Businesses in the hospitality industry succeed or fail on the satisfaction of their customers. The hospitality industry comprises three major segments: accommodations, food and beverage, and travel and tourism. Businesses within those segments can be as diverse as a mom and pop bed-and-breakfast, an upscale bistro and club, and a family-friendly theme park.

Employees are on the front line of creating satisfied customers. Despite their differences, hospitality businesses all share the same need for top-notch employees who are trained and empowered to provide outstanding customer service. With success hanging on the quality of its employees, a hospitality organization needs effective human resource management.

Employees, Customer Satisfaction and HRM

In hospitality businesses, your brand ambassadors are your employees. Whether an employee deals directly with the customers or provides a support function for those who do, their performance is what makes your business stand out above and beyond its competitors. The best way to hone your competitive edge is to recruit, develop and retain employees who are competent, accountable and passionate about their work. Just hiring a good worker is not enough. You must also strive to keep your employees’ skills sharp with ongoing education as you motivate them always to give their best performance.

These tasks fall within the mission of human resource management. A hospitality business needs a comprehensive HRM strategy to create a businesswide culture that emphasizes employee development, high performance and commitment to delivering quality customer service.

HRM Challenges for Small and Medium Hospitality Businesses

Large hotel chains and other large hospitality organizations typically have a corporatewide structure for HRM. However, small and medium-sized firms often lack the resources and staffing to develop such a system. Human resources functions are often divided among existing staff. For example, the business owner or manager may conduct most of the hiring and firing, leaving recruitment up to word-of-mouth from other employees. Training may be given “on the job” as experienced employees show a new hire “the ropes.”

This system may keep day-to-day operations going, but it leaves unaddressed such areas as employee development and morale, strategic growth of the business, and many legal concerns involving business operations and labor law. Consequently, some small and medium-sized business in the hospitality sector suffer from a host of problems, including noncompetitive salaries and benefits, poor morale, lowered quality of staff, disciplinary problems and high turnover rate, especially among younger employees. These deficiencies should be addressed through HR management. However, setting up a good HR system is in itself a challenge, due to lack of resources on the part of the business as well as difficulty finding and hiring qualified HR personnel for a small business.

Solving the HR Situation

Small-business owners in the hospitality industry need to take an investment view of HRM. Planning should begin by analyzing the current service capacity of your existing staff, creating job descriptions and qualification requirements, and projecting current and future HR needs. It may pay to hire a specialized manager to oversee the HR workload and address problems such as absenteeism, poor morale and high turnover rates.

Employee recruitment is typically a weak area for many small hospitality businesses, which often use low-budget recruitment techniques. One option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. Recruitment costs are relatively low, and the pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires.

Training and employee development can also benefit from association with a college or university. Look for continuing education courses and support your employees by reimbursing all or part of the course fee. Business associations within the hospitality industry may offer conferences, seminars and online instruction that can be a valuable source of employee development opportunities.

Most business owners in the hospitality sector have an appreciation for the role of HRM but lack the specialized knowledge to apply best practices and determine impacts of HRM on the business itself. Training and development should extend to the owner and upper-level managers of the business. Having a well-rounded knowledge of current management practices enables the owner and managers to apply updated procedures and techniques, both in HR and other aspects of the business. The results should pay a dividend in terms of more efficient operations and heightened employee performance, leading to greater customer satisfaction and repeat customers.