The Role of Human Resource Management in Customer Retention

This report investigates the critical role of Human Resource Management (HRM) in customer retention, focusing on a case study of Holiday Inn Hotel in London. The research delves into the concept and significance of customer retention for organizations, identifying specific practices employed by Holiday Inn to improve customer loyalty. It examines the direct impact of HRM on acquiring and maintaining customers, including demonstrating personalized customer service and maintaining consistent communication. The report also explores the relationship between HRM strategies and customer retention rates within the hotel industry, providing a comprehensive analysis of how employee training, service quality, and customer feedback mechanisms contribute to long-term customer relationships. The methodology involves a quantitative research approach to gather measurable data, underpinned by a positivism research philosophy to ensure quantifiable observations and reliable outcomes.

Research Project

Contents
INTRODUCTION...............................................................................................................................3
LITERATURE REVIEW...................................................................................................................4
RESEARCH METHODOLOGY.......................................................................................................7
DATA ANALYSIS & FINDINGS......................................................................................................9
RECOMMENDATION.....................................................................................................................20
CONCLUSION..................................................................................................................................21
REFERENCES..................................................................................................................................22

Title: To examine the role of human resource management in customer's retention” -
Holiday Inn Hotel, London.
INTRODUCTION
Human resource management is considered as a crucial activity that is based on
recruiting, managing, training people with the aim of attaining all the set goals and objectives
in stipulated time frame. As human resource plays a significant role in business organization
as they contribute in attaining higher success. This is the reason that proper management of
human resource is essential as it contributes in improving performance level of company and
its workers as well. In this HR manager also focus on managing employees’ activities at
working area by proving them better guidance so that they can easily perform their task and
activities as well (Cascio, 2014). In addition of this, HR manager also responsible for
preparing HR practices to invite skilled and talented workers who are able to effectively
perform their task and at the same time also handle customers activities. This can be
beneficial in improving customers satisfaction and also retain them for longer period of time.
With the assistance of this, company can capture larger marker share from its competitors.
Current research is based on Holiday Inn, is one of the famous hospitality industry subsidiary
of Inter-Continental Hotel group that operate their business in over the world with the aim of
generating larger profitability level. It was established in 1952 to serve their hospitality
services to large number of customers in order to attain their satisfaction level. The main
focus of this company is to retain their customers so that they can establish their positive
brand image. For attaining the same, management of human resource is crucial that support in
handling customers and provide them better satisfaction.
Research aim:
“To examine the role of human resource management in customer's retention” – A
Case on Holiday Inn Hotel, London.
Research objectives:
 To study the concept and importance of customer retention for an organisation.
 To identify the practices used by Holiday Inn Hotel for improving the customer
retention.
 To examine the role of Holiday Inn Human Resource Management in acquiring
customer's retention.

 To study the relationship between Human Resource Management and customer's
retention in Holiday Inn.
Research Questions:
 What do you understand from the concept and importance of customer retention for
an organisation?
 What are the practices used by Holiday Inn Hotel for improving the customer
retention?
 What is the role of Holiday Inn Human Resource Management in acquiring
customer's retention?
 What is the relationship between Human Resource Management and customer's
retention in Holiday Inn?
Rationale of research
Every research project provides vast and detailed information that assist investigator
in improving the possibilities of attaining positive and reliable outcomes. In context of this,
the primary reason behind selecting as well as undertaking this research is to effectively
evaluate the role of human resource management in improving customers retention (Papa and
et. al., 2018). As it helps in determining the actual analysis that support company in inviting
large number of customers. Along with this, current study is also support researcher in
improving their skills and knowledge about specified topic and area. This will directly
contribute in attaining positive and authentic results at the end of the investigation that
support in making overall research more successful and reliable in nature.
LITERATURE REVIEW
Concept and importance of customer retention for an organisation
The identity of one of the best customers is that they purchase company’s products
over and over again. According to the viewpoint of Al-Refaie, (2015), Customer retention is
said to be a process when consumers for a specific period of time purchase products and
goods an organisation. It helps a company in developing an appropriate relationship with its
customers. The best way to retain customers is to provide with the stuffs they expected. Most
of the companies prefer to keep their customer retain for a longer period of time because
attracting new customers can charge them high at cost i.e. five times more than the existing
consumers. Moreover, customer retention increases profits by around 25% to 95%.

Therefore, to understand this better some points on importance of customer retention is
mentioned below:
Save Money: Companies’ prior motive is always to minimise expenses and maximize
profits. Thus, customer retention is the significant way for doing the same because keeping
old customers is better than to go for new customers as old customers are familiar with the
products and services. Apart from this, with the help of word-of-mouth company can
advertise their services in a cost-effective manner. A valued customer, always trusts on the
facilities provided by their preferred company and always gives loyal feedbacks. therefore,
with the help of this organisation can check in what they are going well and what are their
flaws and need to work on.
Maximum Profits: In order to attain maximum profits than it is important that
company fulfil all the need and wants of customers. Moreover, corporation can provide
offers, discount coupons etc., it will not only attract more and more customers but increase
their market share as well. As old customers knows the value of the brand therefore, they
become less price-conscious and willing pay whatever price a commodity is asking.
Practices used by Holiday Inn for improving customer retention
With the establishment of company, they focus on building a long-term relationship
with its customers. As this is a hospitality industry so, expectations of guests are relatively
higher than others and there can be many reasons behind this Zhang and et. al., (2015), opines
in the study that, with the change in course of time, technology is playing a crucial role in
making its customers aware about the services and facilities they are providing. Therefore,
delivering on the basis of customer’s expectation can increasingly profitable. In relation to
this, Holiday Inn can use some of the practices and these are mentioned below for better
understanding.
Identify priority guests: Unlike new customers company should also prioritize past
guests. Although criteria used for new guests won’t be applied in identifying old customers.
So, for this company can lookout for pass bookings that has previous records. Moreover,
organisation can use models such as monetary value, recency and frequency to categorise and
identify who are their prior customers. Therefore, once guests are prioritized than managers
can look for strategies through which guests can be attracted.

Provides Offers: Everyone loves to get rewarded and giving offers is the best
practice for improving customer retention. This will help in attracting customers and for
companies it will build good customer engagement. In relation to this, corporation can
provide discount offers for their hotel stays or in food and beverages. Furthermore, loyalty
programme for their regular customers can motivate them to come back to hotel more often.
Guest’s Feedback for future stay: This practice is not the only way to enhance
services and offerings but also act as a motivational tool for providing future experiences.
Having guest’s feedbacks is kind of give company with an overview about the facilities they
provided. Whether it was good or bad and if not appropriate than what measures can be taken
to improve and make their stay special.
Role of Holiday Inn’s Human Resource Management in acquiring customer’s retention
According to the viewpoint of Sparrow and Makram, (2015), in a business, whether it
is a corporate company or a hotel industry Human Resource Management plays a crucial role
because they look out for most of the activities like, taking customer’s feedbacks, make them
aware about new offers, considering the preference of customers etc., Therefore, in relation
with customer retention Human resource management can contemplate some of the points.
Demonstrate personalised customer services: Hotel industry is known for its
services and facilities provided and for them guests are like their God. Thus, whenever guests
arrive whatever company is serving should be according to the specific needs and wants. This
should like good old-fashioned customer services for instance: if anything goes wrong that
human resource management should handle the situation in helpful and empathetical manner.
However, this can reverse the potential damage and might increase the interest of customers
to return to the hotel for another visit. Apart from this, Human Resource Management, should
focus on the quality of room that are provided to its customers for both business and leisure
travellers. Reason behind is that an individual is spending money to have a pleasant stay and
if this only is not fulfilled than it can have a bad impression.
Keep the conversation going: For guest who are in priority list, Human Resource
Management can send personalised thank-you note. Along with this, they can request guests
to write positive feedbacks and reviews in their websites so as to demonstrate social trusts.
Even after some weeks or months, company should be kept in touch and conversation must
go on, through emails, telephonic conversation, social media sites and websites corporation
can provide information and offers they can avail for when they will visit for the next time.

Relationship between Human Resource Management and customer’s retention in
Holiday Inn
Over the past few years, Human Resource Management has come up as an important
department for resolving problems and doing other activities as well. Generally, they work
related to the issues such as organisational development, hiring, benefits, wellness, providing
better services etc., Therefore, in order to do the same, they make effective strategies and
follow directions to fulfil goals and objectives.
Customer retention, for any company is very important because they are the one who
can provide corporation with benefits. In a hospitality industry, if poor quality services in
housekeeping is provided than it can put a bad impact on the entire hotel. So, here it becomes
a crucial role of HRM department to hire candidates who are good in the same because
trained employees can win the loyalty of customers with their services (Rahimi and Kozak,
2017). While talking about the relationship between Human Resource Management and
customer retention; hotel industry is what they present to their customers. Services and
facilities, for which they are known for. If Human Resource Management provides effective
training to its employees than they can be able to interact with guests in an appropriate
manner by considering all the needs and wants. Moreover, it can help company in retaining
its customers for a longer period of time. Guests may feel like coming to the same hotel again
and again.
Therefor, Human resource management is determined as a backbone of a company
that look out for all the services and ways by which efficiency of industry can be enhanced.
RESEARCH METHODOLOGY
It is referring to the process that used by investigator to undertake research activities
in a systematic manner. This is the reason that it is one of the important sections through
which researcher can easily take right decision and at the same time also draw a valid
conclusion at the end of the investigation (Wallace and et. al., 2014). It includes various
method and techniques that help in gathering reliable and authenticate data towards specified
topic and area.
Types of investigation: While undertaking research there are different type of method such as
qualitative and quantitative method of study. In this, researcher is responsible for selecting
the best suitable one so that they can easily make a valid investigation. For undertaking

current research, investigator will be applied quantitative research method as it is beneficia in
collecting measurable information that effective in taking any kind of judgement within the
study.
Research philosophy: It is based on belief in which data should be gather, analysis and
evaluated as well. This will support in providing a way to investigate about specified topic
and area as well. It divided into two philosophy i.e. positivism and interpretivism. Under this
research, investigator would be applying positivism research approach as it provide
quantifiable observation that is measurable in nature (Jackson, Schuler and Jiang, 2014). With
the assistance of this, researcher get trustworthy information that put positive impact over the
end outcomes of the study.
Research approach: At the time of undertaking investigation activities, it provides an
effective framework in which each and every task of investigation is undertaken as it helps
researcher to draw a valid conclusion. In this context, there are two type of approaches such
as inductive and deductive. Both are crucial for evaluating as well as analysing information
on the basis of selected research area. For undertaking current research, investigator will
apply deductive research approach because it provides the way in which data is collected in
nature of statistical aspect that is easy for measure. By this, researcher can improve the
possibilities drawing a reliable judgement that contributes in attaining positive outcomes.
Data collection: It is important for researcher to select right and best suitable method of data
collection at the time of undertaking research as it helps them in gathering valid information
in order to make a study more successful. In this regard, there are two type of data collection
method such as primary and secondary. Both are appropriate for investigator collect detailed
in measurable content. In this primary method provide fresh and first hand data that is
directly collected through selected respondents (Al-Emadi, Schwabenland and Wei, 2015). It
includes various sources such as survey, questionnaire, interview, observation and many
more. On the other side, secondary method is also effective and it help in providing detailed
and in-depth information from the different published sources like books, journals, articles,
published magazines, newspaper and many more. For undertaking this research, research will
apply both methods in which primary method help in preparing a questionnaire that consist
various close-ended questions and secondary method of data collection assist in undertaking
literature review. With the help of this researcher can easily attain positive and authentic
outcomes.

Research sampling: It is based on an effective procedure that can be used by researcher to
select sample size from the huge population. It can be classified on the basis of two
techniques such as probabilistic and non-probabilistic (Lu and et. al., 2015). For carried out
current research, probabilistic sampling method would be applied in which respondents are
selected as per random basis and also get equal opportunities to be selected for providing
their views and opinion to investigator as per research topic. By using this method, researcher
select 20 respondents who are the employees and customers of the company and also have
proper information about research topic. This will aid in taking valid and reliable decision
within the study.
DATA ANALYSIS & FINDINGS
Questionnaire
Q1) Dou you aware about the human resource management?
a) Yes
b) No
Q2) Does human resource management help in retaining customers within the
company?
a) Yes
b) No
Q3) Is effective planning of human resource is beneficial for company in improving
positive brand image?
a) Yes
b) No
Q4) What kind of HR practices used by Holiday Inn for enhancing the customers
retention within the company?
a) Provide discount coupons
b) Understand customers queries
c) Ask for opinion/ feedbacks
Q5) What is the role of human resource management in improving the customers
base within the business organization?
a) Give proper attention to customers
b) Improve quality services
c) Building positive and healthy relation with customers
Q6) What is the challenges faced by Holiday Inn at the time of providing satisfaction

to its customers?
a) Inappropriate quality services
b) Lack of management in staff members
c) Frequent change in customers demand
Q7) What are the ways by which Holiday Inn can easily retain and satisfy customers?
a) Provide quality standards
b) Proper management of people
c) Understanding the customers
Q8) Is customers retention is help Holiday Inn Capturing and establishing
competitive image?
a) Yes
b) No
Q9) Does human resource management and customers retention within the company
is interrelated with each other’s?
a) Yes
b) No
Q10) Recommended the ways by which Holiday Inn can retain the customers for
longer period of time.
Data sheet
Q1) Dou you aware about the human resource management? Frequency
a) Yes 15
b) No 5
Q2) Does human resource management help in retaining
customers within the company?
Frequency
a) Yes 17
b) No 3
Q3) Is effective planning of human resource is beneficial for
company in improving positive brand image?
Frequency
a) Yes 18
b) No 2
Q4) What kind of HR practices used by Holiday Inn for
enhancing the customers retention within the company?
Frequency
a) Provide discount coupons 10

b) Understand customers queries 7
c) Ask for opinion/ feedbacks 3
Q5) What is the role of human resource management in
improving the customers base within the business organization?
Frequency
a) Give proper attention to customers 8
b) Improve quality services 6
c) Building positive and healthy relation with customers 6
Q6) What is the challenges faced by Holiday Inn at the time of
providing satisfaction to its customers?
Frequency
a) Inappropriate quality services 9
b) Lack of management in staff members 7
c) Frequent change in customers demand 4
Q7) What are the ways by which Holiday Inn can easily retain
and satisfy customers?
Frequency
a) Provide quality standards 7
b) Proper management of people 7
c) Understanding the customers 6
Q8) Is customers retention is help Holiday Inn Capturing and
establishing competitive image?
Frequency
a) Yes 17
b) No 3
Q9) Does human resource management and customers retention
within the company is interrelated with each other’s?
Frequency
a) Yes 14
b) No 6
Theme 1: Awareness about human resource management.
Q1) Dou you aware about the human resource management? Frequency
a) Yes 15
b) No 5

15
5
a) Yes b) No
Interpretation: From the above-mentioned graph it has been evaluated that human resource
management play a crucial role in business organization as it helps in managing workers at
working area with the aim of improving their productivity. As overall success of company is
highly depending over its workers. In context of this, 15 out of 20 people are aware about the
HRM and its effectiveness for company. On the other side, rest of 5 participants are not
familiar with this theme.
Theme 2: Human resource management help in retaining customers within the business
organization.
Q2) Does human resource management help in retaining
customers within the company?
Frequency
a) Yes 17
b) No 3