industries in generating
wealth over the last 60 years. This industry now accounts for approximately 10.4%
of the global gross domestic product (GDP), 12.2% of world exports and 9.5% of
world investment (Blanke & Chiesa 2008b: 3). It is also one of the fastest-growing
industries in terms of foreign exchange earnings and job creation, as healthy travel
and tourism sectors provide important opportunities for countries to raise living
standards and – particularly in the developing world – to tackle poverty alleviation
(Blanke & Chiesa 2008a: xiii). From the foregoing, it is clear that the world travel
and tourism industry is profitable and expanding. Moreover, in South Africa the
industry has a major impact on the economy, with approximately 8.5 million
international tourists visiting the country in 2006 (Visser 2007: 43–44). Thus, there
is no doubt that this segment of the economy needs to be constantly improved and
expanded.
Problem statement
According to the 2008 Travel & Tourism Competitiveness Report compiled by the
World Economic Forum (2008: xvi), of the 130 countries participating in the
project, South Africa was ranked at number 60. The country was evaluated on 14
different pillars. This is cause for concern, as this industry can have a major impact
on the economic growth of the country. It is even more disturbing that in the area
of Human Resources (HR), the country was ranked 118th out of 130. Please note
that certain HR components, such as the training of staff, did receive a very positive
rating, while others such as hiring and firing practices were rated very low. However,
the people component needs to be managed as an integrated whole to enable a
company to obtain and maintain its competitive advantage, and all practices need
to be synchronised.
Talent management
As a service industry, tourism is highly people intensive, and in this context,
the management of employees working in the industry is a critical function.
The continued success of any organisation in this industry is dependent on the

Talent management: An empirical study of selected South African hotel groups
3
employees’ contribution and commitment (Baum & Kokkranikal 2005: 86). Success
can no longer be measured alone by the amount of money a company has. The
talent it possesses in the form of its employees’ skills and competencies, leading to
organisational capability, has become the key to success in today’s highly competitive
business environment (Lockwood 2006: 2; Lawler III: 2008: VII). So why is talent
so important? According to Cheese (2008: 39–40), the following reasons can be
identified:
• Talent generates high performance, which in turn attracts new talent and creates
the means to reward it.
• Talent drives improvements in productivity, quality, innovation and customer
satisfaction, which in turn feed into the bottomline results.
Without talent, the industry is thus doomed. While the industry offers well-
qualified individuals such as graduates exciting and rewarding career opportunities,
it also needs a vast number of operational staff. Low entry barriers and high turnover
pose particular HR challenges to management in this area (Haven-Tang & Jones
2006: 91). Against the background of the poor human resource results obtained,
the question can be asked: “How can this important and vital asset be nurtured?”
The answer can be found in the relatively new concept of talent management
(Armstrong 2006: 289; Becker 2007: 42–61; Corsello 2006: 12; Goffee & Jones
2007: 72–79; Ingham 2006: 20–23; Joerres & Turcq 2007: 8–13; Landes 2006: 27–
29; Meisinger 2006: 10; Oakes 2006: 21–24; Reindl 2007: 38–41; Silverman 2006:
11–15). According to Schweyer (2004: 22), talent management can be defined as
follows:
... the sourcing (finding talent); screening (sorting of qualified and unqualified applicants);
selection (assessment/testing, interviewing, reference/background checking etc. of applicants);
onboarding (offer generation/acceptance); retention (measures to keep the talent that con-
tributes to the success of the organisation); development (training, growth, assignments, etc.);
deployment (optimal assignment of staff to projects, lateral opportunities, promotions etc.) and
renewal of the workforce, with analyses and planning as the adhesive, overarching ingredient.
Thus, for talent-management initiatives to be effective, organisations need formal
processes, with many stakeholders involved and strong links between leadership and
talent to translate into specific organisational value-based behaviour (see Figure 1).
In order to successfully tie together all these activities indicated in Figure 1, the
leaders in human capital management should actively pursue a number of activities,
which will be explained later in this article. Before this is done, it is important to
mention that talent management will only be effective if the following conditions
exist:

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Source: Armstrong (2006)
Figure 1: The elements of talent management
• Talent must be viewed by senior management as a strategic asset, and its
importance for the company must be regularly communicated to everyone in the
organisation.
• Sufficient resources (funds) should be made available to support all the talent-
management efforts.
• An effective talent-management plan and programme must be aligned with the
company’s vision, culture and overall strategy.
• People and positions must be tracked through a technology-based talent-
management system.
• A healthy working relationship between the human resource management
department and line managers must exist.
• It is not the talented individual that is important, but the processes that create,
manage and organise talent. These include having the right structures, systems,
processes and practices fitting together in a coherent whole. For example,
organisations may have talented personnel but may not manage to support them
correctly.
y

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• The key elements of a complete talent-management system will include an
employer brand, a recruitment and selection process, a training and development
process, a performance management system that is tied effectively to a reward
system and an information system that includes data on satisfaction, motivation,
talent development, talent utilisation and performance. There should also be
a process to assess an organisation’s competencies and capabilities (Thorne &
Pellant 2007: 3–4).
Where then does the process of talent management start? The first step is the
business strategy (see Figure 1). In determining a business strategy, it is important
to take cognisance of the existing talent within the company. The capabilities of
similar companies in the same industry also need to be identified in order for the
company to develop distinctive capabilities with a view to gaining the competitive
advantage. In the hotel industry, this could be customer service. The strategy will
indicate where the company will be heading, usually within the next five years.
With the strategy in place, the HR department, in conjunction with line managers
(normally within each discipline, namely, Marketing, Finance, Production, and
Research and Development), will identify the competencies needed to achieve the
company’s goals (talent demand). The written description of all the competencies
needed within the organisation is known as a competency model (Kochanski &
Ruse 1996: 23–24). Competencies are not static, however, and companies need to
continually develop new capabilities and competencies as the environment within
which they operate changes. Such capabilities have been referred to as ‘dynamic
capabilities’ (Wright, Dunford & Snell 2001: 712). Thus, organisations may
require new skills sets, necessitating the release of some existing employees and
the acquisition of new employees. Having identified the competencies required
at the different levels within the company, an audit can be done of the existing
competencies within the company. In a talent-management process, this will go
beyond the old style of skills inventory (educational qualifications, training, and
work duties and responsibilities) to become a competency inventory that catalogues
and enables easy access to what people can do and the results they can achieve,
for example, their skills and personal, functional, technical and other competencies
(DuBois, Rothwell, Stern & Kemp 2004: 64–67). Issues that will also be considered
at this stage will include the effective deployment and redeployment of employees as
well as external workforce demographics. The result obtained here will be known as
the talent supply. Comparing the results of the two processes will probably indicate
a talent gap. This will lead to the next step, namely the recruitment and selection of
talented new staff. In the talent-management process, extensive information needs

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to be available to execute the recruitment and selection process properly (DuBois et
al. 2004: 102–103). For example, in the case of filling an existing post, the company
must already have conducted an assessment of existing staff competencies and
placed the information in a competency inventory, which can then be used in the
layout of the advertisement. In the case of the selection process, key competencies
that are the biggest predictors of job success need to be identified and validated
by the managers seeking the applicants. It is important to note that instead of
having only one interview with the candidate, multiple interviews will be done.
This will ensure that the candidate actually possesses the competencies required.
Although time consuming and costly, it will be worth the effort if top performers
are ultimately selected. Once a candidate has been appointed, a training plan can be
written and executed. This will help employees to perform their current jobs more
effectively, prepare them for the next job on the career ladder, and prepare them for
a job in a different discipline (Paul 2005: 3). It is important to note that besides the
need for more training related to providing knowledge, building skills or improving
attitudes, the competency-based approach must also include issues such as changing
the motivation levels of employees and cultivating and developing personality traits
to produce exemplary performers (DuBois et al. 2004: 130–137). In this process,
a mentoring programme can play an important role. Measuring the employees’
performance is the next step. This will help to identify the strengths and weaknesses
within the organisation. To assist in this regard, it is important that competency
profiles containing clear descriptors are developed to enable employees to see what
is expected of them. In evaluating the softer skills, such as interpersonal skills,
use can be made of assessment/development centres as well as field assessments
– 360 ̊ appraisals (DeNisi & Griffin 2008). Using these techniques as a basis for
performance appraisal will help identify the development needs of individuals and
map out routes to career advancement and progression. This information could also
be used in the redeployment of employees, enabling the company to have a constant
supply of talent. This is vital, as the organisation must know where it has leverage
– which workforces and areas of business have the greatest strategic impact and are
critical in maintaining the distinctive capabilities of the company. Depending on
the outcome of the performance management process, a reward can be given to the
employee. By linking compensation directly to individual contributions that make
a difference to the company, an organisation can maintain the highest calibre of
workers. According to research undertaken in this area by Horton (2002: 510), the
following are the main reasons why employers use competency-based rewards:
• To motivate people and to encourage better performance
• To increase flexibility among the workforce