The ticking time bomb: Experts talk about the prevailing shortage of skilled manpower in the hospitality industry
While the immediate solution is to bring the salaries in the industry at par with the rest of the service sectors, most hoteliers focus only on training and motivation programmes
The Indian hospitality industry hasn't had it easy in a while. The issues they grapple with are several. While every expert in the industry talks about prohibitive GST rates, arbitrary government policies on land parcel purchases and expensive credit options, there is one critical issue that is understated and underreported.
That of skilled manpower shortages, which the hospitality industry is facing. P. Srinivas Subbarao of the Indian Institute of Management, Ahmedabad, in his extensive report, Issues and Constraints in Manpower Supply in the Indian Hospitality Industry, has warned, “In India, the shortage of skilled manpower poses a major threat to the overall development of tourism. In particular, the rapid expansion of hotels of an international standard in India is creating a high level of demand for skilled and trained human resources, which will ensure the delivery of efficient, high-quality service. High standards of service are particularly important in sustaining long-term growth.”
The hospitality industry employs one out of 10 individuals in India. Ajay Bakaya, managing director, Sarovar Hotels & Resorts, says, “With expanding businesses and industries, more people are travelling frequently, which is resulting in more demand for hotels even in the most remote locations. Hospitality companies are expanding, leading to more demand for manpower. Indian hospitality is still people-oriented and manpower costs are affordable when compared to other countries.”
Clearly, given its economic heft and its contribution to India’s job market, the hospitality industry needs whatever help it can get to create a network of skilled professionals to grow faster. A few hospitality experts weigh in and offer some well thought out solutions for the manpower crisis.
The manpower crisis: The reasons
With hotels expanding at 20 to 25 per cent per year, the shortage of skilled manpower is felt not just at the upper rungs, which are more difficult to fill, but even at the lower ones. The dearth of skilled manpower is exacerbated by the outdated training programmes in the various institutes, which are in the need of a desperate upgrade. Most hotel groups, which are considered at top of their game, conduct extensive in-house training programme.
Even if hotels manage to snag highly skilled people, or groom them over the years, the fear of losing the best to competition hangs like a sword of Damocles on their heads. The availability of skilled and trained manpower is a challenge in long-term development and sustainability due to the high level of competition and increasing pay scales. Here are some views:
Gurmeet Singh, Senior Area Director (HR) – South Asia, Marriott International: India is witnessing remarkable growth, with global and domestic players on an expansion spree. It is no more an employer’s market where we had the option of choosing skilled manpower. It is more of an employee-driven market where skilled manpower can go window shopping for jobs in retail, aviation and real estate sectors. There are concerns over whether there will be enough skilled people to meet the demand of this labour-intensive sector, which is already facing a shortage of trained staff. The reality of the hotel industry is rather unpleasant, and with the growing expectation of the Gen-Y, the gap is widening. The long working hours, 24/7 operation and very little selftime are some of the truths of the hotel industry.
Prashanth Rao Aroor, CEO, IntelliStay Hotels: Jobs and candidates exist but the matches are not easy, and it has a lot to do with the mindset and attitude. The current generation could be less career-oriented and more carpe diem. They have a different view on careers and are not prepared to do the time required. Many emerging sectors also aggressively hire hospitality talent, besides education in the sector has not kept up with the times.
Satyen Jain, Director, The Pride Hotels: The management colleges and the industry have failed to build an inventory of well-trained people and have relied on poaching talent by offering higher salaries. Most industries today are opting for professionals who have empathy towards guests. They lure hospitality professionals who are trained in guest relations, with attractive pay packages and perks. Peer pressure caused by constant comparison with the pay packets earned by erstwhile colleagues, who have shifted industries, and the inability to strike a work-life balance are huge causes of dissatisfaction among hospitality professionals.
Young, aspiring professionals also choose to work with cruise liners. The biggest challenge we face is in the first 180 days, which we consider as an in/out period, in which the professionals decide to either remain in the industry or to leave it. If at this first touchpoint of hospitality, the impression of the industry can be enhanced, we will be able to overcome most of the challenges.
Vineet Verma, executive director & ceo, Brigade Group: Millennials are tech-savvy individuals, who research the position they are applying for, the interviewer they are meeting, and the company they wish to work with, with a few clicks on the internet. The companies are under pressure to maintain their positive reputations and publicly demonstrate that they have a productive, equitable and progressive work environment. As employers, we will need to cater to this knowledge and expect that the interview will be a two-way street.
Ashwin A Shirali, vice president - talent and culture, India & South Asia, Accor Group: The hospitality industry is swathed in stereotyped myths about poor work-life balance, stress at workplace and uncompetitive salaries at the entry level, all of which tend to stem the inflow of talent from other industries. The industry needs to collaborate to position hospitality as the best career option for young talent across all geographies.
The challenges faced
The current supply of professionally-trained manpower is estimated to be very dismal—8.92% of the total requirement, according to a Cushman and Wakefield report. The shortage of skilled manpower looms as a threat to expansion plans for big hospitality groups that are expanding fast, within India’s tier-II and tier-II cities as well as in mofussil towns.
Singh: The growth story is no longer about who has the market share; it is more about who has the talent pool and the bench strength. Tight P&Ls are not leaving any scope for developing session plans, and once the resource is exhausted there is no pipeline. The hotel development pipeline is not aligned to the manpower pipeline.
Dr PV Murthy, EVP & global head of human resource, IHCL: If the industry takes appropriate steps to build the right kind of skills, the current crisis can be mitigated. Also, the required skills on the frontline are not functionally complex and anyone with a high level of customer-centricity will find a degree of success. At the industry level, the ability to pay is increasing as we focus on upskilling and higher productivity.
Jain: If the talent pool does not grow exponentially, the cost of hiring the best of skilled employees will skyrocket, putting a burden on the bottom line and reducing the profitability of the hotels.
Verma: We have identified some of the gaps in training left by the hospitality institutes, which include inadequate computer training, multi-lingual barriers and short-periods of an internship. Also, hospitality practitioners have identified the lack of some important skills in professionals graduating from hospitality training institutes, such as operational skills, management skills, human relation skills, etc. which need to be addressed.
Hospitality education: The hits and misses
In comparison to international standards, hotel management education in India is on shaky grounds. The success of any course lies in its curriculum and contents. There are rapid changes taking place in the hospitality industry and the curriculum needs to match the needs of the industry. The industry representatives must be part of the syllabus committee and institutes need to plan short-term skill-based courses to enable students to master job-oriented skills. Students normally undergo industrial training in the second year or during the tenure of the course. This is when they should be empowered with higher skills.
Here is what experts believe:
Singh: The hotel management schools are primitive in their approach, while hotels are constantly innovating with conceptual ideas. In a cut-throat market, every hotel wants to stay above the game. The institutes need to be agile in their syllabus. They should start inviting shop floor managers to offer interactive training programmes for students, instead of just general managers.
Dr Murthy: Internationally, some of the institutes focus on building leaders and hoteliers. In India, they lack focus on inculcating the right leadership attitude amongst the students. Also, there is not enough collaboration between the industry and faculty, when it comes to curriculum building and teaching.
Jain: There is a need for the creation of a centralised course and syllabus centre, which can be commonly adopted by all hotel management institutions, irrespective of their affiliations.
Rajesh Kumar, vice president – human resources, Lemon Tree Hotels: Before taking up a career in the hotel industry, it would be advisable for aspiring students to spend quality time with existing hoteliers to acquire an in-depth understanding of the nuances of the industry. Certain students take up a hospitality career for its ‘glamour quotient’, which incidentally is only a small facet of the bigger picture. It would be advisable for career counsellors to conduct familiarization visits for students at different domestic and international hotels. This will offer students a firsthand understanding of the realities on the shop-floor, thereby setting the right expectations. The quality of the talent being churned out by the colleges is greatly influenced by the quality of the teaching faculty, both in terms of their skill and knowledge base. Teaching in hospitality schools, unfortunately, is not seen as a preferred career option by many quality hotel professionals. We need to change this mindset.
The solutions for high attrition rates
There are several: better hotel management education facilities; a more upgraded curriculum; more efforts from the industry to help people manage the stress of the job, and better pay scales to retain talent. Experts weigh in:
Singh: Digitisation can play a big role in bridging the gap between students and industry expectations. Inclusive work environment and empowerment are necessary so that everything is not dependent on a single person. A healthy bonding between the hotels and institutes will play a major role in offering a true perspective of the industry at the incubation stage.
Aroor: More industry interaction with institutes, newer job profiles, more tech support for mundane activities, and improving the quality of jobs and wages. Hospitality is generally a low-skill industry and the lateral hiring trends currently work against us. We have to seize the onus of ensuring job satisfaction by engaging our people in exciting initiatives. The current generation is about empowerment. Only at an associate level is money still the main motive. That’s where most of the attrition tends to take place. Our growth will hopefully throw up opportunities fast enough to keep moving people at pace along their career paths. At IntelliStay, every month, in every hotel, some of our employees are put through training programmes. Since we take over independent hotels, we inherit many employees from the hotels we acquire. It is fascinating to watch them experience formal training. What the younger generation asks for is empowerment, transparency, fair opportunity, democracy and growth.
Dr Murthy: We need to have stronger quality assurance and capability building in the hospitality training institutes so that we have ready talent joining the industry. More on-the-job skill-building programmes will partially address this requirement. We can look at upskilling young Indians who are at the bottom of the pyramid and create a talent pool not just for our organizations but for the industry at large, through a partnership with various foundations and not-for-profit organizations. We have trained and certified over 25,000 school dropouts in the last decade and have achieved over 80 per cent placement ratio. We help our not-for-profit partners to run courses in housekeeping, food & beverage services, kitchen and bakery. We currently support 14 skill development centres and faculty development programmes in association with Tata Strive in Mumbai, Bangalore, Jaipur, Jammu & Kashmir, the northeastern parts of India, Uttar Pradesh, etc, and have reached over 80,000 young people in the last two years.
Kumar: At Lemon Tree, we offer employment to Opportunity Deprived Indians (ODI), a group that includes people Persons with Disability (PwD) or those who belong to the economically and socially marginalised sections of the society, or transgender and other economically and socially deprived sections. Currently, close to 20 per cent of our manpower comprises of such employees. The northeastern states have proven to be a potent and perennial source market for talent acquisition.
Shirali: At Accor, we have a programme called ‘Accor Stars’, which allows students to undergo their job training while pursuing their studies. We also make conscious efforts to provide career options to women in their second innings and disabled people. We have institutionalised the use of psychometric assessments (aligned with Accor Capability Framework) as an integral part of the hiring process to ensure the right candidate for the right job.
Verma: One of our hotels has started to enforce nine working hours per day schedules and eight weekly offs in a month, to allow its employees to follow their passion. We try and understand what makes the millennial ticks. For instance, we have observed that they love giving back to the society and consider CSR very important. We have the required initiatives in place to ensure these employees can participate in CSR activities.
Vivek Bhalla, Regional Vice President, SWA, IHG: At present, women at IHG account for close to 15% of the workforce and we are working towards increasing this number significantly. We have initiatives such as ‘RISE’, our mentoring programme designed to encourage women to pursue a path to operations leadership.
Kumar: Offering multi-skill activities, role change and promotions help keep the employees motivated. Our women employee strength has steadily grown, from 7 per cent to 10 per cent at the close of this financial year. About 30 per cent of our senior leadership team comprises of women. Several policies have been instituted to provide a comfortable and safe work environment. As an equal opportunity employer, there is no discrimination between the genders when it comes to rewards and recognition.
Singh: Marriott’s robust and fast-track management training programme called Voyage Program trains the 140 to 150 ‘Voyagers’ we hire every year from premium hotel management institutes, with a commitment to placing them in leadership roles within 18 months. This ensures a robust pipeline of internal talent to supplement our booming growth in South Asia.
The wages need to match up
Low wages are a huge deterrent in the hospitality industry, with salaries being at a far lower scale compared to the other service industries, such as aviation or retail.
Aroor: If the wages have to improve, the industry will have to reduce manpower and become more efficient. The jobs that remain can have much better wages. Margins are always under pressure, but we need to find a new hiring model and go deeper into society to create jobs where they are needed most, and also appreciated.
Shirali: While mere enhancement in salaries will not have a high ROI, the alignment of salary levels to make it more remunerative will be worth the huge investment of effort and time people put on the job. It will also enhance retention.
Jain: A parity needs to be brought between the pay scales offered by hotels and the retail or the service sector. The hospitality industry also needs to realign its practices to enhance the work-life balance. It’s not uncommon for hotels to directly recruit people with the right approach and attitude, who may not be from formal hotel management institutions.
Re-skilling existing talent
Some of the best hospitality groups reskill their talent constantly, ferreting out people who show a promise in areas they may have not joined the industry in. Housekeeping staff could be wonderful bartenders; a front office manager can make for great marketing professional. How important, then, is reskilling the people already in the industry?
Aroor: Change of roles is a great way to start to find talent within. People like learning new things. We have operation guys in sales, engineers in property sign-ups, reservations in the front desk. We give people with a year’s experience or more an option to join pre-opening teams. This generation is driven by empowerment more than money. That’s where the solution lies.
Dr Murthy: At IHCL, we have a robust L&D set-up that continuously focuses on developing skills. Our certified departmental trainers work on building capabilities on key skills. We also build on our values through modules based on concepts of mindfulness and emotional intelligence.
Jain: We have an in-house learning and development cell that, along with the human resource team and the vertical heads, organises workshops and sessions to offer employees practical as well as theoretical training. As and when required, we also invite external trainers to coach them and enhance their work quality. We offer professional courses through e-learning modules from institutions we have tie-ups with, to our employees so that they can upscale their knowledge. We continuously measure the employee satisfaction index through surveys. Based on their feedback, we work around the areas of concerns to enhance satisfaction levels.
Kumar: The High-Potential (HiPot) Program identifies, trains and develops the top 30-35 per cent of our high performers, which helps us to retain the best talent. Those who go through the HiPot programme undergo an EAShip Program to understand how Lemon Tree Hotels function and also gain accelerated learning through experience transfer in associated departments. Besides, each employee is offered Individual Development Plans (IDPs), which includes 360-degree feedback. Every year, we target approximately 100 employees under this intervention.
Verma: 'New Generation Leaders' is one of the innovative recruitment fast track programme conducted by one of our brands. It helps newly graduated hotel management individuals to achieve their goals within 18 months of completing their training course, even as they are working at the hotel. The individual gains experience in all the departments of the hotel. Every department also conducts daily training programmes on different topics.
Bhalla: IHG has a tie-up with Harvard Business School, which allows us access to 42 learning modules online, at absolutely no cost. Such initiatives motivate our colleagues to develop a long-term career with IHG.
The government’s role
At the last count, there were 2.4 million people directly employed by the organised end of the Indian hospitality industry. The unorganised segments, and the others who depend indirectly on the industry—from contractors to caterers, from farmers to entertainers—could be a few million more. For a government looking to grow industries that offer mass-scale employment, there can be no better industry than hospitality. But is the Indian government doing enough?
Aroor: The government needs to realise that the industry accounts for a tenth of the GDP and a tenth of the jobs. No concerted effort has been made to have a proper national tourism mission. We need to create credit on infrastructure terms, we need to demarcate ‘Hotel Only’ development zones such as Aerocity Delhi, and we need to regularise tax to compete with our neighbourhood. Hospitality is not a sin Industry. It’s a virtue industry. Most new hotels are in the economy and mid-scale segments. Domestic brands have signed almost 62 per cent of all new hotels last year. We need to give a push to hotel development and economics. Nothing radical is needed, just some application of mind and policy. While international tourist arrivals are important, domestic travel is 100 times more than them, and cannot be ignored. The good work on infrastructure now needs to be extended to credit and land availability, as well as tax rationalisation. The jobs will follow thick and fast. The government just needs to ensure the industry is on solid ground on the policy front. Private enterprise will do the rest.
Dr Murthy: Our country is at an opportune juncture for the government to take the lead and incentivize industry-centric ‘common skilling platforms’. They can marry academia, industry, CSR and the not-for-profit sector to build a shared pool of open source curriculums, training content and faculty mentoring/industrial exposure modules which are relevant to entry-level needs of the industry. This kind of collaborative effort can help serve not just the goals of social inclusion but also engage the industry meaningfully.
Jain: The government’s support is only required to reduce the taxation on this industry, which is dependent more on manpower than on automation. Subsidising local hiring is also another approach the government can take, as the hospitality industry is present even in the most remote corners of the country and is creating jobs at the grassroots level.
Bakaya: The government support could be useful for sponsored programs and skill-training courses for staff-level employees so that the manpower available to the industry is prepared to deal with the needs of the business. Such Initiatives will help in improving manpower quality. The government should also initiate certain schemes and additional programs involving corporates, which can also offer measurable benefits to existing employees.
Kumar: The government needs to organise more job fairs and skill development initiatives, especially in Tier-B and Tier-C cities, where the avenues of employment are few and where talent is now available.
Automation could emerge as a possible solution
The future is AI. The future is augmented reality. These technologies will benefit the hospitality industry by helping them replace human resources, at least in mundane, robotic jobs.
Aroor: The introduction of technology will be gradual, but people in repetitive jobs will be replaced by automation. People will hold more quality jobs that require skill, intuition, warmth and application of mind. It would help manage bottom-lines and create consistency.
Dr Murthy: Automation can simplify processes and increase productivity. However, in an industry which is based on human interaction and relationships, it can never completely replace human intervention.
Mallika Rao Bedi, regional director - human resources, Hilton India: Like all industries, automation is a reality that will have a varying degree of impact and influence. In the hospitality industry, we will see an increased presence of digitization and automation. Hilton is leading many innovations in the automation space for the hospitality industry, such as digital key and connected rooms. However, the core ethos of our business is of people serving people.
Bhalla: IHG believes that the sector will continue to be service-led and technology will be instrumental in supporting the sector, ensuring higher levels of efficiencies and guest satisfaction.