Indian Hospitality in Transition: Challenges for HR
By Natwar Nagar
"The only constant is change, continuing change, inevitable change..." - Isaac Asimov
Hospitality India is no stranger to this maxim and now finds itself in the midst of yet another change as the hands of time whirl on. As the sector transits from a period widely accepted as the 'Golden Age of the Indian Hospitality Sector' to one that could well be known as that of the 'Golden Handshake'. The challenge for the Hotel Human Resource (HR) department in the year 2009 would, thus, be in keeping the employees motivated as well as informed about the fall out of the global meltdown, which could impinge on the work environment in terms of job security, reduced growth avenues, and compensation. It will not be easy for employees to rein in their needs and aspirations and changing their mindsets will be the next challenge for HR. The scenario requires precise and timely communication with employees apprising them of the situation.
The drastic shift in world economies has led to emotional upheavals and turmoil for the employees, which would need to be identified and appropriately managed. Most employees, having not witnessed an era of pink slips and pay cuts, would also need to be psychologically counselled to avoid feelings of failure, insecurity, rejection and restlessness. On a more positive note the supply-demand imbalance in the Indian Hospitality industry means that for the average and good employees, the market still remains strong in the medium to long term. Therefore, the numbers of hotels that are likely to come up are going to ensure that there will be job opportunities in the medium to long term. This is certainly a bright spot compared to other sectors that currently look bleak.
HVS predicts the current fiscal year to have relatively smaller growth in terms of real capital for employees. From a high of 15% in terms of year-on-year real compensation in the last three years, the industry now faces a 'ZERO year'. A few corporates are even planning on pay cuts for their senior management. With shrinking revenues and virtually non-existent profits/bonuses, the biggest dilemma is that of companies' inability in meeting variable compensations. This problem is more serious amongst the mid-level and senior management who face the prospect of a lifestyle transformation with the fear of defaulting on their commitments and over-stretched loans, the repayment of which had been largely apportioned to the profits. Individuals would have to rework their financials to be better prepared for the immediate future. Companies might also benefit in terms of building upon employee trust and loyalty by extending soft loans to employees or finding other measures that ensure the continuity of their basic needs/ commitments.
Leadership and Role Models
These difficult times would test the strength of the leadership, who would not only be responsible for managing the operations and improving the bottomlines but also providing emotional stability to their staff. The proverbial 'pat on the back' and 'sharing and bonding' with employees will make a come back as most managers believed that emotional bonding between employees had evaporated with 'scarcity of time'. The credibility and openness of the leader is very important for motivating employees in roughing the conditions till the next fair weather patch as dissatisfaction spreads faster when employees lack faith in the abilities of the leadership, which eventually leads to lower quality services.
Skills set comprising of experience, maturity, intransience, and ability to withstand pressure would become even more crucial. The younger workforce, too, would stand in good stead to imbibe these values and let arrogance give way to humility. Moreover, they should look at longer stints within companies where they can learn the trade rather than short career jumps across companies driven only by moneynomics.
Building New Talent
We believe that it would be the golden opportunity for companies to attract good talent and enhance their capabilities for the long run and the good times. Regional players, boutique operators and independent owners should stretch themselves to find and attract human talent across the spectrum. The timing is perfect to invest in human talent at a more realistic price. With hotel professionals from other industries - such as real estate, health care, aviation and retail - desiring to come back to hospitality, it maybe predicted that we are standing on the threshold of a reverse flow of hotel professionals from other sectors to hospitality. Some family run organisations and single owners who have ambitious plan to grow can attract top talent to their fold, both at the corporate and functional levels. Hotel professionals in India are very myopic in the view of their employment needs as they prefer to work with only established, large brands. Unlike, counterparts in the West who take calculated risks and are willing to explore work with small and unorganised players, Indian professionals are relatively averse to risk and try to play it safe. HVS Executive Search research shows that professionals who take the extra risk and are entrepreneurial in nature gained considerably more both in terms of job enhancement, satisfaction and growth in their careers. Small players/independent owners can provide a very attractive enriching career option that can be financially viable for professionals in providing a stable long-term career as both parties are well protected by tailor-made contracts and commitments.
Emergence of New Mid Market and Budget Hotels
Traditionally, Indian hotels have been a mix of Luxury, First-class and Mid Market properties that have been able to nurture the classical hospitality professionals. However, with the recession on and Corporate India giving way to moderation, HVS believes Budget hotels with quality without frills will dominate the market in the coming years. The slew of mid market and budget brands - such as Premier Inn, Ibis, Red Fox, Hometels, Fortune Select - have already captured the imagination with their value products. This would also breed a new hotel professional completely different in attitude and aptitude from the existing pool of Indian Hospitality professionals, who will have to acknowledge their presence and emergence.
Sales and Marketing
The function of Sales and Marketing would be under a lot of stress. Gone are the days where rooms were full due to the market dynamics and a feel-good factor of the Indian economy. Sales and marketing professionals have to 'reach out' and connect every day with their potential targets and audiences. New strategies and innovative pricing along with a demanding customer shall be the call of the day. Virtues and skills such as experience, humility, energy and enthusiasm that had disappeared from the Sales vocabulary in the last three years have to be demonstrated by all the sales professionals. Suddenly the Role of E-marketing, revenue management, and channel partners will increase and become robust as the second line of sales will flow through these measures.
The role of the General Manager in the coming year would be the toughest as s/he would face a new reality of shrinking revenues, demanding market, a greedy customer and low morale of employees. General Managers will have to lead their teams directly from the front by connecting with their customers. They will have to be bold, aggressive, risk takers and willing to share their dream everyday with their team. Moreover, General Managers need to build in their team members a positive atmosphere and firm belief in a better and not-so-distant future. Recognition, reward and reprimand to the employees have to be quick, controlled and managed effectively on a day-to-day basis. S/he needs to be dynamic to meet the new challenges each day, along with being a visionary. The prior focus on rooms would have to be widened to encompass Food & Beverages (F&B) as that is where the future revenues would be coming from.
To summarise, the hospitality sector in India is fundamentally
strong and well placed for further growth and consolidation across
all levels of the market. Human resources along with key
stakeholders will play a crucial role in managing and balancing the
hopes and despairs of their employees as the sector makes a
transition in the fallout of the global meltdown. However, it
is at times such as these that the light at the end of the tunnel
shines more brightly and through it signals the industry to
innovate and advance. We, at HVS Executive Search, would continue
to highlight key issues and share our experiences and feedback from
the employees, industry leaders and captains of the industry. Being
an optimist, I would like to end by sharing that our industry would
open 50 new hotels in the financial year 2009 and shall provide
direct employment to more than 10,000 people during the time of
22 May 2009