Oxford Economics for the World Travel & Tourism Council
I found this article by coincidence and it was quite fortunate as I was thinking about different ways I could develop in future, different specializations and finally about the outlook for young professionals in hospitality industry. This article not only answered my questions but also opened my eyes how big and important is travel and tourism sector.
So, let’s start with some interesting facts!!
- Travel and Tourism will contribute $11 trillion and support 347 millions jobs around the world.
- The growth rate in employment is expected to be 4% per year.
The biggest issue the report rises is that without the right policies in place now, some countries are likely to have large gaps that will make it difficult, if not impossible, for them to fulfill their growth potential. This makes it a real issue as hospitality is people industry. As a result, the industry will experience shortfall of 14 million jobs (equivalent of population of Cambodia) and reduces the contribution to global GDP by 5.8% ($610 billions). Besides shortage future shortage of people, hospitality already experience higher turnover than other industries. To address this issue, hotels should implement and promote proactive and careful talent supply management policies.
But this is problem is not only hotels who are responsible for. Very often in countries where tourism accounts for big part of GDP, countries should help educate their citizens as talent is key enabler for:
- Economic development
- Facilitator of growth
- Source of competitiveness
However, in countries where it is especially important, governments don’t prioritize it over other resources. As a result we have many tourism locations which are famous for its cheap labor especially in manufacturing but on the other hand it also hurts other industries like our hospitality.
As stated above, labor and skills called here talent are crucial component in the tourism supply chain. Let’s think of possible impact of talent imbalances and deficiencies.
- Many hard to fill vacancies lead to below-potential employment levels in short term and foregone investment and growth in long term
- Talent vacancies might be only met by significantly increases the pay levels what will increase costs and as result decrease profits
- Talent gaps between existing employees and untrained ones will lead to inferior quality of customer service.
- High turnover not only lead to higher costs and lover standards but also increased workload of existing staff what can pushed them to leave their jobs.
The good thing is that travel industry is characterized wit lower skills barrier to enter, enabling people with little experience or qualifications work. However, this also decreases the perceived career attractiveness and pathways.
They are basically three areas that shortages are particularly harmful and difficult to address.
- Shortage of particular occupation e.g. Chefs, pilots
- Shortage of job – specific skills e.g. Foreign languages, IT
- Shortage of particular soft skills e.g. customer service, problem solving
The reasons behind talent gaps and deficiencies:
- Career attractiveness and pathways. The seasonal nature of demand makes in many location also seasonal employment. The far and remote geographically locations, makes hotels nice place to rest but worse to live. In some countries cultural and social issues make it less attractive. Low barriers to enter have a drawback as perception of tourism as industry for low skilled, low paid jobs. Those lack of career potentials, unsociable working hours and low earnings makes it poor recruitment sector
- Competition. Tourism has to face demand from other high developing segments which offer higher salaries.
- Retention. Annual staff turnover can vary from 36% to 3% depending on the sector. Recruitment in those positions is an on going process. Jobs roles in elementary occupations, sales and customer services and those with skilled trades have highest turnover.
- Noncompetitive pay. Very often applicants tend to want higher levels of pay than can be offered.
- Education supply. In many countries, there is lack of access to specific industry knowledge. There is lack of educated teachers that can provide up-to-date and accurate practical knowledge.
- Structural characteristics. Some occupancies are heavily gender biased.
- Travel and Tourism sector training. Still many companies treat employee as cost rather than investment and as a result don’t pro-actively encourage their staff to increase their competences by training.
- Government policy and engagement. Besides the fact that countries tend to invest much more money on infrastructure than talent, the other problem is that in many remote countries staff needs to be speak English at communicative level what is not supported by educational courses organized by particular governments. The need for foreign language education is marginalized.
So, how can companies cope with this shortage? What should be their strategy to address this lack of talent supply?
- People. Providing additional training and development to existing staff. Trying new recruitment practices and means. Refining requirements for certain position to accept candidate without required skills but with big potential. Increasing salary and design clear carreer path for development.
- Talent. Adapting talent sources. Recutting candidates outside of the region. Partnering with educational institutions.
- Work models. Increasing the focus of improving talent pipeline. Redesigning work procedures. Providing more flexible work arrangements as providing virtual work options.
For me very interesting was table presented below, where the balance between demand and supply is presented. I wasn’t very surprised to see my homeland at the bottom of the page, as even I am an example of creating such a negative balance. But let’s face the truth. You have a very good high free education but you give no perspective afterwards. You can’t offer young professional 700£ salary for Revenue Manager position at 400rooms 5* hotel. But not only you are offered (let’s be honest) shitty salary but also you should be grateful everyday that you have this job. My theory also supports this table, where Poland has lowest surplus out of all 46 countries for professionals with University level. This also makes me sad.
In the end of the day, I wish travel and tourism industry much luck, good future and please don’t become like Poland.
Author: Mateusz Konopelski