Contents
Issue 1 (Skills Shortage and Labour Market/Economy)
Significance of the issue in the New Zealand Hospitality Industry
Impact on New Zealand Hospitality Industry
Issue 2 (Employee Engagement and Retention
Significance of Employee Engagement and Retention to New Zealand Hospitality Industry
Impact on New Zealand Hospitality Industry Operations
Issue 3 (Perception of Hospitality Career Prospects)
Significance of the Issue on Hospitality Industry
Impact on New Zealand Hospitality business operations
Executive Summary
The hospitality industry in New Zealand has been facing several challenges. Despite the attributed growth of the tourism sector, there are still several issues affecting the industry’s hospitality sector in the aspect of HR practices and employee lifecycle. Most importantly, human resource management practices are the key and backbone of any industry in an economy. Similarly, to the hospitality industry of New Zealand, there is an urgency to deal with the issues affecting Human Resource management and employee lifecycle. The employee lifecycle (ELC) involves the activities in Human resource management that are focused on recruitment, hiring, retention, exit, or separation of employees from the human resource area of an organisation or an industry.
Although there are several issues impacting HR and ELC in NZ hospitality Industry, some of the key issues addressed in this paper include; skills shortage and labour market/economy, employee engagement and retention as well as the perception of hospitality career prospects. Various research studies in the field of HR have provided their research findings on the deep root cause of the latter issues and their implications on the NZ hospitality operation and performance. Some of the recommended solutions towards the latter issues include equipping a new generation will skill needed in the future in the hospitality industry, providing good working conditions that will help to change the culture of the industry. Besides, it will help to improve employee engagement and help to change the negative perception of hospitality career prospects. Hence, this will attract a new labour force and increase labour force demand, which will, in turn, positively change the employee lifecycle. The future of NZ hospitality industry depends on the actions that will be taken now. As much as some challenges are common across the world, we need to deal with our problems on our own and transform our hospitality industry.
Introduction
The hospitality industry of New Zealand has been one, coupled with various trends. As a result, it is taking a different direction, one that is defining the New Zealand Hospitality industry. Concerning the employee life cycle, effective human resource management helps an organisation specifically in this case, the hospitality firms, when it comes to attracting, developing, motivating, and retaining the best qualified and skills-equipped employees. Based on research studies coupled with enough evidence, various issues are affecting the New Zealand hospitality industry human resource management aspect. Such problems include the skills shortage and labour market /economy, employee engagement and retention, perception of hospitality career opportunities in Human resource management, sustainability, costs of living vs wage rates, generational differences in work values as well as increasing diversity in New Zealand (Crawshaw, Budhwar & Davis, 2020). In this research paper, skills shortage and labour market/economy, employee engagement and retention as well as the perception of hospitality career opportunities or prospects are they key issues to be considered on how they affect the NZ hospitality industry in terms of how they may impact HR practices as well as the ELC process.
Issue 1 (Skills Shortage and Labour Market/Economy)
Significance of the issue in the New Zealand Hospitality Industry
Numerous varied factors usually cause skills shortages, for instance, migration of people, inadequate and enough training sites and changes in technology. Skill shortage can be improved in this industry through better training, depth focus on staff retention and new strategy in talent acquisition. One of the issues affecting the NZ hospitality industry aspect of HR practices as well as management of employee’s lifecycle is the skills shortage and labour market/economy. The skills shortage implies that the problem has its roots in the labour market or lack of enough labour for the hospitality industry. Hospitality industry skills shortage is not just NZ hospitality problem but is a global problem that is seen as a threat to the future of this industry. According to recent researches on Hospitality Industry avers that NZ is one of the country’s whose industry is facing a skills shortage in this industry (Mckee, 2020). The industry is further projected to experience a worse shortage in the coming future. Many of the hotels and restaurants in New Zealand seems to be operating under the use of under-skilled labour force. Many of the investors in this industry are struggling to match the skills levels required in this industry and the customer demand for quality services (Williamson & Harris, 2019).
Impact on Employee Lifecycle
Employee Lifecycle is the stages in which a worker goes through during his stay or time in a company. One of the core impacts of the employee lifecycle is the development of skills and abilities that are revel at in the performance and their effectiveness during their time in the organisation. Commitment, development of the employee is another impact which helps in increasing the retention rate of the organisation. There are various factors behind the skills shortage and labour force market demand challenge. One such factor is the high turnover rates (Jones & Wynn, 2019). The hospitality industry of New Zealand has a high turnover rate which is contributing skills gap present in the labour market. The industry consists of many teenagers who are graduates with no experience to work in the industry. As a result, it is presenting a labour force market that is filled unskilled and inexperienced labour force. And based on the circumstance, the investors of such an industry are left with no option other than to choose from this industry. As a result of having skills shortage and low labour market, the NZ is faced with a labour force in the industry that is not capable of competing well and enhance the success of the sector (McKay, 2017). Likewise, such an issue is risking the NZ hospitality industry, turning into a fewer people-centric industry.
Impact on New Zealand Hospitality Industry
There are also other factors behind labour and skills shortage in New Zealand hospitality industry. Wage factor is one of the contributing issues whereby an inadequate motivational element is addressed like better pay and bonuses. We have experienced many employees working at the restaurant levels, leaving their employment as a result of low wages. Such a problem is a challenge to the retention of employees in HR ELC process. Skills shortage and labour force shortage moreover is a challenge to the operation in Human resource management practices (Murki, 2014). Training and engagement of workers would solve this issue by bringing in new talents and retaining top employees. Improvement of skills can be enhanced through elaborate fresher courses and training sessions. Many managers are now left with the option of employees under-skilled labour force and working towards equipping them with skills. The challenging aspect is that many of them are young graduates with a limited passion for staying in the industry and hence making it hard for human Resource management retain employees alongside the low wages factor making majority of them to shift (Iqbal, 2019).
The lack of skills and limited labour force in NZ hospitality industry is further attributed to technology changes. Hospitality industry employees are facing the task of incorporating the use of technology in their daily work. With a lack of knowledge and training on how to make use of such technologies, many employees are being pushed out and of the HR and ELC process (Triatmanto, Wahyuni, & Respati, 2019). The industry is further filled with young employees. They are proving to be a challenge considering that the few old employees with experience are reaching the retirement phase leaving the industry with limited labour force (Luo, 2010).
Literature Review
According to author Maré ( 2018) contend that employment growth in New Zealand is stable; thus, there is a need for younger skilled workforce in the country. In this article, the author further elaborates that strong migration-related population growth in New Zealand gives many industries an opportunity to source for the skilled labour market and initiate training to equip them with professional capabilities. Skills and labour market or economy is another area of study where HRM scholars have also provided their findings. According to the Hospitality industry in NZ is faced with a shortage of skills and labour market economy. Majority of employees are young graduates with no required skills and knowledge to enhance the performance and operation of the industry to the required standards. The latter is a challenge that is affecting the industry’s HR practices and the ELC process as there is a lack of skilled labour force to depend on. Authors Succi & Canovi (2020 ) converse the importance of soft skills acquisition improves the chances for graduate employability to a given industry. Research studies done in the previous shows that there is a need to equip graduates with soft skills which will significantly help in transitioning the hospitality industry of New Zealand.
Solution
Practical training and strategic talent acquisition are the primary solutions in ensuring that the new generation is highly skilled by getting equipped with technical and computer skills to be dynamic and competitive. The problem of lack of skills and the labour market is one that will take time to solve (Brewster, Mayrhofer, & Farndale, 2018). Hence, it is essential as recommended by research studies to discover the required skills in NZ hospitality industry that will be needed soon.
Issue 2 (Employee Engagement and Retention
Significance of Employee Engagement and Retention to New Zealand Hospitality Industry
Employee engagement and retention is another challenge towards the human resource management practices and ELC process in NZ hospitality industry. Employee engagement is an essential component of Human resource management and the ELC process. Employee engagement impacts the hospitality industry by increase morale and commitment of individuals as they feel appreciated and wanted in the firm. Employee retention leads to an increase in the number of talented employees who are productive and add value to the business. Employee engagement mainly refers to the working environment approach that is focused at providing the right conditions for all the employees in an organisation and even the industry as a whole aimed at encouraging employees to give their best each day and show their commitment to their organisational goals and values (Larkin, 2020). As a result, they will help in organisation success which enhances their chances of being retained as continuous employees of the organisation.
Impact on Employee Lifecycle
According to Mohamad et al. 2016 contend that organisational compensation influences positive performance, therefore, increasing effectiveness and efficiency in the workforce. Despite the various factors, compensation poorly stands out as the major stumbling block towards the challenge of employee engagement and retention (Law et al. 2011). Poor employee engagement is proving to be a challenge towards the process of employee retention and hence impacting the HR practices and the ELC process in the industry. With a low working condition, many employees are finding it hard to remain in such an enterprise. Hence, many restaurants and hospitality firms are experiencing a high rate of employees shifting from one employer to another, while others are moving out of the industry entirely.
Impact on New Zealand Hospitality Industry Operations
Based on the understanding of what employee engagement is, this is a challenge that the hospitality industry in NZ is facing. Employee engagement implies that employees need to be treated right and given the right conditions to work within. The hospitality industry in New York is facing a challenge as many of the employees are not being given the right and suitable working environments. Impact on New Zealand Hospitality Industry Operations is the provision of the entertainment centre, recreational facilities for tourists and the management of hotel and resorts. The growing hospitality industry has increased revenues for the New Zealand government and promoted the tourism sector. Another impact is the job creation of a high number of skilled and semi-skilled youths in the country. The hospitality industry has led to the impact of better infrastructure and the modernisation of food, travel and lodging. One of such factors is the wage rate factors the reduced wage rate is one of the factors contributing to having a poorly motivated workforce in the industry. As a result, employee retention is becoming a challenge. Having such a poorly motivated workforce is contributing to performance as well as operational challenges. Many of the employees in the hospitality industry are not happy and hence do show higher employee satisfactory leading to poor productivity of the industry. Several other factors are contributing to low employee engagement. Such factors include the poor culture of an organisation, the composition which translates into the makeup of teams and all the team leaders, the lack of clarity is also another challenge alongside the incompetence, poor cooperation and lack of control over employees’ behaviours in the various restaurants’ firms (Boella, 2017).
Literature Review
Employee engagement and retention is another area of research. Human resource management scholars have focused on. In a research study conducted by David Williamson, their research dubbed the hospitality industry as a Cinderella industry (Williamson, 2017). Although the tourism industry of New Zealand has grown significantly with a margin of 11%, the culture of hospitality industries firms is also a challenge towards employee engagement and retention as one of the factors contributing to distrust.
Disdain is another factor behind the employee engagement and retention factor. According to research, the hospitality industry in NZ has had a long-standing history of the problem of public discourse. It is an issue that has held the hospitality industry and service work in open disdain as a result of public discussion continuing in the industry. As a result, this is a challenge that is making hard for the industry to grow and attract skilled labour force (Bamford, 2012). Moreover, there is need to solve the final historical legacy which has continued to undermine the excellent work in the NZ hospitality sector and deal with the distrust and disdain factor affecting the industry (Harkison, Poulston, & Kim, 2011).
Solutions
The best solution is improving the working conditions of employees in the hospitality Industry. The strategy should incorporate also enhancing the culture of the industry. Improving working conditions is one way of attracting employees and encouraging the existing labour force to remain in the sector ( Navajas-Romero, Díaz-Carrión & Casas-Rosal, 2020).
Issue 3 (Perception of Hospitality Career Prospects)
Significance of the Issue on Hospitality Industry
The difference in perception of undergraduate students concerning hospitality careers is evident as careers factors like the availability of the job, and salary influences their choices. The importance of perceived attitudes towards the hospitality industry allows students to research their best fit and enable them to have better career choices. Perception of employees and the public is significant. Such an aspect is essential for attracting new labour force into the industry and having right working conditions in the industry. Changing the perception of the hospitality industry is mainly focused on changing the students’ perception. Having a positive perception is one of the attractive features of the industry that will help in improving the labour supply.
Impact on Employee lifecycle
Moreover, the perception of hospitality career prospects among many graduates and the general labour force market is a challenge also. The perception of people towards the hospitality industry is indeed contributing to the challenge of getting access to the skilled labour force. As a result, it is proving to be a challenge to the process of employee recruitment, retention and separation (Morley, & Heraty, 2019). The negative perception of people towards the hospitality industry reduces career opportunities making it a factor in the industry. The impact of lack of appreciation and commitment due to biased and negativity makes it hard for people to pursue such careers as a result of having a negative perception coupled with the challenges seen in such an industry.
Impact on New Zealand Hospitality business operations
The perception of hospitality career prospects is affecting the industries operation, especially in the aspect of availability of labour supply. As a result of the poor perception created towards hospitality, careers are making it hard for the industry to have enough skills and labour supply due to the few people pursuing such careers. The industry operational performance is hence hindered as a result of the slow having limited skilled labour force (Bamford, 2012).
Various factors are contributing to the low or negative perception of people towards the hospitality industry in New Zealand. Such factors include the inadequate compensation or wage factor, poor working conditions contributing to low employee engagement, the long working hours as well as the industry challenge of having a high turnover rate (Luo, & Milne, 2014). The perception of hospitality career prospects is seen, especially among the young labour force present in the industry of NZ hospitality. Young graduates who have just joined the industry tends to develop a negative perception towards the industry based on their experience of being subjected to long working hours, poor working conditions and low compensation rates and hence proving to be a discouraging factor towards the industry’s human resource practices of attracting new recruitment employees.
Literature Review
Research studies have been done on the impact of perception of hospitality career prospects in NZ hospitality industry. A research study done by Eric Brown and his colleagues focused on the hospitality management graduates’ perceptions of career factor importance and career factor experience (Brown, Arendt, & Bosselman, 2014). In their study, they compared the employees who stayed in the industry and those who moved out of the industry based on various perception factor. According to their research, graduates who shifted out of the hospitality industry of New Zealand considered it to be more relevant than staying in the hospitality industry (Brown, Arendt, & Bosselman, 2014). For them, they seem to know any contribution they were making towards society via their hospitality career. They cited out several factors behind their choice to move out of the industry as being rooted in the low wages and working condition alongside engagement factor.
Based on the conclusions from the research study by brown and his colleagues, many graduates left the hospitality with statistical evidence of 48%. Likewise, another research study conducted by Lu and Adler’s shows that the rate of graduates withdrawing from the hospitality industry stands at 32% (Brown, Arendt, & Bosselman, 2014). Moreover, graduates’ perception of hospitality career prospects in New Zealand is based on their different experiences and what they perceive as an important factor when choosing a hospitality career to pursue (Harkison, Poulston, & Kim, 2011). The feeling of satisfaction towards a job is another factor behind the high rates of people shifting out of the hospitality industry. Hence based on the analysis of such a factor, the ability of the industry effectively manage the ELC process is still proving to be a challenge (Brown, Arendt, & Bosselman, 2014). One challenge posed in the ELC process of NZ hospitality industry as a result of the perception of graduates towards hospitality career prospects is the recruitment and retention of employees.
Solutions
Changing the NZ Hospitality Industry should include dealing with changing the perception of young people towards hospitality career prospects. One of the ways of doing so is improving the working conditions such as compensation and working environment. That is effective in making the industry to be attractive by presenting a positive culture of the industry to the public. Hence, the latter will work towards changing the perception of the public and improve the industry.
Human Resource Practices
Strengths
Retention of talented and skilled employees is one of the strengths in which is characterised by the ability of the hospitality industry to provide an opportunity for growth, empowerment mechanism to responsible employees and collaboration ( Kumar & Mathimaran, 2017). The retention allows employees to progress in their careers and be successful in their process and workflows. Although the working conditions are not good for many, the ability of the industry to retain the experienced employees is one that is playing a role in industry sustainability. However, the challenge is proving to be strong considering that majority of that employee section is nearing retirement. At the same time, there is a problem of skilled labour force unavailability continuing to exist.
Weaknesses
Similarly, some of the weakness of human resource practices are deeply rooted in the inability of the industry to attract a skilled labour force. The compensation and working conditions provided by HR managers to their employees is one that is contributing to the poor perception of the public towards the industry’s career prospects (Kasasbeh, Harada, & Noor, 2017). Likewise, employee engagement is indeed poor, proving a challenge towards employee retention capability. The justification that poor compensation strategies like increment and low bonuses reduces productivity and leads to employees moving to other firms. Employee engagement, for instance, team building and focus groups, add value to the hospitality industry, thus mitigating the issue of the unengaged workforce. Chrisman et al., 2017 explains that issue with incentive compensation is of the major issues in labour or workforce.
Recommendations
Based on the analysis of the problems at hand in NZ hospitality industry, there are several steps that the industry can take towards salvaging the industry and turning into a success. Starting with skills shortage and labour market/economy, investing in creating a reliable labour market in the future should be embraced now as soon as possible. As mentioned earlier, there is a need to equip a new generation of employees with skills that will be relevant in the future (Law, et al. 2011). The labour market demand in the hospitality industry of NZ is facing a lower labour demand due to high turnover rate. Working on the high turnover rate will help in transforming the Hospitality industry labour market and boost its labour demand.
Similarly, enhancing employee engagement and retention will be based on the best approach to be taken on improving employees working conditions (Davidson & Wang, 2011). The industry is faced with poor working conditions that are contributing to the creation of a poor perception among the public towards the industry. Improving the working conditions such as average working hours, good compensation schemes, among other factors, will help to motivate employees in the industry and motivate other people into pursuing careers in this industry. As a result, this will boost the demand for labour and hence making it easier for the human resource management practices to implement their ELC process within the industry effectively. Good working conditions enables the process of recruitment as it makes the industry more attractive and also encourages employee retention HR practices. Employee engagement among employees will also be enhanced by changing the industry’s culture.
Conclusion
In conclusion, the hospitality industry in New Zealand is facing key issues that need to be addressed. For a long time, the industry has been facing problems affecting its human Resource management practices as well as impacting employee lifecycle (ELC). The key factors identified in NZ hospitality industry includes skills shortage and labour market/economy, employee engagement and retention and also perception or attitudes towards hospitality career prospects. Based on the analysis of the latter factors, it seems to be a vicious circle of problems. The lack of skills is contributed to the young graduates who are in large numbers in the industry. There is a limited labour market specifically for the hospitality industry due to perception created towards the industry tarnishing the industry’s name to the public. The poor working conditions among challenges such as long working hours and poor wage rates which are making the industry unattractive and challenging towards the ELC and HRM practices in the industry.
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