Want to survive the recession? Start getting more out of your staff
Two summers ago, Canadian hotel executives were bracing for an acute labour shortage. With that in mind, Hotelier hosted the Labour 20/20 Conference to address the issues and help prepare the industry for the coming storm. Then the recession hit, and everything changed. There’s still the threat of a labour shortage looming, but hotels are grappling with a more immediate problem — figuring out how to drive enough revenue through their doors to keep them open. Tough HR decisions are being made every day, and that can have a lasting impact on existing staff.
“As occupancy drops so does variable labour,” cautions Hank Stackhouse, president and CEO of Delta Hotels in Toronto. “And although there’s going to be fewer people working, service still needs to stay in tact.” That’s where it gets tricky, because while hoteliers are being forced to cut back on labour to keep operating budgets in line, they also can’t afford to see service standards slide. Getting more out of less is never easy — but it’s crucial that the guests that do frequent your hotel during this recession have an exceptional experience, so they’ll come back. Having a well-trained, highly motivated and engaged staff is more important than ever.
Surprisingly, while the hotel market in the U.S. has been hit hard from the economic crisis, some companies are reporting their Canadian operations are holding steady. “Our HR strategy shift in Canada has been minimal,” says Jim MacDonald, regional vice-president of Human Resources, Eastern Region, Hilton Hotels Corporation, in New York. “Although Canada is feeling the pressure of the economic crunch, our hotels were appropriately staffed to begin with, so they haven’t been as heavily affected as in the U.S. We’re not seeing the implications of significant staffing reductions.”
Hilton is also holding off on filling open positions, says MacDonald. “We’re watching our business levels on a weekly and monthly basis before we make decisions to hire.” He admits Toronto in particular is suffering from dips in average occupancy, but there hasn’t been a significant reduction of hourly staffing at most Hilton properties in Canada.
At the manager level though, adjustments have been made. “Where managers used to do just one arm of managing — let’s say a food and beverage manager who looked after F&B at one outlet only — in today’s environment, that F&B manager is now overseeing an outlet as well as room service, and taking on an expanded role,” he says. Moreover, hotel GMs are also moving around more than usual, and that includes those stationed at international properties. “Some of the leisure markets are getting hit really hard.”
Hilton also devised a creative new HR strategy to try and maximize its labour resources. “We looked at resizing our organization, and within that framework a ‘complexing initiative’ was recently launched,” MacDonald says. “We’re taking senior managers in larger departments like HR, operations, sales and finance, and instead of having one individual in each role at each property, we’ve got one person in that role for two or
Normally, when cuts are made, fear sets in among the employees that remain and morale can wane, but MacDonald reports that Hilton’s new initiative has been well received. “The feedback we’re hearing from our middle managers and employees is great. There are less layers of bureaucracy now. Senior managers are also very happy with the complexing initiative, because when business decisions are made they happen much quicker.” It also helps from a succession-planning standpoint, he adds, as managers are keen to add to their skills.
In any conversation about the current recession, it’s important to note that although the downturn has created a larger pool of available workers — with unemployment rates soaring to 30-year highs — industries must continue investing in labour. According to Mark von Schellwitz, the Canadian Restaurant and Foodservices Association’s VP of Western Canada, by the year 2015, about 21 per cent of the world’s population is forecast to be at least 60 years old. Right now that number is about eight per cent, meaning Canada will need 246,000 extra hospitality workers by 2015.
Arlene Keis, CEO of go2, a non-profit association based in Vancouver that develops strategic responses to the HR needs of the tourism industry in B.C., agrees that regardless of the current situation, demographics dictate the industry will face a labour shortage in the coming years. “People are mindful that the labour shortage is coming back,” she says.
Nevertheless, hotels in Vancouver and Whistler are viewing the current recession — and how it affects their overall labour strategy — differently than other cities across Canada, because starting in October they’ll be full in preparation for the 2010 Olympics. “We’re tracking daily sales, room rates and occupancy rates, and there aren’t major layoffs happening,” says Keis, even though she admits that businesses in the region are currently down anywhere from 10 to 25 per cent. “Employers are doing everything they can to hold on to staff. There’s certainly a reduction in hours, there are some companies who are shortening the work week for management to four days, and adding work-share programs. That’s what we’re advocating.”
Another recession-driven issue the hospitality industry faces out West is the growing number of temporary foreign workers. Unfortunately, right now there’s a low demand for workers of all types. “The world has changed dramatically,” says von Schellwitz. “Many temporary foreign workers will have to go home.”
Keis says there are “thousands” of temporary foreign workers in B.C., but she’s not certain what the protocol is for laying them off before their contract is up. “I’m sure Service Canada knows what the guidelines are, but regardless, it’s very expensive and time consuming to bring these workers up here, so companies are reluctant to let them go. And these people aren’t disposable; they’ve given up a lot to come here. There are moral issues to deal with.” But employers are doing everything to hold on to all their employees, she says, because they’re going to need them again in nine months.
The same can be said for hotels in Halifax, Quebec City and Calgary. Because once this recession ends — and it will end, as difficult as that may seem right now — hotels across the country are going to need the best-qualified employees they can find.
“Investing in people during this recession is tantamount to anything we do,” says Hilton’s MacDonald. “While we are managing to the business climate of today and not looking at the business levels getting bigger tomorrow, we’re also launching new training programs and continuing our existing programs, which keeps people engaged. Let’s alleviate their fears, because service is our number 1 priority — let’s focus on that and forget