Friday, July 01, 2011

Manpower crunch plagues Hospitality industry

As India's hotel industry readies for unprecedented growth, it is about to face a manpower crisis the likes of which it has never seen before. Too few people are being trained for the industry; many of those who have received the training choose greener pastures and fierce fights break out regularly to keep or poach the few who remain. All this while a new hotel or restaurant is being added every week.

"It is a battle every day to retain people you have groomed over the years. While earlier the mantra was to engage with the staff, today you have to keep them enchanted," said Sujata Guin, Regional Director of Human Resources at luxury boutique hotel chain The Park. "It is not just other hotels we are losing people to. Everyone wants a piece of the hospitality pie — retail, telecom and banking."

With India's economy expanding by about 8% a year, the number of people travelling on business or for pleasure is booming. Every year, there are 540 million domestic travellers and the number of overseas tourists will increase from five million now to 18 million by 2016, according to HVS Hospitality Services, a consulting firm focused on the hotel industry. Where India now has 62,000 top-quality rooms for such travellers, by 2014 it is expected that there will be 150,000 rooms. But where are the chefs, butlers and bellboys to serve all the guests?

Surveys show an immediate shortfall of 30-40% in the supply of quality manpower as students passing from hotel management institutes shun the profession because of poor pay and long work hours. They prefer to work overseas or with cruise liners, airlines and retail companies. One such student is Sandeep Singh, who graduated this year from the International Institute of Hotel Management in Delhi. He had offers from Le Meridien, Pullman and The Oberoi but he preferred to join an event management company.

"I am getting three times the money offered by the hotels and I do not have to work for 14 hours a day," he said. Another hotel management graduate Manish Paul took up a job at Kingfisher Airlines, a decision he made after working 42 hours on the trot at a hotel during his training. Nakul Anand, who heads the hospitality, travel, and tourism businesses for ITC, said six out of every 10 students from the Welcomgroup Graduate School of Hotel Administration run by the business conglomerate do not join the hotel industry.

"We need to find more creative ways to attract people," he said. There was a hotel boom in the late 1980s and 1990s but demand for manpower was met by hotel management and catering institutes. This time, the industry is ill-prepared. Anand, who is also the president of the Hotel Association of India, estimates that the hotel industry will need to add 100,000 staff within four years. But only about a fifth of this number are even being trained and a big slice of them will not join the hotel industry.

Suresh Kumar, President of Fortune Park Hotels, a division of ITC Ltd., said that when demand outstrips supply, the existing talent pool becomes extra precious. Hotels also hire those just out of training school and groom them, but quality is inconsistent. Fortune will open 24 new hotels with three years and will have to hire two people for every room it constructs.

KB Kachru, Executive Vice-President for South Asia at Carlson Hotels, the owner of the Radisson brand, points out that in the recent past some of his staff have ventured out to become entrepreneurs, robbing him of valuable top-flight talent. At the other end, salaries for the junior-most staff have gone up 50-60%. Carlson is setting up 19 new hotels that will come up within one year and require an average of 250 staff per hotel.

While hotels expand rapidly, training institutes that supply the manpower are not keeping pace. Furthermore, many in the industry complain that the training provided by many institutes is outdated. Most hotels resort to an extensive internal training programmes to meet their needs.

Shalini Khanna of IIHM in Bangalore is of the view that the manpower shortage can be bridged only if there are more professional institutes. IIHM trains about 700 students a year nationally, of whom 200 opt for jobs overseas. In this clamour for quality staff, home-grown hotels are under immense pressure as people are attracted towards international brands, which are now expanding in a big way, said Anupama Jaiswal, senior associate at HVS Executive Search, which helps hotels recruit staff.

Big hotels chains such as EIH (Oberoi), Taj and ITC prefer to rely on inhouse courses and training to cope with the problem. ITC Hotels, said its chief operating office Dipak Haksar, has also introduced monthly career development reviews for discussions and dialogues on talent development, succession planning and career management. While hotels are trying to cope with in-house training the manpower shortage will only worsen. Mid-term salary revisions and extraordinary pay-raises are among ways the industry is attempting to retain efficient employees.

The 2011 HCE India Hotel Salary Survey shows that in spite of difficult times, compensation levels in 2010-11 are comparable to those in the boom year 2007-08, when disproportionate salary increases — up to 43% — were seen throughout the industry.

The problem is that when hotels spend so much time and resources to train and groom people, it causes a crisis sometimes when people leave. "So, we have created an internal system to create a pool of leaders, to have back-ups if someone leaves. We are exploring alternative sources of recruitment. We are taking people from the north-east, smaller cities, aviation institutes and grooming them," says Park Hotel's Guin.

Source: The Economic Times, July 1, 2011
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