The staff recruitment challenges and opportunities facing hoteliers as the industry continues to grow and evolve, with more properties opening their doors regionally and globally.
The growth of the Middle East’s hotel and hospitality sector over the past decade has been nothing short of phenomenal.
Its portfolio of world-class properties has attracted global admiration, while savvy investors have ploughed funds into hotel assets that on the whole, have delivered strong returns.
The rapid pace of hotel industry development shows no sign of abating as local and global brands continue to forge ahead with ambitious expansion strategies and capitalise on demand for new types of properties, particularly in the mid-scale and serviced apartment sector.
Around 151,454 rooms across 538 hotels are currently under contract in the Middle East, according to STR’s February 2016 Pipeline Report, which includes projects in construction, final planning and planning, but not those at the unconfirmed stage.
This represents a 40.7% increase in rooms under contract, compared to the number in February 2014, and a 42.5% year-over-year increase in rooms in construction.
Saudi Arabia reported the most rooms in construction (34,753 rooms in 77 hotels), followed by the UAE (26,957 rooms in 92 hotels). Four other countries each reported more than 3,000 rooms in construction Qatar (5,980 rooms in 26 hotels), Egypt (4,538 rooms in 13 hotels) and Morocco (3,619 rooms in 19 hotels).
It goes without saying that this calls for hundreds of thousands of new staff to work at these properties, which is a challenge in itself. But given the Middle East has traditionally sourced talent from outside the region to make up the numbers required to staff its properties, there are new hurdles emerging.
Established source markets for talent include Asia, the Indian Subcontinent and more recently, Africa, but with the hotel industry and economies in each of these respective markets now undergoing a similar boom to the Middle East, hospitality professionals are more inclined to stay at home.
In Asia Pacific, 594,917 rooms across 2,571 hotels are under contract, according to STR’s February 2016 Pipeline Report for the region, while 260,546 rooms in 1,041 hotels were under construction for the month.
China reported the most rooms under construction (150,101 rooms in 484 hotels) and the two other countries with more than 20,000 rooms under construction were Indonesia (23,667 rooms in 120 hotels) and India (22,388 rooms in 137 hotels).
Meanwhile, Africa has 62,192 rooms in 321 hotels under contract, says STR.
Markets under threat
“Traditionally, the Philippines, India, Sri Lanka, Indonesia and Nepal have been the major source markets for the majority of hotel positions,” confirms MD Warrier, the managing director of Bid Eid Executive Search, based in Sharjah.
“But these markets are gradually drying up due to opportunities arising within these countries such as improved education, social changes and employee expectations and working conditions, while the savings potential from wages earned for jobs overseas has diminished.”
Piers Burton, owner and executive director of Eagles Spearing Consulting, Dubai, adds that in India in particular, “as the middle class expands and incomes increase every year, junior staff are no longer seeing the potential to earn more in the GCC than they can at home”.
The days of paying staff the minimum possible wage are therefore over, he says.
“Hotels will need to align themselves with global realities and start paying fair wages,” he argues.
Meanwhile, in the Philippines, new government regulations in terms of the documentation and attestation required to work overseas is adding “strain on the market” and pushing up recruitment costs, notes Naim Maadad, CEO of Dubai-based Gates Hospitality.
However, not all industry recruiters believe traditional source markets for talent are drying up.
“But rather the requirements for the pool of talents are changing, as a result of the increasingly unsteady and fast-moving business environment,” argues Marta Nobre, director of HR at Mövenpick Hotel Ibn Battuta Gate Dubai.
“Flexibility, multi-cultural experience and a positive attitude are what recruiters are now looking for.”
Eddie Ignatius, corporate director of innovation & quality at UAE-based TIME Hotels, says the midmarket hospitality specialist is still “actively recruiting from countries such as India, Nepal, Pakistan, The Philippines, Egypt and Morocco as well as Eastern Europe, The Balkans and Central Asia”.
“In our experience, employees from these regions are well educated, extremely hardworking, totally reliable and have a very positive attitude,” he says.
The African market has “really opened up” as a source of talent too, says Maadad.
“The hospitality industry in their home countries is still in its infancy and they come to the Middle East to gain experience,” he notes.
“However, they are so eager to get a job here that they exaggerate on their CVs and when quizzed on specifics, the answer usually is not honest.”
Burton says Kenya, Zimbabwe and Nigeria are a good source of “confident and eater-to-learn junior staff”, and Warrier throws Ethiopia into the mix, while new emerging Asian markets for staff include China, Myanmar and Vietnam, he reveals.
But the main drawback to recruiting from these markets is the lack of English communication skills, he says.
Harry Kumra, vice president, talent acquisition at Jumeirah Group, adds that “one of the biggest challenges facing hotels is the recruitment of skilled staff with multi-language skills” and on the flipside, stresses the need for more Chinese-speaking staff given the growth potential of the Republic’s outbound tourism market.
“Having focused on this in recent years, Jumeirah has more than 120 Chinese-language speaking colleagues within the company”, he says.
Meanwhile, Mövenpick is looking to China and Russian-speaking countries for new recruits, because they can “easily fulfil our guest expectations”, says Nobre.
But what may surprise people the most, says Ignatius, is that the Dubai talent market is maturing.
“Our recruitment strategy is heavily concentrated on networking in the local and regional markets as this allows us to conduct a much tighter selection process within our local environment,” he says. “This means that we can move through the recruitment and selection cycle much more efficiently.”
Government programmes designed to get more GCC nationals working in the hospitality industry have had limited success to date, industry experts concur.
“Due to long working hours, compensation, cultural and social barriers, many GCC job seekers are not attracted to work in hotel segment,” argues Warrier.
“There is a visible and healthy development is this area, but the volume of manning requirements is so huge that the local work force cannot address these challenges. “
Burton describes the ratio of national staff to expatriate staff as “pitiful”, because “most nationals still enter government institutions or family businesses, not the hospitality sectors”.
Ignatius describes recruiting Emiratis as “challenging”, particularly as a mid-market hotel group.
“Salary expectations, long hours and the perception that working in a hotel involves serving and cleaning are the main obstacles,” he says.
“Increased awareness about the realities of working in the hotel sector is required to interest Emiratis and other GCC nationals. We should educate and improve perceptions that the hotel sector has many different career paths.”
However, the hotel sector compares poorly to the public sector in terms of pay and holiday entitlement, Ignatius says.
“For example, a national oil company in the UAE rewards Emirati school leavers with starting packages of around AED 25,000 per month, while university graduates can expect starting salaries of about AED 45,000 per month.”
Amar Belgat, director of HR & learning and development, AccorHotels Egypt and Saudi Arabia, agrees that Gulf talent favours public sector institutions or local companies over international groups, “and the hospitality field is simply not visible enough as an attractive career option for young Saudis or Emiratis”.
“The process of recruiting expat workers in the region can also be challenging, with housekeeping and culinary departments being particularly difficult to fill,” he says.
“However, GCC governments are now drawing more awareness to these issues and actively working to increase the participation of citizens in the private hospitality sector. In order to help emphasise their prospects in the industry, AccorHotels Middle East has put in place solid learning and development programmes for employees and management trainees.”
In addition to being the only international hotel group in the region with a permanent and dedicated training academy, known Tamheed, AccorHotels was also the first international hotel group to develop a special management programme tailor-made for Saudi nationals, called Saudi Management Training Program (SMTP), designed to encourage them to enter the hospitality industry and to nurture their careers within the group’s future management teams.
“The initiative, launched in November 2013, was Saudi Arabia’s first-ever hospitality management training programme and endorsed by the Saudi Commission for Tourism and Antiquities,” says Belgat.
“The second edition of the 15-month programme, which opened in March 2016 to 24 students, was expanded to also include Saudi women.”
To date, the SMTP programme has retained 13 of 16 students in management positions within AccorHotels.
“Overall, about 30% of our employees in the country are now Saudis, with the number of Saudi women employees also steadily increasing,” Belgat reveals.
In terms of the type of staff the industry finds it particularly difficult to source, experienced housekeeping, F&B and kitchen (including speciality chefs) and front office employees top the list, say the experts.
“With the number of new hotels F&B outlets, malls and FM facilities projected to open in the next four to six years, meeting human capital requirements [in these areas of operation] will pose a challenge,” says Warrier.
Burton adds that finding front office staff is tricky because source markets provide very little in the way of training colleges that specialise in this area.
Nobre says finding sales and marketing executives is tough, because not enough candidates understand the local market, while Ignatius believes the trickiest aspect of recruiting is finding “passionate staff
who are looking to progress their career within one hotel company”.
Maadad agrees and says too few employees perceive hospitality as a profession.
“For most in the field, it is a training ground to earn money and send their wages home to their home country, unlike in Europe and other countries where even at the age of 60, a waiter or butler regards his role as a true profession and displays a passion that is evident in his skill set and service levels,” he says.
“As long as the industry is perceived as an interim money earning source rather than a profession, it would be a challenge to retain highly skilled talent for long, as they would keep seeking greener pastures.”
In order to retain staff and reduce the high turnover levels, the industry must improve training and career progression opportunities, encouraging employees to think long-term about their careers, continues Maadad.
Warrier adds “healthy salaries and benefits, a longevity bonus, incentives, recreation facilities and scope for transfer within the organisation” to the list of measures that would help address retention challenges.
Kumra says the Jumeirah Group prides itself on the quality and effectiveness of the recruitment, induction, training and incentive schemes it has in place, which has led to retention rates much higher than the industry norm.
“One critical factor to retention is the clear provision of career growth opportunities and the commitment a company shows to this,” he says. “Jumeirah colleagues are able – and encouraged – to apply for internal positions within months of joining the company and we have a range of examples of colleagues who have started off in one part of the business and currently work in a completely different department. This also applies to providing the opportunity to move overseas with the organisation, with colleagues starting off in Dubai and Abu Dhabi properties, but moving to one of our hotels in London, Frankfurt, China, the Maldives, Kuwait and Turkey.”
The macro outlook
In order to keep pace with industry growth and recruit and retain quality staff, hoteliers will not only need to step up in-house training, but look to “work more closely with hotel schools, training entities, hiring partners and government bodies”, says Warrier.
Chef Michael Kitts, director of culinary arts at The Emirates Academy of Hospitality Management in Dubai, says hotel companies have a responsibility to grow the pool of talent for the wider industry – “a belief Jumeirah management has had from the very start”.
“Just two years after the opening of Jumeirah Beach Hotel, plans were put in place to open our own education facility, and two years later, the Emirates Academy of Hospitality Management accepted its first intake of students,” he notes.
“Today the Academy has more than 330 students comprising more than 64 nationalities, and a number have gone on to work in our hotels, but crucially, a large proportion have entered the hospitality industry in other companies – often competitors of Jumeirah. In fact, the membership of the academy’s Industry Advisory Board includes senior figures of a number of our closest competitors. The Emirates Academy of Hospitality Management is not an education system for Jumeirah – it’s an education system for the entire hospitality and tourism industry.”