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Impact of High Labour Turnover on the Hotel Industry

Aims and Key Questions

Industrial revolution brought with it a paradigm shift in the type of industries and increasing focus on service industry. Hospitality sector saw a great boost and a lot of action since the need for such services increased. Now with the spread of industrialisation and growth in the economies of developing nations; the focus is shifting more towards such nations. This paper attempts to examine the similarities and differences between the hospitality services in a developed and developing market. For this purpose two major hotels in India (a developing economy) and Great Britain (a developed economy) is examined. Further with growth of an economy in general and a sector in particular also attracts a lot of labour movement in the sector. This paper also examines the impact of labour turnover on the hotel industry.

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Theoretical Basis

Labour turnover is one of the biggest issues facing modern day industries. Hospitality industry is also affected by it. Managing employee turnover is one of the biggest tasks that a Human Resources Manager is faced with. It is felt by some that the task of recruitment has most important part in the whole human resource management process while arguably the task of employee retention is far more tough and at times needs a lot of study and innovation. When an employee leaves, this can have a variety of effects that not only impact on the organization, but also the individual employee and wider society (Mobley 1982: 15-31). Best Practice Forum’s Benchmark has a turnover index of 26.5% though some businesses can experience 50-100% turnover every year (almost exactly the same as the 26.7% international hotel labour turnover benchmark published by Horwath Consulting) (Catererserach.com).This paper tries to assess the impact of turnover on the hotel industry on a whole while comparing and contrasting the two markets i.e. India and Great Britain.

Research Methodology

This paper is based on the study of previous work in this sector and information available on online databases, books and websites of organisations. Two hotels each from India and Great Britain have been selected to study the labour turnover and the impact of labour turnover on the industry and service standards.

Methodology: This study relies on wide-scale data collection from the internet resources to understand the functioning of these hotels while also relying on the online journals and hardbound books to understand the management principles and its theoretical application. A exploratory research will be launched to ascertain the causes and issues behind employee issues. Also a socio-cultural perspective and its application will be analyzed. This implies that the research would be a qualitative research based on secondary research based on available online resources.

Research Plan

Though both the markets differ in the way they are composed; the service standards and expectations of the guests is almost at par since the hotels used in this study selected from India are renowned 5-star hotels which attract a lot of foreign tourists. The study of the markets and general traits can be used to extrapolate the overall scenario and developments. This also helps analyse the future outlook and opportunities in the sector.

The research would be completed as per following schedule:

Analysis Plan for the project Proposed Date
Database Construction and Collection of Data December 20’ 2008
Questionnaire Development December 24’ 2008
* Statistics and Data Analysis January 07’ 2008
* Results Presentation and Reports Preparation January 12’ 2008

To start with the employee turnover needs to be defined in quantifiable term. Here the most common method to do so is to add up all the staff who have left the organisation in the past 12 months and divide the sum by the total number of staff and multiply by result by 100. This gives the annual percentage of employee turnover. Seasonal contract workers are left out of this count on purpose and that is justifiable.

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The four hotels selected for study are The Taj Group of Hotels (India), The Oberoi Group of Hotels (India), The Beaufort (Great Britain) and Langshott Manor (Great Britain). The Indian hotels are large chains of high end 5-Star rated hotels and also own properties outside India. This provides them exposure on the way business is performed outside the nation. The British Hotels are one of the finest in their class and match service and class with the best in industry. The selection of hotels provides ample scope to draw conclusions based on the observations and previous studies in this sector. Hospitality industry in both the nations has a high growth potential. While the market in Britain has seen a growth plateau over the recent years; the growing economy in the Indian market has supported a high growth trajectory for the sector in India.

Taj Hotels Resorts and Palaces was established in the year 1903 and is one of Asia’s largest and best known hotel groups. It has about 60 hotels in 42 locations across India and owns or has stakes with an additional 17 international hotels in nations like the Maldives, Mauritius, Malaysia, Australia, UK, USA, Bhutan, Sri Lanka, Africa and the Middle East. Founded in the 1934; The Oberoi Group, either directly owns or manages 30 hotels and luxury cruisers in about five nations under the ‘Oberoi Hotels & Resorts’ and ‘Trident’ brands. Oberoi’s are also engaged in services like flight catering, airport restaurants, travel and tour services, car rentals and corporate air charters. The Beaufort Hotel is a luxury hotel offering complete range offerings like normal residential suites/rooms to business conference halls. Similarly the Langshott Manor is a craftfully restored manor house of the 16th century which is located in a secluded country lane and is encompassed by about three acres of breathtaking gardens and natural scenery. Interiors featuring exposed beams, elegant interiors, and surroundings this property has the combined attraction of the modern and oriental for the patrons.

The major manpower issues facing the market in both markets remain common though each is marked with its own specific nuances. The major issues that are characterised in both the markets remain: growing demand for wages by the workers, rising property (real estate) costs, high worker attrition. Some of the issues that are specific to the Indian market are: lack of skilled workforce, inadequate infrastructure support, insufficient marketing initiatives (lack of customer awareness). Issues that are specific to the British market are: widespread competition, pressure to minimise costs, pressure to innovate to maintain lead over competition.

Although the sector has significant common traits in both the markets; the differences stand out and need to be separately adhered to. The Indian market is struggling with lack of basic infrastructure (physical facilities) like lack of support by proper roads, electricity, potable water etc. At the same time it also lacks human resources on account to trained professionals. The booming economy also offers the workforce ample scope to switch jobs and hence the market is characterised by high employee turnover rates. The British market on the other hand is plagued by issues like managing costs on account of rising cost of inputs and at times lack of demand caused due to the seasonal cycle of the industry. The high turnover of employees is attributed to employee satisfaction and availability of opportunities in the sector.

Conclusion

The main problems that arise for both the nation’s hospitality industry with relation to this human resource issue are usually handled by playing with the wage structure and responsibility allocation. The quality of the service in all the four hotels is of top-most importance to the guests as well as the management of the organisations. To maintain this management needs a talented and trained pool of human resources. In retrospect the main point that is highlighted is the rising rate of attrition in the sector and simultaneously rising pressure of keeping costs low. This has led to cost cutting measures on other inputs and functions that encompass the industry and affects its standards.

Bibliography

  1. Mobley W. H. (1977). Intermediate linkages in the relationship between job satisfaction and employee turnover Journal of Applied Psychology 62: 238.
  2. Morrell K, Clarke J Loan and Wilkinson A. (2001) Unweaving Leaving: The Use of Models in the Management of Employee Turnover
  3. Oberoi Hotels and Resorts.
  4. The Langshott Manor.

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StudyCorgi. (2021, October 23). Impact of High Labour Turnover on the Hotel Industry. Retrieved from https://studycorgi.com/impact-of-high-labour-turnover-on-the-hotel-industry/

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StudyCorgi. (2021, October 23). Impact of High Labour Turnover on the Hotel Industry. https://studycorgi.com/impact-of-high-labour-turnover-on-the-hotel-industry/

Work Cited

"Impact of High Labour Turnover on the Hotel Industry." StudyCorgi, 23 Oct. 2021, studycorgi.com/impact-of-high-labour-turnover-on-the-hotel-industry/.

1. StudyCorgi. "Impact of High Labour Turnover on the Hotel Industry." October 23, 2021. https://studycorgi.com/impact-of-high-labour-turnover-on-the-hotel-industry/.


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StudyCorgi. "Impact of High Labour Turnover on the Hotel Industry." October 23, 2021. https://studycorgi.com/impact-of-high-labour-turnover-on-the-hotel-industry/.

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StudyCorgi. 2021. "Impact of High Labour Turnover on the Hotel Industry." October 23, 2021. https://studycorgi.com/impact-of-high-labour-turnover-on-the-hotel-industry/.

References

StudyCorgi. (2021) 'Impact of High Labour Turnover on the Hotel Industry'. 23 October.

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