Strategic human resource in the hospitality industry; A case of United States of America hotels


The report is a critical evaluation of the United States of America hotel industry. To accomplish this, there will be need to critically evaluate the extent to which strategic HRM can help organisations face the challenges of the future; under this section both external and internal environment of the industry will be evaluated.

The associated challenges anticipated in future by the industry and how best strategic human resource management can help the industry address these challenges are also of interest in this report. The second section entails application of SHRM to such activities such as human resource planning and flexibility of labour, strategic recruitment and retention strategies, employee development, knowledge management and succession planning, performance management, employment relationships and employee involvement, motivation and reward strategies all aimed at linking the concept of SHRM to support U.S.A hotels attain their plans and objectives. The third section revolves around the issue relating to change. It is worth noting that change in any industry is inevitable and for that matter this report will not only define change but also give an overview of the same and more importantly develop justified strategies to managing change as well as coming up with recommendation on the same.

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Industry overview

It is no doubt that hotel industry in the United States generates billions of revenue as well as providing millions of job opportunities both directly and indirectly. Records show that the industry is third behind automotive and food sores respectively (Becker & Huselid, 2001). The revenue generated by full service hotels of which are the largest section of lodging industry is about $80 billion annually.

Interestingly in the year 2005 only there was selling of hotel with approximately $22 billion. It will be rational for the paper to bring out clearly examples of hotels that provide full service and include; Marriot, Hilton, Hyatt as well as Starwood. All these except Hyatt are owners of majority of the hotel brands in the country. In terms of employment, the hotel industry in the U.S has provided job opportunities to about 1.

3 million people. Out of the total, a half works in full service hotels (Johnson & Scholes, 2002). A closer examination of the workforce will definitely leave on with the impression that indeed it is diverse in terms of age, cultural background, sex, gender among others.

It is worth noting that hotels located in the city centres offer employment to the urban populace. Approximately, the industry provides 8.0% employment opportunity nationally. The major issues facing the industry include the following; image and outreach, recruitment and retention as well as training and skills need.

For instance, the industry faces higher risks regarding employees’ turnover attributed to the fact that the industry is growing very first and the need for highly skilled employees is so high. Nonetheless, the industry has a lot of opportunities particularly due to the fact that technological advancement has ensured that people can connect and travel with ease. Additionally the growing need of people to experience services offered in the industry coupled with a stable political and economic environment offers the industry an opportunity to grow further. All these can be attained if the most important asset is well managed and led.

Strategic human resource management and future challenges

There is no doubt that employees are one of the significant resources that ensures organizations attain their desired goals and objectives successfully (Dubinsky & Skinner, 2004). For that matter, there is need to ensure that the resource is always at par in all sectors with regards to their capabilities to carry out tasks, duties and responsibilities in the most efficient manner.

In the hospitality industry human capital is what differentiates between good service and bad ones characterized with poor quality. It has been noted with concern that there are certain persistent challenges that will continue to face the service industry and especially the hotel industry in the United States of America (Dubinsky & Skinner, 2004). To understand the challenges the industry is facing, it will be rational for both the internal and external environment of the industry to be critically evaluated.

On the same line of thinking, it is worth noting that internal factors are those attributes or challenges the organization can have direct influence while the external factors or challenges refers to set of attributes that the organization in question can do very little to address the situation. Among the serious external factors that affect the industry include; global political as well as economic instability, volatility of the business, availability of hospitality alternative supply, security issues as well as issues relating to travelling (Haidment, 2007). On the other hand, internal factors mainly comprise of the following; increasing and changing consumer needs and expectation, intensive competition, higher operations costs, shortages of skilled workers, technological advancement, and higher rates of employees’ turnover, training and a diverse workforce. For the purpose of this assignment only those internal and external factors that are linked to human resource management will be evaluated.

Shortages of skilled and talented manpower

It has been noted with concern that just likes other industries; the hotel industry is faced with challenge of acquiring skilled and talented workforce. Statistics show that about 35% of the business entities in hotel are facing shortage of qualified workers (Haidment, 2007). Making things worse regards the estimate brought forth that in the next 10 years, the shortage of such workforce will go up by almost 15.0%.

For this reason it will be a challenge for the HR department to retain and attract employees. The individuals in short supply include cooks, pastry cooks, barmen, waiters, receptionists as well as chambermaids (Becker & Huselid, 2001). One cannot ascribe one cause to the current and the anticipated problem since a multiple of factors seem to result to the problem. One such factor is the attractive pay from other related service industry such as cabin crew, tourism among others has resulted to competition on the scare resource. Additionally, despite the efforts being made by institution of learning to encourage student take up hotel related courses, many of the targeted student are having other options such as business, nursing, engineering hence leaving very few individuals joining the course hence fewer graduates. Another factor that results to shortages of talented and skilled employees is with regards to the rapid growth of the hotel industry.

This coupled with higher pay in other countries especially in the Middle East particularly Dubai has seen to it that potential employees migrate to these countries since the pay is good.

Higher rates of employee turnover

Despite the fact that an organization might have at its disposal a diverse, skilled and talented workforce, ensuring that they remain and provide their services to the organization has been a challenge especially to the hoteliers. It has been shown that the amount of work as well as time for an average hotel employee exceed the 8 hours per day limit (Thornhill, 2000). This coupled with lower pay the employees receive and the fact that there are other service industries willing to provide competitive wages and salaries definitely has seen to it that hotels continue and will continue to loss their workforce. Similarly, it is a fact that most hotel in the United States of America have employed younger individual who are between 20 and 30 years.

This group of individuals have more to achieve in their lives (Sparrow & Cooper, 2003). For instance, they might be looking for more cash so that they can be able to finance their further studies. For this reason, they will definitely leave the hotel industry to go and study. Considering the issue of lower salaries, once they graduate they will look for better paying jobs particularly in other service industries other than hotels. Additionally, due to the fact that the industry is characterized by higher risks of volatility and fluctuations, workers once they learn of an opportunity elsewhere will not think twice on taking the new assignment (Desseler, 2005).

Diverse workforce

As noted in the internal environment of the industry, it is evident that the workforce in the industry is made up of purely people from different backgrounds in terms of culture, age, race, education level, religion, sex orientation to mention but a few. The human resource in this sector are also compelled just like in the other sectors to strictly adhere to the law of the land pertaining issues related to equal employment opportunities. At no time should any hotelier through his or her human resource department unfairly treat an individual or group of individual based on the various factors such as sex, age, and education level among others to later disadvantage (Leopold Harris & Watson, 2005).

Literature has it that due to the fact that globalization is a reality and it is a concept that will stay with mankind for the rest of his existence, sectors such as the service industries and particularly hotels will continue to have a much more diverse workforce. Considering the advantages brought forth by having a diverse workforce, it will be irrational for the HR not to have strategies in place that will aim at capitalizing on such advantages as improved organization outlook among others. It is worth mentioning that the consequences of not properly managing a diverse workforce are unimaginable and can lead to such issues as legal battle, poor public image, economic loss to mention but a few. Some of these reasons are largely contribute to high rate of employee turnover as well as attrition rates (Sparrow & Cooper, 2003).

Technological advancement

The pace at which mankind has experienced changes in technology since the inception of computers back in 1960s has been tremendous. From such innovations, various sectors in the world of business have embraced the technology with the desire that without such an initiative, their future will be doomed. However, it has been seen that although some organizations or sectors have successfully used technology to create competitive advantage, other have terribly failed in adopting this innovations. In the hotel industry, using technology can range from such simple tasks as keeping visitors record in a computer to such complex initiative as placing visitor’s orders online among others (Desseler, 2005).

Considering the fact that it is human who will command these computers for service delivery, it is imperative that the human resource department strategically places it self in ensuring that the workforce are capable of doing this successfully. On the same note, a serious concern comes to light and this is with regards to knowledge management, skills and knowledge transfer as well as training and education. There are various issues that hinder the human resource department from successfully executing sustainable and fruitful education and training programs and this will even be seen in the future.

Strategic human resource management and business strategy

According to Reddington, Williamson & Withers, 2005 strategic human resource management has been thought of as a concept which is proactive in nature aimed at helping organizations to be in a better position in meeting the needs as well as aspirations of workers while at the same time promoting the goals and objectives of the company. Generally speaking the concept of SHRM in the hospitality industry is aimed at ensuring that the human capital department is always a head of time in trying to help the business entity meet its objectives and goals. Having already defined SHRM, it is no doubt that if it is well thought-out during its application, ideally all sectors in the hotel industry will be positively impacted. For instance, during the process of brining in new employees, better strategies will be used during recruitment and hiring process (Leopold, Harris & Watson, 1999).

On the same note education programs as well as training programs will be developed. Similarly, SHRM will play a major role in ensuring that workers are motivated and highly satisfied with their jobs. All these will translate to lower levels of employee turnover as well as availability of skilled and talented workforce very vital for an organization to meet the needs, demands and aspirations of its customers. There are two components of strategic management; strategy formulation and strategy implementation. The former entails mechanisms of arriving at a decision on the direction to be taken by the organization in terms of mission, goals, strengths, weaknesses, opportunities and threats (Rosen, 1995). The later refers to the processes of coming up with structures as well as allocation of resources in order to achieve the best chosen strategy.

Last but not least, SHRM has the potential of ensuring that a workplace environment in which diverse workforce is appreciated, employees are motivated and satisfied leading to increased productivity of the industry in terms of provision of high quality services (Reddington, Williamson & Withers, 2005).

Benefits of using strategic HRM to support business plans

With regards to the challenges that are facing and might face the hotel industry in the near future, human resource department is in a better position to help hotel industry regain confidence in terms of having competent workers. Since the whole idea of strategic human resource management entails being one foot a head; there are a number of benefits that can be derived when the business utilizes SHRM to support its business plans. It is no doubt that if nothing is done in a timely manner the industry will suffer serious setbacks that will seriously injure not only the industry but also other sectors that relies heavily on it (Tanke, 2001). SHRM although a new concept in theory of business is seen as a macro-oriented approach of human resource management and for that matter a blue print of human resource allocation in order to meet needs of an organization.

SHRM mainly centres on the nature of human resource and management practices that impact on an organization workforce (Storey, 2007).

Managing diverse workforce

As held by Storey, 2007 one benefit that will be brought about by the industry when incorporating SHRM in its strategy entails the successful management of a diverse workforce. Policies that are in line with the government laws, guidelines as well as procedures will be core. This will ensure that the issue with regards to discrimination is fully addressed. Having in mind that a diverse workforce in itself is advantageous for instance, there will be various and indeed suitable alternatives to solve problem and more so transfer on knowledge. Tanke, 2001 suggested that when workers are treated equally, there is no doubt that there will be no resentments and for that matter the entire workforce will work in unity hence being productive.

Attracting and retaining skilled and knowledgeable workers

As noted previously one serious challenge facing the industry regards the issue of retaining as well as attracting talented and skilled workforce. Having the human capital management department think strategically, various mechanisms can be used to address the problem.

For instance, job description when clearly defined, competitive salaries offered, the period for interviews, recruitment and selections shortened to at most 2 weeks and a conducive environment in which workers can engage in a flexible working environment might contribute to employees staying longer in the industry. For instance a flexible working arrangement will ensure that a mother who is breast feeding will report to work at a time she feels is convenient to her thereby allowing her to spend time with the child. Additionally SHRM is also capable of ensuring that better and workable programs to enhance education and training are in place (Tanke, 2001). Additionally, there is room for the industry through its HR department to sign a memorandum of understanding with institutions of learning so that the former can benefit from access to talent while the later might benefit in financial gains among others. Other strategies that the HR can use to motivate its workforce is rewarding those who are performers and support those who do not seem to perform as expected so that they can gain confidence and engage their efforts in serving the industry. Promoting staff members can be a morale booster only if it is done purely based on performance and merit. It is worth mentioning that majority of the employees in this sector are very young. A well thought plan by the HR may decide to bring on board older workforce who will be more loyal as well as being experienced (Reddington, Williamson & Withers, 2005).

This group of workers will help in a great deal when it comes to sharing their experiences thereby enhancing knowledge and skills transfer. In the quest of attracting skilled workers, SHRM will factor in the issue of the industry seasonality and try to have in place strategies that will attract part-time works. To accomplish this, there will be need to not only identify potential new employees but to always be in contact with them.

Negotiating better deal for the workers

It has been noted with concern that various sectors of the economy are faced with unionized workers. Although this has its own advantages, it brings with it serious consequences that when not foreseen and corrective measures taken timely things might go beyond hand. SHRM will defiantly fore see this and advice the management regarding workers pay, duration they are expected to work, over time payment, work environment where workers can freely air their views with victimization as well as provision of learning environment. Ultimately, issues such as strikes or go slow will be a thing of the past and service provision will be uninterrupted hence making loyal customers happier as well as attracting new ones.

Successful adoption of technology

With strategic human resource management in place, it will be attainable to adopt change especially with regards to innovation in the most acceptable manner. Before adopting any innovation, the HR will have to develop the need requirement, come up with alternatives and the rest implementation and evaluation. While this is being done, HR will effectively communicate the same to the end users. In fact it would be rational if the entire process from the start incorporates the views and input of the employees. This approach will ensure that the employees will bring in issues that are of concern and even propose better ways on how to curb them. When the final decision is made and their inputs are reflected, there will be very limited room for resistance, hence the hotel industry will enjoy the benefits brought about by technological advancement.

Competitive advantage

Finally, SHRM is capable of ensuring that the workforce in the industry are well trained and educated hence highly skilled, are motivated and fully satisfied with their work. In return, the employees will feel the urge to give back something to the industry and there will be nothing other than providing the best of their best in terms of service delivery to customers. The ability to provide customers with unmatched high quality service in it self is a competitive advantage that will go extra miles in ensuring that the industry is a live an kicking even in the work of situations in terms of economy and competition (Reddington, Williamson & Withers, 2005).

Constant reviews of the strategies

It has been noted that where SHRM is applied reasonably in terms of evaluating and monitoring of the employees as well as proposed alternatives that have been implemented, emerging as well as burning issues can be identified and corrective measures taken to arrest an ugly outcome. Various ways can be applied by the HR in trying to evaluate and monitor any situation, for instance using interview or survey to establish the level of employees’ satisfaction with regards to a recently implemented education and training programs.

On the same note SHRM will bring the advantage of succession planning usually attained through better programs that enhance knowledge and skills transfer (Kearns, 2003).

Strategies for managing change

As noted previously, change is inevitable and for that matter organizations including the hotel industry opt to be in a position to manage change. Change refers to bigger changes and not smaller one faced by an organization. The changes or transformation include changing mission statement, restructuring, re-engineering and merging among other. The concept has been heightened by globalization propelled by technological advancement. It would be rational if the drivers of change in the hotel industry are identified since this will play a major role in dictating the best strategies to apply when managing it (Golding, 2010).

Major drivers of change in the industry

As suggested by Lindgren & Bandhold, 2002 the hotel industry is one of the most dynamic industries in the world. There are a number of factors that contribute to the industry to be seen as one that is prone to change.

Changing needs and demands of customers

The major driver of change in the industry is with regards to the changing needs and demands of customers. It has been noted that with technological advancement, consumers have been able to equip themselves with adequate knowledge which has eventually led to the tremendous changes on their preferences. For this reason, the hotel industry has to keep it self on toss so that it can managed to retain their customers by providing them with what they want.

According to Golding, 2010, it is also important to remember that most of the customers who travel especially to the U.S have carried out substantial research and for that matter hotels have no option other than trying to maintain high standards that will meet the visitor expects.

Technological advancement

Since the development of computer, major changes have taken place and more is expected in the near future. With the notion that those who do not adopt technology will ‘perish’ in the current world of business, the hotel industry is not left behind in their quest to remain one foot a head of their customers by adopting technology.

With the need to integrate information with regards to customer, databases will be generated to enhance networking. Consequently having in mind that the Y generation is growing and they are technology hungry, the hotel industry will have no choice but to adopt the same so that they can tap the benefits from this group of customers (Phillips & Connell, 2003).


As suggested by Burnes, 2004 the concept of globalization characterized by free movement of people, capital, goods and services has tremendous impact on hotel industry not only in the U.S but also globally. Due to high level of interconnectedness among people of varied cultures thanks to advanced technology that has enabled effective communication; the hotel industry has been changed to accommodate the varying needs as well as demands of their customers from across the globe. On the same note, globalization has brought with it the idea of merging and acquisition seen as the ultimate solution to curbing the issue brought about by stiff competition. When two or more organization join resources together to enjoy the benefit brought about by the synergy issue will always a rise and there is need to timely address them (Campbell et al.

, 2002)

How best to manage change

With the understanding that change is inevitable, the human resource management has no other option but to fully equip itself with strategies to manage change for hotel posterity. One best strategy is to bring everyone on board during the initial change process (Burnes 2004). At this point all the stakeholders will be allowed to air their view with regards to adopting change. For that matter, when the level of involvement is high, there will be very little room for resistance to change.

Similarly, wide range of alternatives will be evaluated hence ensuring that better solutions are in place to curb any problem that will arise. It is worth noting that this can be attained by adopting communication style that will allow free flow of information regardless of the hierarchy (Boxall & Purcell, 2003.). According to Boella & Goss-Turner, 2005 another strategy to manage change in the industry is to adopt the culture of a learning organization.

A learning organization has been thought of as a company which endeavour in facilitating the learning of its workers aimed at transforming the whole organization. This idea will help the hotel industry maintain higher levels of innovation and creativity hence being competitive. Similarly, a learning organization better places itself in responding to external factors hence maintaining competitive advantage. Similarly, learning organization when it comes to issue pertaining to changes is at an advantage as they can adopt change quickly and successfully (Lindgren & Bandhold, 200).

On the same note having in place effective style of leadership is another important strategy that will ensure change is well and successfully managed. If those individuals bestowed with the responsibility of influencing the thoughts of their followers are able to create an environment that is conducive and they can lead by example, then managing change will be a walk in the park (Paton & McCalman, 2000). More importantly, if the industry will have a committee to oversee issues relating to change such as monitoring and evaluating the same will help a great deal. With such a committee various issues arising during the process of adopting change can be timely addressed (Boella & Goss-Turner, 2005).

Conclusion and recommendation

Among the recommendation about change; the hotel industry opt to understand that change is inevitable and there is need to carryout soul-searching before adopting change, it is not always guaranteed that adopting change will enhance success and finally strategies to successfully manage change is called for.

From the review of strategic human resource management in the hospitality industry, it is apparent that various challenges such as lack of skilled and knowledgeable workers, higher rates of employee turnover among others can be successfully addressed. Similarly, the major drivers of change in the industry include advances in technology, changing demands and aspirations of customers, globalization as well s the desire to form mergers and acquisitions. It is paramount from the analysis herein that having in place strategies to manage change such as allowing everybody to be on board, effective leadership and having a committee bestowed with the task of monitoring and evaluating change will help the industry to successfully adopts change.


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