HRM's Strategic Role and Challenges in the Global Hotel Industry

This report provides a comprehensive analysis of Human Resource Management (HRM) within the hotel industry. It begins by highlighting the evolution of HRM from a procedural function to a strategic one, particularly in the context of the globalized hotel sector. The report examines the key functions of HR departments, including recruitment, training, and compensation, and identifies the major challenges facing the industry, such as labor shortages, low wages, long working hours, and employee dissatisfaction. It explores the roles of HR in recruitment, retention, compensation, liability, and labor relations, offering solutions like skilled recruitment, employee incentive programs, and adherence to labor laws. The report emphasizes the importance of HR as a bridge between employees and employers, fostering ethical practices and integrating HR into line managerial functions to address challenges and improve overall performance. Reference is made to the challenges of the hotel industry as well as the evolution of the field of HRM.

RUNNING HEAD: HRM
Critical Analysis of Role of HR in Hotel Industry
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Introduction:
Over the years, there have been significant changes in the field of Human Resources
Management (HRM). In the past, HRM was considered to be a trivial policing function focusing
on the custodianship of procedures and policies, but now it has evolved into being significantly
involved in the strategic policing and directions that the organisations undertake. Tourism sector
has also seen its fare share of HRM evolvement. Globally speaking, a continuous growth spurt in
the technological and managerial know how, as well as immense progress in the fields of
communications and integration of political, economical and social structure has seen a
significant rise globalisation of Hotel organisation. Newer challenges with respect to tackling
organisational issues related to human resources have crept up as an after effect. It has become
increasingly significant for global organisations to understand and incorporate the importance of
human resources management. But, it has been past views that catering and hotel business have
always put employment practices and welfare on the backseat, that is they have a poor way of
tacking employee related issues and workplace dissatisfaction (Nohria, Groysberg, & Lee,
2017). Extensive studies done on these businesses have supported the above claims. Specifically
the issues of low wage structure, unstable and long working hours, career structures that were
underdeveloped and hence poorly formed and in some cases even nonexistent, non-structured or
very poorly formed formal hiring practices and recruitment methods, and lastly lack of practice
in human resources and as a result a low employee turnover. The objective of this article is to
search for the level of importance attached with Human Resources Management, and in turn find
effective and practical solutions to the employee issues and hiring practices dogging the global
Hotel business sector.

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Discussion:
Duties of HR:
Hiring practices, administration of benefits and employee training are the three most important
functions of the human resources department. Labour laws and advising employees and
managers are two of main sections where a human resources director is supposed to have
expertise in. The highest challenge that the human resource department faces is interacting with
other departments of the hotel business. Human resource department deals with the hiring
process up to a certain extent, namely in recruiting, interviewing and screening applicants, but
the decision to hire the employee in a certain department, rests in the hand of that department.
Similar kind of relation holds true for disciplinary actions and promotion. In most cases though
the action of human resources department is limited to acting on legal questions and advising and
acting in legal scenarios. The effectiveness of the human resources department lies in the hand of
its manager, specifically the kind of relation he or she is able to have with managers and advisors
of other departments.
The Hotel Industry:
The most important problems, affecting the hotel industry are employee related. International
Society of Hotel Consultants has cited issues related to shortage of skilled labour as one of the
challenge present in the top tier of the challenge ladder. In the report “Top Ten Issues in the
Hotel Industry for 2007” published by ISHC have established that more and more people are

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leaving the hotel workforce rather than entering it, and thereby crippling the hotel industry,
leaving them shorthanded. Substandard wages have been identified as the topmost reason for
deterring potential employees from entering the hotel workforce. Long working hours, as well as
working of on nights and weekends, deters recent college graduates, specifically the young
generation, who longs for flexible working hours and quality work, thereby crippling the hotel
workforce. Another point to be noted is that employee dissatisfaction and lack of proper training
is increasingly hurting the hotel business day by day.
Roles of HR in the industry:
Recruiting:
Gap in skill set and a massive shortage of workforce are problems that HR deals with
universally, but it would be wrong to assume that these problems can be dealt by HR alone.
Skilled recruitment officials are needed to smooth the hiring process as well as to hire quality
housekeepers, bartenders and wait staff. According to ISHC, recruiters can hire workers under
H-2B visa program in order to help correct for the shortage in worker supply. Another function
of HR is to make routine checks on the background of hired as well as potential employees. This
practice helps in reducing the rate of theft of food items, expensive wines and other industrial
equipments. These have been described in many articles published in various journals over the
years. Philip Lye, director of Biz Momentum Pty Ltd describes lack of properly documented job
description is another reason behind these effects, and this is a serious problem plaguing the
hotel and catering businesses. This is a issue that HR can solve, they can make proper job

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descriptions and ensure that the hired as well as the potential employees are properly made aware
of the correct job description, that is make their roles and responsibilities crystal clear to them.
Retention:
Based on statistics from U.S. Bureau of Labour Statistics, it is expected that hospitality industry
will see an increment of approximately 17% in the year 2014. This is above the average growth
rate for all industries combined, which is around 14%. But the issue of high turnover remains a
massive problem for hospitality industry. HR can provide incentives for employee retention, for
example provide discounts on goods and services provided by the vendors, or start and
implement employee retention programs (Huselid, & Minbaeva, 2018).. Recommendation from
ISHC is to start in house development programs run by professionals, which can present career
in hospitality industry as viable job options. This will further help recruiters to present before the
old and young of the industry, how the people have achieved success in the industry and have
advanced over the ages.
Compensation:
A labour centred industry like the hospitality industry needs to have proper wage and salary
structure based on the regional markets; this is a role where HR flourishes. Tips, given based on
the good service the employee gives, is one of the major source of income. Knowledge of payroll
as well as the federal tax code is required in order to properly handle earnings through tips; this
is where HR comes into action to help the employees. Studies done by ISHC have concluded that
productivity and morale has risen whenever cash bonuses were offered in labour intensive
industries like hospitality.

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Liability:
Businesses need to abide by and understand the federal and state employment laws. HR is able to
make sure that industries follow those laws by the book (Kahn, 2019). . Employers who don’t
abide by these laws face penalties in the form of fines or lawsuits. Also it is very important to
strictly follow safety codes since these are public places having hazardous working
conditions.HR can make sure that businesses follow Occupational Safety and Health
Administration guidelines. HR can deal with misconduct claims that are they can investigate the
claims and recommend appropriate action or dismissal as required. HR is the one who can deal
with workplace discrimination and harassment, they can help managers and workers understand
their obligations and rights under the law formed by 1994 Civil Rights Act.
Labour:
HR can oversee whether the employers are in accordance with National Labour Relations Act.
Hospitality workers often join unions and are interested in taking part in the union activities, this
act oversee that employers are allowing the workers to do just that or not. HR forms a sort of
bridge between union leaders and the industry leaders, often working to correct issues in over
pay, working hours and benefits.
Conclusion:
There are ample evidence to support the fact that HR acts as a bridge between employees and
employers. Evidence also points to the fact that HR actively helps employees to take part in hotel
activities. Employees are treated morally and ethically, HR induces this very fact in the

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managerial system of the industry. UK based research have found that there is vital integration of
HR into line managerial works, which goes against the popular notion that HR has no role or
assistance in line managerial roles. Although it has been known that line managerial jobs deal
with decision making, it has been revealed that line managers actually lack skills and
proficiency. It has been noted that unskilled and inefficient line managers are unable to face HR
issues which can critically damage the whole process.

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Reference List:
Huselid, M., & Minbaeva, D. (2018). Big data and human resource management. Sage handbook
of human resource management.
Kahn, W. A. (2019). Psychological condition of personal engagement and disengagemnt at
work62(5), 1471-1497.
Nohria, N, Groysberg, B & Lee, L (2017) Employee Motivation: A Powerful New Model