News for the Hospitality Executive
Hotel Jobs at Risk: Credit Crunch Likely to Impact
Human Resource Continuity
by Jeff Ross, HRG
Luzern, Switzerland – October 13, 2008 - October 2008 has been a historic month for the global economy. Dramatic terminology that was previously alien to most hoteliers – sub-prime, toxic debts, dead cat bounce, bear market – is now being flaunted as if we are all market experts.
There is no doubt that tough times are here and ahead, and one important question is whether the global hotel players will allow this to immediately impact upon their organisational Human Resources (HR) strategies. It can be all too easy to utilise a (potential) recession as a reason to reduce headcount and cut costs. This is in the short-term may seem like sound business practice, but the long-term recovery impact must be seriously considered before embarking on such negative measures.
Jeff Ross, Managing Director of HGR, has strong opinions on this theme, and shares his fears for global hospitality organisations (in terms of loss of Human Resource continuity) in the current economic climate. “Listed below are actions that we are likely to witness over the coming year by many hospitality organisations, if economic factors do not significantly improve. Of course certain action needs to be considered, and certain controls implemented, but how many organisations will manage the potential process in a strategic and non long-term damaging method, that may actually cost more than is saved? Time will tell”.
This first point relating to (change of) regional management structure
is very common in the hospitality industry. Organisations that employ
regional resources (e.g. regional Revenue Managers, regional General Managers,
regional Directors of Business Development, etc.) may make these functions
redundant as a cost-cutting measure. One could of course play
devil’s advocate and argue why the roles exist in the first instance, if
they can so easily be removed. Other organisations that do not employ
regional resources may react oppositely, and remove unit level non-operational
senior management (e.g. General Managers, Human Resource Managers, Revenue
Managers, Financial Controllers, etc.), replacing these with a cluster
or regional management structure as a cost-cutting measure. Both
of these scenarios have been seen time and time again during times of economic
uncertainty and recession. In the latter example, it is common for
the unit roles to return over time, and then inevitably the regional or
cluster roles become redundant. A full circle of change (and cost)!
Let us hope therefore that the economic climate recovers sufficiently
that many hospitality organisations do not start to plan and implement
short-term organisational (Human Resources) change, that will have inevitably
far reaching consequences that may not be immediately obvious at board
room level. Those businesses that find a way to minimise change of
Human Resource strategy during times of economic uncertainty will certainly
be those that see medium term gains upon their competitors.
HGR (Hospitality Graduate Recruitment) was founded in 2004 by former
Intercontinental Hotels Group General Manager, Jeff Ross.
|Also See:||Co-ops, Consortiums, and Clusters; Pros, Cons, and Cautions For Hotel Owners / Ronald A. Nykiel and James C. Makens / February 2005|