Identify Operational Issues Experienced by Tourism Industry - Employee Turnover and Skilled Labour Shortage!

Employee Turnover and Skilled Labour Shortage In Tourism Industry

Tourism industry of the countries is significant in delivering growth to the economy and decreasing unemployment rate. The main objective of this report is to identify operational issues experienced by tourism industry and provide further discussion regarding the issue. Several factors such as high work pressure, long working hours have been identified as the factors to increase issue of employee turnover in tourism industry. HRM practice is important for maintaining staff motivation and productivity in tourism industry. Theoretical aspect such as Maslow's hierarchy of needs and Theory of X and Y indicates the motivation strategy of staff especially in tourism. Physiological, safety needs, belongings, esteem, and self-actualisation are essential needs for staff engagement and reduce turnover rate. Furthermore, multiple strategies such as development of training or career growth opportunities have been found to deal with this issue. A case study associated with demographic challenges in increasing employee shortage in tourism industry has been observed in this report. Finally, recommendations like implementation of appropriate technologies, marketing strategieshave been highlighted as the solution to challenges.     

Background 

Hospitality industry is one of the most fragile and important industries all over the world. In the economic development of any country, tourism plays an essential role in contributing to a sustainable amount of foreign exchange. According to Floricic (2020), the tourism industry is a source of public and private income and the government charges multiple taxes on this industry, which work as government revenue. Societal progress in countries is driven by tourism industry as tourists learn to show love for each other, tolerance, and respect when visiting new places.

Identified operational issue and rationale for it

Operational management can be described as the transformation of numerous inputs such as people, information, finance, material, or methods into outputs like services, employee and customer satisfaction, and profits. It has been identified that hospitality sector is seeking a lack of growth opportunities due to its poor operational management and higher employee turnover (Cicerale, 2020). Operational issue of tourism industry identified in this report is 'skilled labour shortage, staff turnover, and irregular working hours. Labour shortage is not a short-term threat to tourism industry and in today's time job irregularity; long working hours are known for decreasing job demands in this industry.

It has become an issue now because hospitality workers have started to leave the industry and a survey has revealed that around 50% of hospitality workers in the US do not want to continue their work in this industry (Kwok, 2021). On the other hand, in UK, employee turnover in hospitality industry has been seen as 30% higher than in any other industry and it is predicted to further rise in future (Birkin, 2019). The main reasons behind this staff turnover have been found as the minimum wages earned by the workers even after working for long hours. Furthermore, lack of employee development programmes, lack of patients among staff, and loyalty among them result in delivering the reputation of higher employee turnover to this industry. Therefore, this issue is chosen for this report to highlight strategies to combat staff turnover and staff shortage in tourism industry.

 2. Critical discussion of the operational issue

Factors contributing to staff turnover (ST) in tourism industry

Hospitality industry is considered a labor-intensive industry that continuously requires skilled labour and professionals to perform operations that include serving drinks or foods to guests, bed making, and so on. Ibrahim et al. (2020) mentioned that one of the most significant factors that have contributed toward negative perception about working in this industry is work pressure. People nowadays want a pleasant and enjoyable working environment and want to avoid any stressful working environment that leads to pressure. Employee stress has been identified as a significant prevalent issue in hospitality industry, which is reducing attraction of workers toward this industry. Nevertheless, Goh and Okumus (2020) opined that such work conditions could be maintained by the industry by including a sustainable work environment. In order to attract Generation Z employees, tourism industry can work on increasing its wage structure and include better operational management.

Figure 1: Factors in increasing employee turnover

(Source: Ibrahim et al. 2020; Goh and Okumus 2020)

Chalkiti and Sigala (2020) highlighted factors like long working hours, lack of opportunity for career development, poor job satisfaction, unsatisfactory working relations, and lower financial returns that contribute to higher ST in tourism industry. It has been found that although average employee turnover in all industries is 12% to 15%, tourism industries experienced an ST of about 150% annually (Harver, 2022). Staff of tourism industry rarely gets the opportunity of working in a fixed set of schedules. Regardless of the job role, the tourism industry wants hard work, long and irregular working hours to meet guests' demands. As a result, it creates stress and pressure on the staff as they are unsure about actually, when their working hours might be and when it will end up. A survey revealed that 79% of staff in tourism industry has to spend four to ten hours in their working shifts and in UK, about 39% of staff in this industry spend eight to ten hours or more working (Inews, 2019). As a result, about 24% of employees experienced issues in mental wellbeing, which further drive ST (Inews, 2019). However, Wright et al. (2021) highlighted that as demand in tourism industry has risen therefore skill shortage has not still come to a worse position. Tourism industries focus on Gen Z talent forces, allocate training on emerging technologies and customer service skills to fill its skill shortage and motivate employees.                      

Human resource management (HRM) practises

HRM practises have a great influence on the turnover of employees along with the shortage of skilled workers in the tourism industry. According to Baum (2018), HRM strategy is important that helps in recruiting staff, maintaining planning for shifts, and planning for future recruitment of employees. Therefore, proper planning along with employee training strategy implementation by the HRM department is required for the development of the tourism industry. HRM department provides planning for proper maintenance of well-being along with a rewarding system for employees that can strongly motivate them to provide better performance during production.

Consequences associated with ST

Financial consequences along with short skilled labour forces have been experienced by tourism industry due to higher ST. According to Samengonet al. (2020) high staff turnover results in lowering efficiency and productivity of the industry, increasing its new recruitment costs, lost profitability, and time spent on training new employees. ST in tourism industry continuously damages quality services, which are resulting in negative growth of the sector. On the other hand, Umirzakovet al. (2019) opined that hiring new employees in the place of old employees is beneficial in including new skills, knowledge, and ideas within business. Besides that, new employees are less resistant toward change, which becomes another advantage for the industry. Nevertheless, as old employees are fully aware of their responsibilities and skilled enough to complete their duties and deliver quality services to guests, ST negatively impacts service quality in tourism sector, which is the main objective of this industry. 

Strategies to manage ST

As per the opinion of Abo-Murad and Abdullah (2019), hospitality industry hugely benefits from human resources and it contributes to accelerating its competitive advantages. Therefore, it is necessary for the industry to adopt accurate crisis management strategies that are beneficial to reduce ST and increase employee retention. Crisis management refers to the systematic approach performed by organisational members with the help of external stakeholders to avoid crises or mitigate those from occurring. Effective crisis management can offer the industry to deal with critical situations and maintain revenue and profitability. In this context, Ibrahim et al. (2020) highlighted several strategies that can work on attracting GenZ toward hospitality industry and drive crisis management, whichis described in below table-

Table 1: Strategies to manage employee turnover in tourism industry

(Source: Ibrahim et al. 2020)  

Theoretical framework

Maslow’s hierarchy of needs

Maslow's hierarchy of needs is based on the five important concepts through which the satisfaction level of any individual can be determined easily. Those five concepts are physiological, safety needs, belongings, esteem, and self-actualisation.

Physiological: This is generally the biological requirement such as food, shelter, clothing, and other required components for daily life. Therefore, the satisfaction of employees can be possible if these things are well available for staff during their work in any organisation such as in the tourism industry.

Safety needs: Satisfaction with the psychological needs requires safety needs that an employee wants during working tenure. Therefore, providing life security, financial safety along job safety in the tourism industry can provide safety to the employees. Safety training along with personal protective practice can be helpful to safeguard employees from any risk (Fox et al. 2018).

Belongings: belongings indicate emotional and social needs such as interpersonal relationships and connectedness with others. The presence of those facilities can improve the satisfaction rate of staff through which improvement of the tourism industry can be possible.

Esteem: Esteem is the fourteen important aspects that include dignity, achievement along a desire for reputation. These are important for the improvement of satisfaction rate along with reduction of high turnover issues of employees.

Self-actualisation: This indicates the level of desire for accomplishing every need that can motivate employees strongly to reduce turnover and retain skilled staff.

Theory of X and Y

This theory is based on the employee satisfaction that is explained by McGregor. Theory X indicates a pessimistic view of the employees within a workplace that helps in the identification of motivation as well as a strategy of workplace management by an organisation. This X and Y theory indicated two stunningly different expectation sets within a human (Mansaray, 2019). Theory X is based on performance appraisals along with remuneration based on tangible results. This style of the concept indicates the identification of the dislike of workers, requirement of supervision, avoidance of responsibility and work without any incentives.

Figure 2: Theory of X and Y

(Source: Mansaray, 2019)

However, the Y concept indicates different from that of X theoretical concept that shows happiness during work, proper decision making along with active involvement, self-motivation, taking responsibilities and solving critical problems. These are the factors that help any staff to become more motivated during their working tenure. Further, presence of the satisfaction for staff helps in maintaining a meaningful career.

3. Case study: Demographic change as a driver for tourism automation

Demography is considered one of the most important external factors that shape tourism industry. Demographics of developed countries are changing with time due to the migration of people from less developed countries to Western world, which resulted in a changing workforce and demand for tourism.

The case study of Webster and Ivanov (2020) on the role of demographic changes in driving automation in tourism industry has been chosen for this report. It has been identified that in last few decades, revolution in human reproduction has largely influenced hospitality and tourism industry. Technological advancement, introduction of birth control pills have changed the reproductive process from before. Approval of birth control pills by FDA has delivered full control to women in regards to reproduction. As a result, a massive change in demographics has been noticed in developed countries. In the context of population, technologies have led to a new reality and lower birth rates across the developed countries, which have resulted in poor young labour sources that need to contribute toward the economy of the country.

Figure 3: Fertility rates in different developed countries since 1970

(Source: Webster and Ivanov, 2020)

Identified challenges

?       Scarcity of human labour force due to decrease in reproduction rate

?       Negative perception among people regarding the quality services of automation in tourism

?       Data security threat in tourism automation

?       Budgeting required for modern technologies

?       Political and cultural barriers

The case study reveals that implementation of robots, artificial intelligence (AI), or automation in tourism industry in developed countries has increased due to the demographic situation prevalent in the countries. Higher abortion rate, old age population, and fewer reproduction intentions among women in the countries resulted in decreasing adequate labour force required to run hospitality industry (Webster and Ivanov, 2020). Besides that, in developed countries as the workforce gets old they retire which creates scarcity of human labour forces and forces the tourism industry to look for other solutions like automation where machines can be used to do the work of more than one person. Although automation has been chosen as an alternative to human labour force in tourism industry, there are several complications such as data security, service adoption, perception among people, and political concerns associated with digital tourism.

Nevertheless, the management of tourism industry should mitigate such challenges and rethink how tasks and activities associated with tourism industry need to be done with proper technologies. Along with that, taxation system presented in the country should also be a concern of the tourism industry before driving automation. According to Altinay and Taheri (2019), sharing economy has also become a challenge for the tourism industry, which includes peer-to-peer activities. Due to technological development travel agents come under threat as customers become able to buy their own travel tickets using agent services. Besides that, many check-ins in airports are automated which has also reduced the need for human workforces. There are several positive and negative impacts experienced by tourism industry that has been observed in the case study. One of the most relevant challenges or threats that automation has created in tourism industry is the negative perception among consumers regarding services delivered by robotics technologies (Tussyadiah, 2020). However, service quality maintenance through technologies also created positive perceptions among customers, which led to further automation in tourism and hospitality industry.          

These challenges associated with automation and demographic change in tourism industry are common in today's time and can be observed in most of the developed countries like UK, USA, Germany, or Saudi Arabia. Nonetheless, with the progress of technology tourism industries can offer low-cost services to consumers, which may work on increasing their expectations from the industry (Ivanov, 2020). Besides that, technological advancement also enhances communications, which deliver customer satisfaction in tourism industry, and therefore is rapidly adopted by hospitality industries to fight against human staff shortage and remain profitable. Other challenges associated with implementing automation in tourism industry include personal and sensitive data breaches of consumers. It has been found that tourism industries while focusing on personalised marketing or advertising use personal data of consumers, which increases the chance of data explosion.            

Recommendation

Deliver cost-effective services after incorporating technology

Affordable services, food, and beverages, hygiene management is all that consumers of tourism industry expect (Nayyaret al. 2018). Therefore, along with development in technology the industry can be recommended to update their cost structures and available cost-effective services to consumers. Automation should be the prime strategic priority of the tourism industry that ensures effective services associated with rescheduling travel times to consumers (Atyourprice, 2022). Furthermore, the tourism industry can use big data, cloud technology, and virtual reality in order to deliver a better experience to its consumers. 

Use modern technologies that can fill the gap of human labour force

The technologies like robots or AI have been mentioned in the case study to replace human labour (Webster and Ivanov, 2020). It has been found that the tourism industry can operate effectively even with less human labour force by incorporating AI. Besides that, robots can work faster than human beings can, which is beneficial in increasing productivity and efficiency. However, generation gap may result in customer hesitation, whichshould be mitigated by the industries by providing appropriate indications about how to use them. It has been found that the tourism industry of Japan is accelerating with the implementation of a robotic workforce in place of human workforce. A hotel in this country named Henn-na Hotel is recognised as world's first robotic stuffed hotel with the use of robots as front desks, customer information points as well as in delivering services (Revfine, 2020).     

Maintain standard data security principles and focus on advertising

It is important for the tourism industry to marketing about automation services to deliver information about the quality service maintained by the automation technology, opportunities it can provide in the process of booking an actual visit. Furthermore, while marketing services the industry needs to be careful about the effort it is providing as it works on increasing efficiency of the company (Calvaresiet al. 2019). Moreover, personal data of consumers need to be used carefully so that no issues like data breaches in technology-based services can take place. In the context of accurate marketing, the example of Marriott International can be mentioned that run hashtags over Instagram and Twitter (Digitaltravelconnectus, 2022). The use of such multi-channel platforms has helped the company to reach a diverse range of people and ultimately gain a huge audience.       

Conclusion

Long working hours, high work pressure and staff turnover in tourism industry has been concluded in this report. It has been found that the tourism industry in developed countries is struggling with retaining skilled labour due to the demographic changes and decrease in fertility over time. Nevertheless, to cope with these difficulties automation has been encouraged in tourism industry of these countries. Technology-based services experienced challenges due to a lack of adaptability among the population that has been found in this report. Finally, several recommendations for managing employee shortages by incorporating effective technologies have been identified in the report.