Managing performance in the UK hotel industry – productivity, multi-skilling & migrant labour

Earlier this week I co-chaired a one day conference centred around an ESRC research project conducted by former colleagues at the University of Surrey.  This research had used data from a cloud-based labour scheduling system* used by two mide-scale hotel chains to manage their performance.  Data on every hour worked by every employee in over 40 hotels, going back five years and more, was analysed.  I am going to share with you what I regard as the main headlines from the conference (the Surrey team will be publishing their findings in a series of articles in relevant research journals over the next few months).

  1. The main driver of productivity in hotels is demand.  80% of productivity performance is explained by this factor.  This has two main implications.  First, hotel operators must focus on managing demand as effectively as they can, and the use of revenue management systems plays a central role in this.  Second, even though managing the workforce has significantly less impact on productivity than demand, it is is still essential to manage this, as – unlike demand – managers have complete control over this.
  2. Two workforce strategies emerged from this study.  The research teams were able to differentiate between three types of employee – those on permanent contracts, those on flexible contracts (often referred to as zero-hours contracts), and other forms of contract (such as agency staff).  Overall, it was clear that Hotel Chain A employed predominantly permanent staff, with some flexible contract employees; whereas in Hotel Chain B only around 50% of all hours worked were by permanent staff, and significant use was made of staff on other contracts, along with some on flexible contracts.  It was also clear, that these two different strategies were modified over time, especially with regards the different proportions of staff on each type of contract.
  3. Chain strategy and policies do not always create homogenous practice across all hotels.  Despite there being a clear chain wide strategy for deploying staff on different contracts within chains there was a wide range of practice.  This suggests that strategy implementation is strongly affected by each hotel’s location and the nature of the local labour market.
  4. Workforce deployment is more complex than imagined.  There is a relatively simple model of how hotel operators should manage their workforce is situations of fluctuating demand.  This proposes that the operation is staffed by permanent employees to the level required for the lowest periods of demand, and additional staff (on flexible contracts) are added to cope with periods of higher demand.  This is further refined by giving the flexible contract employees more or fewer hours, according to the level of demand.  This study showed that in practice it is more complex than this.  Most notably, it showed that in most hotels the number of hours worked by permanent staff varied quite widely over a year.  In other words, permanent staff could be deployed quite flexibly.
  5. Zero-hours contracts do not exist.  No staff member, employed on a flexible contract, had no work hours in any week.  Indeed the average number of hours worked by such staff was more than 12 hours a week.
  6. Multi-skilling had no measurable impact on productivity.   Some employees in most hotels were multi-skilled, working across more than one department.  This did not appear to affect productivity.  However this does not mean that multi-skilling is unnecessary, as it may have other effects such as improve employee retention, raise service standards and positively impact on staff morale.
  7. Migrants were employed extensively, but this appears to have no influence on productivity.  The hotel industry in the UK has always had a workforce made up of people from many different countries.  In recent years, there has been controversy over the idea that migrant workers, especially those from eastern Europe, are more hard working and conscientious than British staff.  There was no evidence from this study that showed any discernible difference in performance between hotels with high levels of migrant workers versus those with low levels.

*see my previous blog about eproductive.

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