Diagnostic hiring approach key to hotel industry success


Dhruv Hoon , Associate Consultant – Executive Access

India is yet to touch the 4 million mark in terms of annual tourist arrivals, but the hotel industry is already under threat due to scarcity of professionals at strategic levels. Let alone the shortage; some companies may like to do a check on how many of their top executives are ‘A’ grade performers? Largely, the result of this exercise may indicate that their ‘A’ grade performers are far less than the company’s expectations.

Industry sources forecast that tourism demand in India is expected to grow at almost 9% every year. The requirement of such professionals will only increase in days to come.

Major reasons for the current acute shortage are:

1. Rapid hotel growth – more opportunities in other companies, as various hotel chains are expanding in the country. 2. Limited supply of trained hotel management executives at senior levels – this includes operational as     well as support functions.
3. Increase in options outside hotels. Example – airlines, retail, entertainment, customer care, facilities     management, real estate, BPO and other service oriented sectors
4. Inadequate internal development of employees at mid-management level
5. Lack of a diagnostic approach towards recruitment at senior positions resulting in mis-hiring.

While the first three factors are beyond the control of individual hotel companies; there is enough that can be done to counter the effect of the last two factors. When compared with other industries, it has been observed that most hotels in India do not adopt a diagnostic approach towards hiring of senior management executives.

High performing companies worldwide retain most of their top performers and ensure that the new hires at strategic levels are selected through a professional ‘search’ process. The objective of a search method is to identify and select the leaders for a company with a near accurate surety of the candidate becoming an ‘A’ grade performer in the company. This is done by assessing the strengths of the prospective employee and mapping them with the company’s goals & targets. This ‘match-making’ is a specialized process and involves expertise of an Executive Search Firm. Thus companies following this practice have sufficient ‘A’ performers at all times to lead their business.

International studies indicate that it could cost a company at least 14 times of the base compensation in case of mis-hire at a senior role. This figure could go as high as 40 times in some cases. Obviously, these companies have made some major errors in recruiting executives at strategic levels.
Most common errors are either one or a combination of the following:

• The job specification and job description is not in alignment with the company’s current business environment and its    long term goals
• The ‘universe’ or the geography for the search is not defined or is inappropriate
• The company fails to take notice of professionals in other fields who possess similar skill sets
• The candidate assessment lacks expert analysis of previous performance record and interpretation of key strengths in    relation to the desired objectives of the company
• The assessment does not analyze personality traits to check compatibility with the company ‘culture’
• Poor due-diligence of past performance of the candidates

Given the high rate of attrition, it is not surprising that many top slots in hotels remain vacant for long durations. This results in impulsive recruitment when crisis hits hard. An outcome of this activity is more mis-hiring, shorter tenures, higher attrition and lower efficiency in such companies. Furthermore, a feeling of discontent and low morale cascades down the organization structure.

An effective search process is a scientific tool that could reduce the chances of mis-hire by up-to 90%. This is because of a unique search strategy that is customized depending upon the dynamic internal and external environment in which the company exists. This involves an analysis of the company’s current position and its long term objectives. An effective search is a diagnostic process. The search strategy is carefully planned. The universe for the search is determined post identification of skill sets and cultural mind-sets of people in various countries, industries, and organizations. A large data base is prepared, interviews conducted and choices are narrowed down to the most relevant candidates.

Overall, it is recommended that hotel companies constantly develop their ‘middle management’ in order to prepare them to take on strategic roles, thus minimizing in-efficiency on grounds of attrition. When recruiting externally, companies must seek professional expertise of an executive search firm that greatly reduces the risk of mis-hiring and increases the possibility of bringing on board more ‘A’ performers.