Talent acquisition to boost future
Investment in robust recruitment processes will be critical for the future success of the hospitality industry.
As Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, was recently quoted as saying, “Talent, not capital, will be the key factor linking innovation, competitiveness and growth.” Nowhere is this truer than in the hospitality industry.
Attracting and retaining the best talent in the region is increasingly a key focus for the hospitality sector, but it brings with it many questions. What are the expectations from our hospitality executives? Is the compensation to revenue ratio at par with the world standards? How well are some of the star hires treated? Why is the attrition rate so high? Are the people who are hiring properly qualified? Do they know what they are looking for?
In order to best understand the talent requirement ahead, it is perhaps worth looking at the macro growth picture for the hotel sector across the region. To do this it is important to consider the existing rooms supply pipeline, as well as the growth plans for the Middle East and Africa by the key global brands. Our latest research at HVS reveals the following:
4HERE ARE EXPECTED new hotel openings in the MEA region by 2020.
! RECENT REPORT SHOWS 158,441 rooms in 555 projects under contract in the Middle East and 57,626 rooms in 309 projects under contract in Africa.
4HE 5!% IS LEADING THE expansion of the hospitality market in the Middle East and Africa region, with nearly 100 hotel projects now under construction.
7E WILL SEE AN ADDITION OF another 28,898 rooms, in 2017 itself 16,000 hotel keys are expected to be handed over.
3AUDI !RABIA HAS ON-going hotel projects that will offer 36,742 rooms.
1ATAR WITH AN EXISTing hotel base of 110 hotels has 34 hotels in the pipeline.
The wealth of upcoming supply means that we estimate between 100,000 and 120,000 additional staff will be needed to support the increase in rooms in the region. As the search for new talent becomes more competitive, it makes it even more critical to retain existing qualified talent.
According to a study by the Society for Human Resource Management, employers will need to spend the equivalent of six to nine months of an employee’s salary in order to find and train their replacement. That means that for an employee salaried at $100,000, it will cost the company anywhere from $50,000 to $75,000 to hire and train a replacement. The situation is potentially even more extreme for the Middle East due to the increasing costs of relocation, and benefits such as housing, school education, travel etc.
Keeping in mind the accepted need for high performing talent, focus on controlling costs and the 80-20 principle, it is crucial that we effectively hire right the first time around. In the end, it will be the people who will be the key differentiators in our future success story.
Keeping in mind the accepted need for high performing talent, focus on controlling costs and the 80-20 principle, it is crucial that we effectively hire right the first time around