Hospitality Industry
6 min read

The impact of a learning and development strategy on hospitality profitability

In his recent TED Talk, fine-dining restauranteur Will Guidara claims “We are on the precipice of a becoming a hospitality economy” – a sentiment which I wholeheartedly share. It is based on the fact that since the shift from a manufacturing to a service economy, the gateway to success is now via excelling at customer-service provider skills. The industry sectors seeking human-centric, interpersonal soft skills are ever growing. And yet if this is the case, who’s championing, supporting and, ultimately, investing in the training of these highly sought-after competences? Investing in an employee learning and development strategy signals a human-centric company culture that not only nurtures growth but also a competitive advantage.

The role of a continuous learning culture

 

Once the role of culture is understood as a competitive facilitator, it might become easier to address the question I keep coming back to: If the service economy is in such full expansion why are so few companies taking the risk to invest in the learning and development of the skills required? Commitment to employee growth, ensuring that personnel have a scalable future in a company – surely these are indicators of a workplace culture worth signing up for?!

The hospitality law of attraction must respond to new work incentives based on continuous training, upskilling and reskilling. A learning paradigm is ready to inform the future of hospitality work, culture and education: it is based on leadership styles that promote personal and professional employee growth and a sense of belonging. It is equally based on an industry that has decided to invest in its own future.

 

The challenges in today’s hospitality landscape

Our industry needs to reposition itself as an enticing, innovative and rewarding career choice with future prospects if it is to successfully manage the current dichotomy of a resurgence in hospitality demand on one hand and the dearth of employees on the other.

It took, among many external factors, a global pandemic to show up the inconsistencies and weaknesses of an industry that was considered an exciting, popular and dynamic contributor to the world economy. Although, in truth, poor pay, long hours, high turnover, insufficient training and low job security had always been associated with the hospitality environment - it’s just that these negatives were accepted as being an inevitable part of the exciting, expanding sector. Today, we are paying the price of these negatives which have resulted in a reputation often deemed as unattractive and unstable, alongside a debatable working culture.

As the industry has sped into post-pandemic recovery, many former hospitality employees have been reluctant to go back to their old jobs thanks to new opportunities found in better working contexts elsewhere. This trend is further fueled by today’s Gen Z young professionals who value a decent work-life balance, human-centric leadership, sustainable practices, and above all, a sense of purpose, belonging and growth, with no fear of job hopping until they find the environment that suits their needs.

And so we find ourselves in a post-Covid landscape, where attracting and retaining staff has become one of the most difficult aspects of running a hospitality business. A 2022 survey of over 300 hospitality students revealed that more than 50% of respondents considered that hospitality work is “not valued in our society.” Interestingly, many hospitality students are committed to studying the subject - but not necessarily to working in the domain. Changing this attitude needs our fullest attention.

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Why invest in employee learning and development plan?

Yes, some solutions can certainly be found in improving the way hospitality organizations are run, such as working hours, pay and conditions, but investing in a sound learning and development plan should be considered an equally important strategy for overcoming the current talent challenges and for bridging the post-Covid skills gap, but above all, for signaling a particular style of company culture.

In the past, employee L&D was carried out essentially to improve productivity, whereas today it should be seen as a means of attracting top talent, especially in industries where there are many reasons for staff to job switch. Instilling a culture of continuous learning signals to the employee that an organization is committed to nurturing their potential and investing in their future. It signals that the company culture and leadership styles are specifically employee-centric.

Hospitality education has always been based on a triangular relationship between industry, training and learners. In other words, industry informs the type of skills training which then prepares hospitality learners for entry into the sector. Today, hospitality stakeholders need to switch their mindset from passively informing the educational training to actively investing in it – since they are the ultimate beneficiaries of a motivated, engaged talent pool.

In August 2022, the World Travel & Tourism Council (WTTC) published strategic recommendations on how to make the industry more attractive and create more job satisfaction, which included “facilitating labor mobility and remote working, providing safety nets, upskilling and reskilling the workforce and retaining talent, and creating and promoting education and apprenticeships.”

As an example, CitizenM believes in hiring on personality, attitude and values that match the spirit of the organization. All the other requirements are taught and developed. « We are on the lookout for personalities with a positive attitude. We understand that everyone has different talents and needs -- depending on your stage of life and career. We give opportunities for you to learn and grow, both professionally and personally. »

Hilton devotes considerable resources to finding talent that matches the company values and offers growth opportunities, upskilling and skills’ portfolio expansion, along with recognitions, rewards and a transparent career development track. Recently voted no. 2 ‘best workplace in the world’ in the Gallup 2022 Guide to Employee Engagement for the second year running, it’s interesting – and rather saddening - to note that Hilton is the only hospitality company among the top 25.

 

How to develop efficient learning and development strategies

I’d like to see training as a constant feature that accompanies hospitality professionals throughout their working life, promoting the acquisition of 21st-century competencies ranging from communication, leadership, IT, service design to the all-important green skills. If on the one hand the pandemic has shown us the limits of traditional learning, on the other it has revealed the potential and enormous opportunities of educational technology, which is today a sector in massive expansion.

Implementing a learning and development strategy should take into account the following:

 

The future talent pipeline

  • Organizations should establish strategic skills mapping within jobs to have a clear idea of what competencies will be needed in the future. For example, in today’s hospitality landscape, it is imperative that training in sustainable practices and data-driven technologies is made a priority.

Use of technology

  • Technology will play a critical role in the future of learning in hospitality. Virtual reality, augmented reality and other digital tools can provide immersive and engaging learning experiences that complement traditional classroom-based training. Hospitality businesses investing in tech and offering access to various innovative resources will help foster a dynamic, modern environment for learning and upskilling.

Use of data

  • Personalized learning will be essential in the future of learning in hospitality. By leveraging data analytics and artificial intelligence, organizations can create customized learning paths for individual employees based on their learning styles, availability, preferences and job roles. 

Continuous training

  • Organizations should encourage employees to take ownership of their learning and development by providing them with opportunities to increase their know-how on the job at suitable times during their schedules. This could include participating in mentorship programs, attending conferences and industry events, and exploring their industry’s ecosystem. Emphasizing these participative opportunities at the hiring phase is key in helping to attract new talents.

Learning assessment

  • While the potential gain is significant, it’s important to ensure the money spent on continuous learning leads to real return. In order to consolidate stakeholder buy-in and employee satisfaction, training program outcomes need to be effectively assessed. This can be achieved by using data analytics and the creation of learning KPIs, surveys and dashboards for course assessment. Metrics should include not only people, productivity and profitability, but also the impact on the organizational culture.

 

Why building a talent pool is worth the investment

Although implementing a L&D plan requires upfront investment, employee training can save companies significantly in the long term with regards to job satisfaction and professional growth which lead to retention. According to Gallup, the cost of replacing an employee averages one-half to twice their annual salary, hence, investing in an employee’s development can help save significantly on turnover costs.

Revenue growth is also positively impacted in terms of increased productivity, efficacy and engagement. Organizational culture is defined by a commitment to employee learning and development, which in turn can help identify new growth opportunities, products, and lead to a company spirit of innovation and creativity. A hospitality L&D strategy invites the prospective employee, as well as the future leader, to fall in love with learning through doing – during their entire career lifespan.

Ultimately, quality service depends on quality employees with quality pay and development prospects. In the not too distant future, hospitality leaders will treat their employees with the same hospitality mindset that the staff treat the customer. Back to Will Guidara again, a great advocate for investing in the hospitality taskforce: “What is best for the employee is best for service” (from his book ‘Unreasonable Hospitality: The remarkable power of giving people more than they expect’).

Let's not forget that what is true for hospitality is applicable to all jobs. Investing in people and cultivating lifelong learning attitudes is a strategic effort that is needed on the part of all industry leaders to manage reskilling and upskilling in order to mitigate against job losses, talent shortages and to promote human-centric values.

«Human capital is a crucial asset of any business—in fact, in an age of ubiquitous technology, it is human skills, creativity and capability that will form the competitive edge for any organization. Financing and implementing a reskilling revolution must thus be viewed as a critical investment for business, workers and economies alike. » The World Economic Forum:‘Towards a reskilling revolution: Industry-led action for the future of work’.
Written by

EHL Group CEO

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Today I see the hospitality industry at an urgent crossroads of reinvention and paradigm shifts. Ensuring the respect, recognition, and hence the transversality of hospitality skills, requires a sea change in attitudes towards hospitality itself. Hence, shift no.1 begins with addressing hospitality’s organizational culture: making it more attractive, nurturing, agile, and more importantly, using company culture as a means of creating a competitive advantage.