Time to address key issues facing the Australian hotel industry: attracting and growing quality staff

AccomNews Wednesday, May 11, 2016

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Never before has there been greater pressure on the Australian hotel industry to attract, retain and develop personnel to fuel its growth.

With a record 100 hotels in the development pipeline, the demand on labour is reaching a critical point, a fact recognised by the staging of the first-ever Hotel Career Expo in Sydney on Monday 16 May.

The Hotel Career Expo to be held next Monday (16 May) in Sydney, emerged from the findings of the Deloitte Access Economics report: Australian Tourism Labour Force Report: 2012-2015, which was produced on behalf of Austrade. While the report highlighted the potential of tourism for the economy, it also pointed out the challenges the industry faced in terms of labour supply, or – more precisely – its lack of labour supply.

In 2015, this report was repeated for the period 2015 – 2020 and the findings reinforced those of the earlier report. These included:

• Businesses surveyed had an average vacancy rate of 7%, which – if reflected across the entire tourism sector – would translate to a current shortage of around 38,000 positions;
• 123,000 new workers would need to be sourced in the tourism industry by 2020. The skilled labour shortage is expected to be 30,000 workers, while an additional 63,000 unskilled workers would need to be sourced;
• There has been a large increase in the proportion of businesses identifying skills deficiencies, with 69% reporting skills deficiencies among their staff, up from 50% in 2011.

The report concluded that businesses are not finding the skills they need to operate effectively, which may ultimately affect the productivity and competitiveness of the sector.

Not surprisingly, regional and remote tourism destinations such as the Northern Territory were identified as experiencing the highest labour shortages, a situation that will not be helped by the introduction of the ‘backpacker tax’ from 1 July. Areas which have strong seasonality will always rely on seasonal workers, which is why TAA has been making such a strong case for the amelioration of the ‘backpacker tax’, and more flexible arrangements for temporary skilled migration visas.

Cleaners, chefs and cooks were the three occupations with the most commonly reported deficiencies (qualifications, skills and work experience), with skills again listed as the largest contributor to these deficiencies.

The report concluded that the inability to find workers with the right skills was the highest rated reason for difficulties in recruiting staff, and accommodation businesses have identified the need to establish more flexible working arrangements and formalised training programs to both attract and retain people in the industry.

Some positive responses were identified to the labour issues, including hiring mature age workers as a source of alternative labour, with just over half of all businesses having sought workers from this group.

Career development and promotion was considered a priority for new workers to the sector: “Retaining new entrants and providing them with the right experience will be crucial for the sector in overcoming its projected skills shortage. Attracting more workers to the sector and demonstrating career pathways will also be important in meeting projected shortages,” the report concluded.

The question has to be: why have we reached this critical situation? One of the most obvious reasons is that demand for hotel labour was relatively flat after 2000, with Sydney seeing just one 80 room Ibis hotel developed in the Sydney CBD in the decade after the “most successful Olympics ever”.

The same hotel development malaise occurred in most parts of Australia, possibly with the exception of Melbourne, and the situation was exacerbated by the GFC, strong Australian dollar and cheap international flights which saw flat growth in demand in Australia until the start of the current decade, as Australians flew to Bali, Phuket and Hawaii instead of travelling at home.

The fall in the Australian dollar, a rise in positive promotion of Australia, a massive expansion in air capacity from China to Australia, and the growth of domestic events has seen demand for local hotels grow dramatically and investors have responded accordingly with new and upgraded hotel projects across the country.

Sydney was identified in the Deloitte Access Economics report as one of eight national ‘hotspots’ with high levels of tourism and hospitality shortages. As a result a Sydney Tourism Employment Plan (TEP) was developed in conjunction with an Industry Advisory Group. TAA NSW was Deputy Chair of that group.

One of the recommendations emerging from the Sydney TEP was the development of an Industry Careers Day to lift the profile of the industry and attract long term recruits who see the industry as an aspirational career.

TAA also produces a Labour Benchmarking Study in NSW every second year. In June 2013 and in June 2015, the results demonstrated that skills shortages are very high for a range of managerial and supervisory positions.

‘Limited applicants with sufficient skills and experience’ was the biggest factor contributing to skills shortages followed by ‘limited applicant with required education/training’ and ‘competition from employers in other industries’. This highlights the need to address constraints with education and training and provide career paths to encourage people to stay in the industry.

The Hotel Career Expo grew out of the desire to attract both tertiary and secondary students to consider the industry as a genuine career opportunity. The core benefits of the day/week are to:

1. Highlight the wide variety of entry paths to the industry
2. Enable potential recruits to hear from leaders in the industry on their career paths
3. Provide those who are interested in a career with points of contact
4. Lift the profile of the industry and the opportunities

Austrade has commissioned another research report, which has been undertaken by Colmar Brunton, consisting of 22 focus groups from students to parents looking at careers in the hospitality industry, which also reinforced the incorrect perceptions amongst students about the lack of career opportunities, long hours and low pay.

For this reason, the Hotel Career Expo campaign is targeted very much at a younger audience with strong use of social media to get across the message.

Young industry members such as 23-years-old, Rachel Corby, Front Office Manager at Rydges Sydney Airport Hotel, are fronting the campaign to highlight the richness of the industry and the opportunities it presents. Rachel has already hosted the President of Tanzania, John Magufuli, in addition to many other household names and is now calling on students, graduates and young professionals, to choose a career in hotels, so they too can fast track their work development.

She hopes the Hotel Career Expo will attract high quality professionals into the industry, to ensure that the first impression every visitor gets is the right one.

“Whatever stage you’re at in your career, I urge people to consider hotels as a diverse and exciting industry to work in. It’s a supportive industry, which encourages you to grow and prosper, and can offer global recognition and prospects,”

One of the messages that we are really pushing is that the hospitality industry is far more than just housekeeping and wait-staff. People can create careers in marketing, most of the trades, HR, engineering, procurement, accounting…we have a full range of career opportunities.

The Hotel Career Expo is designed as the ultimate gateway for students, graduates and young professionals to find out more about the endless expert career opportunities available in Australia’s leading hotels – from hotel management, to sales and marketing, engineering, finance, IT, human resources, food and beverage and many more.

Those interested in the Hotel Career Expo are invited to attend the free event at InterContinental on Monday 16 May.

More information.