This report will consist of issues in the UK hospitality industry by analysing with the help of PEST analysis and internal environment analysis. The report also highlights causes and solutions of labour turnover in hospitality industry and some of important legislations are described in the end of report which might be helpful for an organisation to make an effective human resource strategy.
UK hospitality industry is a huge industry which employing direct 2.44 million persons as 5th largest employer sector of the UK. Its turnover is £90 billion worth as per 2010 (British Hospitality Association: Oxford Economics).
Manpower Planning: Manpower planning is also considered as human resource strategy. It describes that recruiting new and putting existing people on right place in right time and in right quantity considering goals and objectives of organisation.
"human resource planning is the systematic approach of meeting with the balance of required of people in the company with the internal and external supply of candidates with job openings for a certain period of time considering future time and positions." R. Wayne Mondy
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In hospitality sector, there are the requirements of experienced and well trained man power which is not easy to recruit. Labour can be supplied from two sources either internal source or external or both. Internal supplies can be considered like the transfer from one department to other department (i.e. from bar to front), it might be a promotion and on vacant position. External supplies of labours are done by new recruitment of employees. It depends on the requirement of the hotel that what types of employees are required, so recruitment can be done by human resource.
External Sources of Labour for hospitality industry:
Universities and Colleges: Education institutes are the main source to which provide man power to the organisation. In the UK, there are plenty of colleges and universities are providing degrees and diplomas in hospitality. In one place, organisation can get number of required candidates to recruit. The most beneficial fact of recruiting staff from college campus is to hire cheap labour. Inexperienced staff is hired on low wages comparing experienced employees.
Internship & Training: Institutes send students to the hotels for internship and practical trainings. It is the source of potential man power for hospitality industry. Once students complete their training, they start working with organisation.
Recruitment Agencies: There are plenty of recruitment agencies around the UK which offers job in hospitality industry. Most of the students apply through agencies, so they don't have to search a lot and even agencies can arrange a suitable job with matching their criteria and find right candidate for their clients. It also saves the cost of hotels for recruitment.
Online: In techno era, all hotels and restaurants are operating their own websites with a carrier option. Hotels publish vacancies on website regarding their requirement. Candidates can apply online and if organisation's requirements match with any of candidates experience and CV, they are called for further process. It saves cost and time for organisations and candidates as well.
Head-hunting: Many of the organisations believe in head hunting. Companies hire experienced personnel from other organisation by offering them more than existing.
PEST analysis of man-power supply for UK Hospitality Industry:
There are plenty of factors which can affect the supply of labour for the UK hospitality industry. It is necessary to analyse the environmental factors which are affecting or can affect the labour market for hospitality industry. These factors can be assessed by some of strategic methods i.e. SWOT analysis, PEST, Porter five forces analysis etc.
PEST analysis stands for the eternal environmental analysis of the organisation which cannot be controlled by a particular company and it affect whole industry. PEST is conducted to know about the available and potential opportunities and threats for the organisation.
Political: Political environment includes political factors such as laws and regulations, requirements, equality etc. which are affecting labour supply to the organisation.
As per the figure, In the UK, 17% employees in the hospitality industry are from overseas while more than 60% in London. If part-time employees are counted, figure will be increased. Now days VISA rules are made tuff (No work is allowed for students, HSMP are closed etc.) by UKBA which will affect labour supply to the hospitality industry. It is working like as a threat. Job preference is given to the local is also affecting to the skilled labour market to the hospitality industry.
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A selection procedure, equality and government rules regarding contract are affecting qualitative labour supply to the UK hospitality industry. There are also some requirements of certificates like food & hygiene and health & safety for employees which affect the flow of labour supply but provide qualified employees to the organisation.
Unemployment Benefits: this is also a strong reason which lures youth to not to work. UK government provides unemployment allowances to unemployed, which attracts people to take the benefits without working.
Economic: Economic factors like employment rate, monetary inflation, GDP and other factors which are affecting the economic environment are considered. In the UK, employment rate has been increased with .1% compare to the last year which will affect the labour supply indirectly to the hospitality. Growth in employment means number of persons looking for jobs will be decreased, so it can affect labour supply for hospitality.
Salary given in the hospitality industry is less than compare to other sectors like education, technology and management. As per the BHA and national statics, salary of a trainee manager in hotel will be £15000 to 18000 per annum while in IT sector it comes around £30000. So the intelligent candidates will change either field or job. Only less qualified and inexperienced labour are available in the market. A trend of giving TIP to the employees by guests can attract employees.
Social Factors: It includes the beliefs, culture and social trends of society. In the UK, level of education and number of education institutes is increasing. It prepares number of hotel professionals which is a good sign for hospitality industry that they can get skilled labour.
Hospitality industry comes under tourism industry and UK is a tourism destination. It means it requires people from various languages and culture to manage their business. It is difficult to find a person with multilingual and cultural abilities.
Safety and security reasons also stops people to work in hospitality industry like burning, accidents, slippery cases and fire. Night duty schedule also stop people to work in the hospitality industry.
According to HCIMA "This is most vulnerable industry in case of discrimination. It is often seen that minorities are affected by racial stereotyping, unsophisticated selection and promotional activities. It is also affecting man-power supply and stops qualitative minority employee to join organisation.
Technological: This environment is also affecting indirectly labour supply for the UK hospitality industry. Computer and internet technology which is assisting people to apply online for vacancies while sitting at home. It finds the employees for hotels but in-contra i.e. a candidate from London can apply for vacancies available in US. It is affecting UK's labour market.
It is affecting supply and quality of labour because of migration. Well qualified and experienced people are migrating.
Internal factors which are affecting UK hospitality organisations:
Low wages: In the hospitality sector, given wages to a labour is low compare to other industry. For i.e. a person who is working with McDonald gets £5.93 @ hour while he will get £7.08 working for Primark.
Accidents: So many accidents happen in industry like slippery, burring, fires and etc. which don't attract employees to work in hospitality industry.
Lack of chances of progress: All employees and departments don't get equal chances of progress. For example house-keeping and room service are not given equal importance.
Some other important factors affecting Hospitality Man-Power:
Labour Turnover: "The ratio of the number of employees that leave a company through attrition, dismissal or resignation during a period to the number of employees on payroll during the same period."
"UK hospitality sector is the most affected from labour turnover. It was noted in year 2009 that industry had 31% labour turnover as per nation report 2009 and have spent more than £400 million on recruiting and developing new staff." (national report 2009)
Labour turnover affects both company and employee. Employees need to learn new skills, search jobs, face interviews, while organisation has to open new recruitment, hire new personnel, spends money on training and it also disrupts production and service.
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Disruption: if employees quits from the job it will affect adversely the organisation. It will affect the service which is given by the organisation.
Cost and Time: Labour turnover will increase the cost of human resource because of recruitment arrangement and training and development of new employees.
Loss of skilled and experienced: It is a great loss for organisation that a trained and experienced employee of the company leaves or migrates from the job. It takes time to train new person.
Reason and Solutions of Labour Turnover:
It is compulsory to know about the reason that why people are leaving or switching job to other organisation before finding out solution. There may be plenty of reasons of increasing labour turnover.
Some of people are switching their job because of salaries; it is the important cause of switching jobs. To stop it company has to review the salary provided by competitors and if it possible and ethical to make ebullient to them, it should be done immediately.
Salary can't be the reason all the time, sometime employees migrates from the job because of carrier prospective. It is required for the company to know that what are better opportunities are offered by other organisation. Company should conduct appraisal for employees to review their performance for promotions and increment; it can make employees to stay longer within organisations.
Some of the employees leave the job because of transportation cost, accommodation and meal. If it is possible to provide it to employees on discounted price, or payment some of percentage by company can stop labour turnover.
Better facilities and opportunities: some organisation lures employees by offering them education, tuition fee, insurance, bonus, profit sharing and holiday pay. If organisation wants to compete in the market then it is necessary to hire skilled labour and it is only possible if they are offered good packages of facilities apart from salary.
Some other solutions to control labour turnover:
Communication: It is a need to communicate all the time to employees about their observation regarding service, staff shortage and make them involve in process.
Training and development: In the joining of new staff, it is necessary to provide them special training that what is expected from they and what they will be contributing to the organisation. A report says that 33% of hospitality organisations don't provide training. Give chance to the employees to improve themselves and assist them to develop their career if they want to learn and take responsibilities in the organisation.
Good Leadership: it focuses on following points:
Employees should be provided appropriate resources and equipment to complete a given task. Once employees are trained, give them opportunity to perform. Decide their target and let them achieve until and unless they don't go wrong or need help. It will motivate them to improve and they can their bright future within organisation.
It should be make sure that management listen to employees and consult with them. Their religion and beliefs should be respected by management and all employees. A good relationship should be maintained by discussing with them at different prospective of doing better.
Reward: Employees should be awarded on their achievements. A celebration of success motivates employees. "Be sure to recognise all departments, including back of house staff, e.g. housekeeping is often the most undervalued department, but is commonly the most profitable aspect of a hotel." Caroline Cooper http://www.zealcoaching.com/tag/how-to-reduce-labour-turnover/
Some Current Legislation regarding Human Resource in Hospitality Industry:
Recruitment and Selection: It is a process of hiring new employees for the organisation. There are some legal obligations which are necessary to follow for an organisation to meet with government requirements.
Discrimination: It is an offence to discriminate someone at working place, it may be related colour, age, sex and disability. For instance, if an employee or manager gives a racial comment to another employee because of colour, it will be considered as an offence and manager can take action against the employee.
Working Time Regulations: An adult can't be forced to work more than 48 hours without his wish.
Terms & Conditions of employment: it is an agreement between employee and employer upon they are agree. It is not necessary to be in written, it might be verbal but employee has right to take it in written. If any of condition changes, employee must be informed. i.e. if Employer cuts pay, employee may put objection.
Human Rights: Human Right Act 1998 provides so many rights to a person which can't be affected by someone. For example rights are a) right to live, b) freedom of expression c) the right of liberty, d) the right of education etc. These rights give power to the employee to express his views against unethical activities which are happening in the organisation.
Health and Safety of Employees: Employer has the responsibilities of the health and safety of all employees under act 1974. It is necessary to make work place safe. For example: work place should be proper ventilated and flow of fresh air. Make floor, walk-ways safe to move and work.
Code of Practices: Normally these information are given in the employee hand book. Disciplinary: It is necessary to inform employee formally or informally before taking a disciplinary action against an employee. A warning letter should be given to him. Payment has to be given to the employee. "Employee has the right to appeal against dismissal. If employee doesn't get right pay, he has the right to claim to an Employment Tribunal for unlawful deduction from wages. "
National Minimum Wage: This is the minimum wage which is decided by the UK Government and employer entitled to pay. These are followings:
An adult over 21: £5.93@ hour
£4.92- 18-20 year
£3.64- 16-17 year
£2.5 apprentice rate
There are so many other legislations (apart from mentioned above i.e. maternity leave, holidays, tax benefits etc.) which bind employer to follow and give some sort of rights to employee.
It can be concluded from the above report that hospitality industry needs to improve in many areas like given facilities to employees, payments, and flexibility to attract skilled labour. Legislations are made to follow but if these are taken in care as strength might be very useful for the organisation. Employees should be considered as internal customer of the organisation because hospitality industry is the business of people management.