Global Talent Trends and Issues for the Travel & Tourism Sector - January 2015
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Final Report - January 2015 1
Global Talent Trends and Issues
for the Travel & Tourism Sector
January - 2015
2 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 3
Global Talent Trends and Issues
for the Travel & Tourism Sector
A report prepared by Oxford Economics for the World Travel & Tourism Council
4 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 5
Foreword 6
1 Introduction 8
2 Human capital issues in context 12
3 Talent demand-supply balance and
enabling environment analysis 26
4 Economic cost impact of talent
gaps and deficiencies 45
Annex A 51
Annex B 52
Annex C 60
Annex D 62
Contents
6 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 7
Foreword
The World Travel & Tourism Council (WTTC) is the global authority At a global level, the research shows that the industry is facing a
on the economic and social contribution of Travel & Tourism. shortfall of 14 million jobs – that is equivalent to the population of
It promotes sustainable growth for the sector, working with Cambodia – and stands to reduce its contribution to global GDP
governments and international institutions to create jobs, to drive by US$ 610 billion over the next ten years, 5.8% less than our
exports and to generate prosperity. baseline forecasts.
Members are the Chairs, Presidents and Chief Executives of the This research also shows that Travel & Tourism’s Human Capital
world’s leading, private sector Travel & Tourism businesses. These challenges are significantly higher than those faced in other
Members bring specialist knowledge to guide government policy sectors, with 37 out of 46 countries showing a talent ‘deficit’ or
and decision-making, raising awareness of the importance of the ‘shortage’ in Travel & Tourism over the next ten years, compared
sector as an economic generator of wealth. with only 6 out of 46 for the economy as a whole.
Over the next ten years, WTTC’s forecasts project that The situation is more pressing at the lower educational attainment
Travel & Tourism will contribute US$11 trillion (US$3.4 trillion levels, i.e. unskilled labour, and the impacts will hit in the next five
directly) and support 347 million jobs around the world (126 years. This is a problem which needs to be addressed now.
million directly – over 25 million more direct jobs than in 2013). The
growth in Travel & Tourism employment, at over 4% per year for WTTC urges the industry – both public and private sector – to act
the next ten years, will bring about enormous development across now to address the anticipated talent shortage. Travel & Tourism
the world. Our research shows however, that without the right has the power to create jobs across the economy - at different skills
policies in place now, some countries are likely to have large gaps levels, for often marginalised sectors of society such as young
that will make it difficult, if not impossible, for them to fulfil their people and women, and in areas where other opportunities are
growth potential. scarce. We are a people industry – we depend on quality people
to deliver a quality product – and we need the right policies,
WTTC is pleased to produce this report on Global Talent Trends programmes and partnerships in place to ensure that the workforce
and Issues for the Travel & Tourism Sector that for the first time, of the future knows about the opportunities in our sector, and has
quantifies the scale of the Travel & Tourism talent problem. It highlights the appropriate skills and knowledge to support future growth.
the economic impact that the HR challenge will have on the global
economy if not addressed soon. It looks at the scale of the problem In the years to come, progress in developing and retaining talent will
(‘the talent deficit’) in 46 countries and then assesses how well require a much stronger and more co-ordinated effort between the
placed these countries are (‘the enabling environment’) to address private sector, educational establishments and government. WTTC
the challenges they face. A combined ranking of the talent deficit and its Members will be at the forefront of this debate, discussion
and enabling environment highlights those countries where Travel & and action to ensure the continued strength of Travel & Tourism.
Tourism is most at risk from human capital issues over the next five to
ten years, and those which will likely be able to manage future growth.
David Scowsill
President & CEO
World Travel & Tourism Council
8 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 9
Introduction
The rapid pace and extent of change in global and national markets for talent will
be significant across the economy as a whole and specifically for Travel & Tourism.
The market for Travel & Tourism talent is already challenged with high staff turnover,
competition with other industry sectors for the best people, and in some cases,
adverse supply trends such as declining demographics. New regulations, new
technology (which in some cases is squeezing out existing roles and creating demand
for new roles), shifts in customer service preferences, changing visitor markets, as
well as other industry drivers, all have the potential to transform the type of skills that
employees in Travel & Tourism will need to possess in future and employers will need to
train staff in.
Planning for and meeting future talent demand in Travel & Tourism is going to require
companies and governments to implement and promote proactive and careful talent
supply management policies and together with education, develop stronger and more
coordinated talent efforts. A thriving Travel & Tourism sector will also require regular
monitoring and projecting of talent demand, supply and imbalances to predict in
advance any looming shortages.
Although there are many talent commonalities facing the Travel & Tourism globally,
the talent environment is far from uniform across countries for demand, supply and
imbalances, and the enabling talent environment. There is huge diversity across
Travel & Tourism is one of the world’s largest economic sectors. Current global countries in terms of the general development and maturity of Travel & Tourism and the
Travel & Tourism direct employment is over 100 million jobs (103 million jobs, 2014 stage they are at in the sector’s growth cycle. So an understanding of the talent picture
forecast estimate1). Global Travel & Tourism direct employment is forecast to grow for different countries is vital as a ‘one-size fits all’ analytical picture and policy response
at a faster pace (2.0% pa) than most other major industries and the global economy will be incorrect and ineffective. Understanding the sector’s outlook and issues will be
employment average2. This is a result of a number of factors including the ongoing crucial if Travel & Tourism is to realise its growth potential over the next decade.
structural transformation from industry to services in advanced and emerging
economies and the growth of the middle class globally resulting in changing consumer It is against this backdrop that WTTC commissioned Oxford Economics, one of the
patterns favourable to Travel & Tourism. In fact, many countries have even more world’s leading providers of global economic analysis, advice and models, to conduct this
aspirational growth targets than assumed in the WTTC baseline scenario which would research on 46 countries. The countries are geographically diverse, encompass all of the
require Travel & Tourism direct employment to grow even faster. For some of these world’s major economies and include countries such as Barbados, Morocco and Thailand
countries, given the analysis in this report, these aspirations will be very difficult to where Travel & Tourism is a particularly important sector. The 46 countries account for
realise given the projected talent trend deficits. 81% and 88% of direct world Travel & Tourism employment and GDP respectively.
3
In the long-run economy-wide growth projections are constrained by the economy’s long-run potential output, which depends, among other
1
Source: WTTC annual economic impact research, March 2014 factors, on the long-run labour supply. Although sector-level demand projections are less directly constrained by overall labour supply on the
2
Source: WTTC annual economic impact research, March 2014 general assumption that demand for labour will be met from within the wider economy labour pool.
10 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 11
1.1 Why talent matters: Negative impacts of
Travel & Tourism talent gaps and deficiencies
• The sector’s often transient labour can limit its ability to deliver a consistently high
quality visitor experience. High staff turnover directly leads to higher recruitment
and advertising costs, higher training costs, reduced returns to training and an
increased workload on existing staff.
The projections for Travel & Tourism direct employment from WTTC’s annual
economic impact research are based on top-down macroeconomic domestic Together Travel & Tourism talent gaps and deficiencies impact on costs,
and international demand projections, linked to Oxford Economics Global bottom-line profitability, competitiveness, service, quality, brand, investment and
Macroeconomic Model3 and Tourism Economics Tourism Decision Metrics Model. ultimately future growth.
These demand-orientated growth projections for Travel & Tourism employment,
however, implicitly depend on a sufficient volume, availability and quality of talent • All of the above impacts relate to negative imbalances where the supply of
supply, which can be retained within the sector. If this is not the case, countries will talent falls short of demand, directly affecting industry employers. But there are
struggle to realise these growth projections. negative consequences also where there is an excess supply of Travel & Tourism
talent, which affects more today and tomorrow’s future employees. These
Talent is increasingly seen as a key enabler for wider economic development, negative consequences include, among others, downward pressure on wage
facilitator of growth and source of competitiveness. In this way, talent is no different to levels and lack of employment and career progression opportunities. In the 1990s
other supply-side factors like land, capital, technology and infrastructure. However, and early 2000s, the global economy experienced a boom and bust in the IT
traditionally - as the literature review for this study has shown, with the exception of talent market. During the tech boom, talent was attracted to IT by the growing job
some countries - governments generally have not prioritised human resources and opportunities and financial remuneration on offer. The dot com crash led to heavy
training to the same extent, for example, as infrastructure. jobs losses and remuneration fell behind other sectors. Even as the IT industry
and talent demand market quickly recovered, the perception of the industry was
In practice and over the long-run, there is no guarantee that each country’s scarred and supply was slow to respond leading to global talent shortages which
Travel & Tourism demand for talent will be met by its domestic supply (and external are still prevalent today.
supply). Nor is it guaranteed that a country’s Travel & Tourism talent base will be
compatible with the level of competitiveness needed to compete internationally
and achieve the projected international demand growth.
‘ ‘
The impacts of Travel & Tourism talent imbalances and deficiencies are listed below.
These clearly demonstrate why talent issues are so important to the sector’s growth
sustainability and bottom-line. Labour and skills are a crucial Developing more tourism
component in the tourism infrastructure—hotels,
• Talent labour shortages, where many hard-to-fill vacancies go permanently
supply chain. Enhancing the resorts, transportation,
unfilled, lead to below-potential employment levels and growth in the near-term
quality of service is pivotal in tourist destinations, and other
and foregone investment and growth in the longer-term.
building a region’s reputation amenities—is not enough to
• Talent vacancies, which in many cases may only be met by raising pay both domestically and globally, meet the needs of this rapidly
levels substantially and attracting staff from other sectors, lead to higher and making it competitive in expanding industry in China.
company operating costs and reduced profits in the short-term, and eroded the international marketplace. It The government and private
competitiveness and weaker growth and investment in the longer-term. An ensures that once tourists visit enterprises must invest in tourism
alternative solution to filling these vacancies could be promotion of staff within the your destination, they will want to and hospitality education to fill
sector before they are ready to proficiently fill these roles. The impacts of this are return and bring others with them’ the critical gap in workers who
different but again tend to be negative. understand international best
Source: Australia Government 2012: Tackling
labour and skills issues in the tourism and practices. China has invested
• Talent skill gaps amongst existing employees, where positions are filled by hospitality industry: A guide to developing tourism billions of dollars in infrastructure,
under-qualified and under-experienced staff, lead to inferior customer service and employment plans
but now is the time to invest
quality standards, and create a host of other HR challenges.
in human resources and skills
• Talent gaps, where migrant labour has to substitute for a shortage of
development’
indigenous labour (in volume and quality terms), can affect the authenticity of Source: The Hospitality Talent Gap, China
a country’s Travel & Tourism offer and its long-term brand, competitiveness Business Review
and international image.
12 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 13
Human Capital Issues in Context Structural characteristics of the Travel & Tourism sector
Travel & Tourism is highly diverse in terms of its sub-sector mix, occupations and talent
requirements: sub-sectors range from hotels to air transport, while occupations range
from concierges to pilots.
A relatively high proportion of the Travel & Tourism workforce is employed in
elementary, low skilled occupations, e.g. cleaners, waitresses. The sector has a
below economy average proportion (at least in advanced economies) of its workforce
employed in higher skilled professional occupations.
The Travel & Tourism workforce is also younger and more female-orientated versus the
global economy average. In addition a high share of the workforce is part-time, casual
and seasonal. The sector is more likely to recruit foreign workers compared to the
economy average5.
Evidence from the survey of WTTC member companies supports the assertion that
Travel & Tourism is an important employer of young people. All but one of the member
companies had hired a school or university leaver to their first job in the past two years.
Nearly all companies offer some form of work experience or internship programmes, or
provide further education and training programmes in order to specifically attract young
people and retain them within their organisations.
2.1 Travel & Tourism talent supply
The supply of talent to Travel & Tourism is broad and comes from many sources given
the diversity of sectors, occupation roles and range of talent requirements.
Some employee skills are transferable across Travel & Tourism sub-sectors and from
other sectors in the economy. But some other talent requirements are more specific
and are supplied from more narrow and well-defined sources.
For certain sectors and roles, there are typically few skill barriers for people to enter Travel
& Tourism compared to other sectors. This is a ‘positive’ in the sense that people can work
in the sector with little prior experience or qualifications, and train ‘on the job’. They can
thus be recruited from a wide pool of labour. But this can also be a ‘negative’ in terms of its
impact on perceived career attractiveness and pathways6.
Academic articles and published reports have focused a great deal on human capital
issues, many of which have enormous implications and impact on The talent market, in general and for Travel & Tourism, is becoming increasingly global
Travel & Tourism companies and the future of the in sector as a whole. These issues with higher cross-border migration7.
include the structural characteristics of the Travel & Tourism sector; Travel & Tourism
talent supply; imbalances between Travel & Tourism talent demand and supply; why Looking to the future, the following megatrends will exert a significant influence on the
Travel & Tourism experiences talent challenges; Travel & Tourism talent projections; future supply of talent to Travel & Tourism, although to varying degrees by country:
and Travel & Tourism talent best practice policy examples, including case studies. declining youth demographics; retirement of the baby boom generation; rising female
labour market participation; a general shift towards a more highly skilled (in education
This chapter also integrates highlights from a survey of senior HR professionals attainment terms) labour supply as older, less skilled workers retire; and the potential for
from WTTC member companies4. The survey examined talent recruitment and some reverse migration back to fast growing emerging economies8.
development, aiming to understand the scale of current talent gaps and the particular
difficulties in recruiting quality staff.
5
UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-tourism
6
WTTC Human Capital Research: http://www.wttc.org/focus/research-for-action/policy-research/human-capital-research/
4
The 41 respondents to the survey represent the talent situation amongst companies from almost all
Travel & Tourism industries and cover 25 countries, as well as a collective view for Europe and the Gulf
7
The Hospitality Talent Gap, China Business Review: http://www.chinabusinessreview.com/the-hospitality-talent-gap/
Cooperation Council (GCC). The survey was administered by WTTC and designed in conjunction 8
The World Economic Forum, cited in The Hospitality Talent Gap, China Business Review: http://www.chinabusinessreview.com/the-hospitality-talent-
with Oxford Economics. gap/
14 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 15
2.2 Imbalances between Travel & Tourism talent
demand and supply
2.2.3 Economy-wide talent imbalances
• According to the ManpowerGroup talent shortage survey, covering 37,000
employers from 42 countries10, the top 10 jobs employers found difficulty
Talent imbalances in Travel & Tourism take many forms, covering both shortages and filling in 2014 across the whole economy were, in descending order: skilled
surpluses: trades and engineers (ranked 1 and 2 for three consecutive years), technicians,
sales representatives, accounting & finance staff, management/executives,
• Shortage or surplus of particular occupations, e.g. chefs, pilots sales managers, IT staff, office support staff and drivers. Although as this
represents talent shortages across the economy, this is by no means fully
• Shortage or surplus of job-specific skills, e.g. foreign languages, IT representative of talent shortages in Travel & Tourism, although all of these
roles are required by the Travel & Tourism sector.
• Shortage or surplus of certain soft skills, e.g. customer service, problem solving
2.2.4 Impacts of talent imbalances
2.2.1 Survey of WTTC member companies
Section 1.2 has already established a framework for analysing impacts of
Over half of the Travel & Tourism companies in the WTTC member survey described Travel & Tourism talent gaps and deficiencies. In general, evidence from literature
their experience of hiring staff as difficult, with the challenge greatest for higher skilled on the impact of Travel & Tourism talent imbalances is limited. This is partly because
and more professional roles. Alongside engineers, chefs and other technical roles, the aim of some of the reviewed reports is to identify current and potential future
other jobs that are particularly difficult to recruit for include accountants and food & imbalances with the hope of addressing these imbalances and avoiding negative
beverage managers. Nearly two-thirds of the companies also reported that recruiting impacts.
staff has become more difficult in the past two years. • Some evidence, however, exists for UK Travel & Tourism11 and from the survey of
WTTC member companies.
2.2.2 Lack of country-specific Travel & Tourism talent The main effects of talent shortages on Travel & Tourism businesses in
imbalance evidence the UK have been to increase the workload of other staff and to create
difficulties meeting customer service objectives. Skill shortages have also
A key finding from the literature review was the lack of countries actually caused significant numbers of tourism establishments to have difficulties
undertaking and publishing research on Travel & Tourism talent issues. This holds meeting quality standards. Increased operating costs, and losing business
also for those countries with the largest (in absolute and relative terms) and fastest or orders to competitors, were also commonly mentioned by tourism
growing Travel & Tourism industries, and for countries which this research predicts establishments as negative impacts of skill shortages.
will experience the greatest future talent ‘hotspots’ and ‘stretch points’.
According to the survey of WTTC member companies, the impact of the
It could be the case that in many countries, stakeholders, away from the ‘cold face’ difficulties of recruiting tends to manifest itself by creating a higher workload
of Travel & Tourism (e.g. from government and education), are not aware or made and engendering lower morale and less creativity among the existing
aware of talent challenges because of this lack of reported evidence. It is hoped workforce. The effects of internal skill gaps, where some staff are not fully
that this research may fill some of that gap in evidence and prompt these countries proficient in their roles, are similar. While none of the HR managers said that
to look more closely at Travel & Tourism talent issues and build on this research. they had yet had to withdraw products or services from the market due to a
lack of staff, one quarter admitted that a further impact of recruitment issues
• The limited evidence that exists from literature shows that: the UK has a higher is a difficulty in meeting quality standards. Recruitment difficulties can also
share of Travel & Tourism businesses and employees with skill gaps (21% and force companies into moving staff into new positions or over-promoting in
9%) compared to the economy average; in Australia, according to analysis by the order to fill gaps. This in turn can fuel other issues for HR teams and spur job
Australian Government, a very high share (half) of Travel & Tourism businesses turnover or bring about a lack of job proficiency among a proportion of the
faces recruitment, retention and skill shortages9; and in Rwanda technical skill workforce. Vacancies aside, having staff that are not proficient in their roles
gaps are reported to be as high as 25% of Travel & Tourism’s total employment in also impacts the morale and workloads of the rest of the employees and can
Rwanda and 50% of staff need language training in English, French and Chinese affect the quality of service levels provided to customers.
(languages aligned to visitor origin markets).
• At the broader economy-wide level, the ManpowerGroup talent shortage survey12
provides analysis of the impact of talent shortages. Over half of employers
experiencing a talent shortage say it has a medium to high impact on their ability
to meet client needs. Other impacts, in descending order of occurrence, include:
reduced competitiveness/productivity, increased employee turnover, reduced
innovation and creativity, lower employee morale and higher wage costs.
10
Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf
9
Australia Government 2012: Tackling labour and skills issues in the tourism and hospitality industry: A guide to developing tourism employment plans:
https://www.austrade.gov.au/Tourism/Policies/National-long-term-strategy/Working-groups/Labour-and-Skills Manpower Group - 2014 Talent
11
https://www.gov.uk/government/publications/tourism-sector-skills-insights
Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf 12
Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf
16 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 17
2.3 Why the Travel & Tourism sector experiences
talent gaps and deficiencies
Retention
• The Travel & Tourism sector faces talent problems from high staff turnover and
leakage of talent to other sectors20, which is often far in excess of the demand from
Travel & Tourism has some unique features that make it a challenging sector to recruit Travel & Tourism’s expansion21.
and retain talent and skills.
• In the UK, turnover ranges from 7.5% for self-catered accommodation to over a
Career attractiveness and pathways quarter for pubs, bars and nightclubs22.
• The seasonal nature of Travel & Tourism demand in many destinations means that • According to the survey of WTTC member companies, average annual staff
it is often difficult to offer year-round full-time employment which other sectors can turnover was 18%, ranging from a high of 36% to a low of 3%. Recruitment is thus
and do offer13. an on-going activity. Job roles in elementary occupations, sales and customer
services and those with skilled trades have the highest levels of turnover.
• The geographically remote location of some Travel & Tourism businesses can also
mean limited local talent supply. This can be exacerbated by other constraints • The WTTC member survey also concluded that companies have to place
such as lack of local housing and transport connecting tourism businesses to emphasis on creating structures and systems within their organisations to best
larger pools of labour14. retain their workforce. The survey also highlighted flexible recruitment and
retention practices as the new necessities of workforce planning.
• In some countries cultural and social issues make Travel & Tourism less attractive
than other sectors, and place a ‘glass ceiling’ on female employment participation15.
Uncompetitive pay
• Low barriers to enter the sector can have a drawback: namely the perception of
low skilled, low paid, menial transient jobs16. • Rather than facing an overall general lack of applicants for vacancies, WTTC
member countries reported that some applicants who apply to vacancies tend
• A lack of clear staff development pathways, unsociable working hours and low to want higher levels of pay than can be offered, or do not have the required skills
earnings potential (for some job roles) combine to create a poor recruitment image or experience required. In many cases also, applicants were said to lack the right
for the sector17. attitude or motivation to fit with the company. Trying to maintain competitiveness
through benchmarking the salaries of similar roles in competitor companies and
industries is becoming common place among WTTC member companies.
Competition
• Travel & Tourism often faces strong competition from other fast-growing sectors
Education supply
recruiting similar types of talent and often paying higher salaries18.
• In some countries there is a lack of provision of Travel & Tourism courses from
• Survey results of WTTC member companies show that for two-thirds of senior education institutions, often due to a lack of qualified tourism educators23.
HR managers, recruitment challenges over the next five years are expected to get
even more difficult as competition for talent is expected to further increase among • Where Travel & Tourism courses are offered, the curricula can be poorly designed
sectors and across geographies. The survey found that a strong employer brand and outdated. There often needs to be a greater balance between theory and
can both improve application rates for new employees and increase engagement practice, a change from a traditional teaching mode to a more modernized,
and retention among the current workforce. international, innovative, and interactive teaching mode, and in general greater
responsiveness to and alignment with the sector’s needs.
• A report by the Standing Committee for Economic and Commercial Cooperation
of the Organization of Islamic Cooperation (COMCEC) also identified the problem • Although growing, the number of Travel & Tourism apprenticeships and volume of
of ‘losing’ talent to other sectors and employers’ failure to attract qualified vocational provision in general typically falls short of demand.
personnel into the sector19.
13
British Columbia Labour Market Strategy: http://www.jtst.gov.bc.ca/skills_for_growth/
14
McKinsey Global Institute - Talent tensions ahead: A CEO briefing, Richard Dobbs, Susan Lund, and Anu Madgavkar: http://www.mckinsey.com/
insights/economic_studies/talent_tensions_ahead_a_ceo_briefing
15
http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourism.pdf
16
UK state of nation report 2013: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism
17
UK state of nation report 2013: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism
20
UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-
tourism
18
UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-
tourism
21
Anecdotal evidence suggests turnover in Chinese hotels is as high as 40%.
19
Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of
22
State of the Nation 2013 Hospitality and Tourism report: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism
Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014). 23
Rwanda Development Board – Rwanda Skill Survey 2012 – T&H Report: http://www.lmis.gov.rw/scripts/publication/reports/Tourism.pdf
18 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 19
Structural characteristics Economy-wide reasons for talent shortages
• Some occupations are heavily gender biased, e.g. housekeepers (female) versus • It is useful to compare the factors above, for why Travel & Tourism experiences
chefs (male). This limits potential talent supply if, for example, few males apply for talent gaps and deficiencies, with economy-wide reasons why employers
housekeeping positions24. have difficulty filling jobs. According to the ManpowerGroup talent shortage
survey29, the main reasons employers had difficulty filling jobs in 2014 include, in
descending order: lack of technical competence (hard skills), lack of applicants,
Travel & Tourism sector practice and training lack of experience, lack of workplace competence (soft skills), looking for more
pay than is offered, undesirable geographic destination, poor image of business
• Not all employers proactively pursue or have in place a strategy to address talent sector/occupation and lack of applicants willing to work in part-time/contingent
challenges. In some cases this is understandable given that many Travel & Tourism roles. It is clear that many of these reasons correlate closely with the factors
businesses are small and lack talent management capacity by not having an in- identified specifically for Travel & Tourism.
house human resources department.
•
•
Some firms under-invest in staff up-skilling, which is likely to be partly linked to the
transient nature and high turnover characteristics of the workforce.
In some countries, there is a lack of training to nurture middle managers and a lack
2.4 Travel & Tourism future talent projections
Replacement demand will form a major component of future Travel & Tourism job
openings. Replacement demand refers to the talent requirement to replace workforce
of relevant rotational opportunities with workplaces25. leavers (either temporarily or permanently) due to retirement, maternity leave and
joining other sectors amongst other reasons, and to backfill jobs vacated by an
• Young employees are more likely to engage with training which meets their existing, promoted worker.
personal as well as company needs and aspirations. So for young people,
purely functional, task-related training is valued less than more generic skills • Replacement demand is not unique to Travel & Tourism. All sectors in any dynamic
development26. economy with retirement and labour churn have a talent requirement relating to
replacement demand. The extent of replacement demand depends on a number
of factors including the age and gender structure of the workforce, staff turnover
Government policy and engagement and an industry’s relative appeal. Travel & Tourism’s younger than average age
structure should reduce replacement demand but its more female-orientated
• In economies with fast growing Travel & Tourism industries, more focus has often workforce and high staff turnover would increase it. It is difficult to compare
been placed on investing in physical infrastructure rather than talent27. replacement demand across sectors due to limited data availability and therefore
difficult to assess whether Travel & Tourism has a larger relative replacement
• Too few countries undertake either formal Travel & Tourism workforce planning demand talent requirement.
exercises or detailed talent studies.
• The balance between new roles and replacement demand will vary by country. In
• There is often a lack of industry-government-education engagement to discuss countries with more mature and slower growing Travel & Tourism industries, and
and resolve talent issues. older workforces, replacement demand will account for a higher share of vacancies.
• Some countries have very favourable immigration policies which support • In the UK, for example, replacement demand30 will be 4 times as large as
Travel & Tourism talent supply, for example Gulf countries, others do not28. expansion demand (the growth in the stock of sector jobs/new job roles)31.
• There will be a rising gradient of talent demand across Travel & Tourism – a slow
shift to more high skilled openings – but there will still be significant opportunities
and demand for people with low qualifications32.
• There will be a growing demand for managerial skills and customer service. Future
managers will need to have broader management and business competencies33.
24
UK state of nation report: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism 29
Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf
25
http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourismpdf 30
A breakdown of the different sources of this replacement demand is not available.
26
Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of 31
UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-
Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014). tourism
27
The Hospitality Talent Gap, China Business Review: http://www.chinabusinessreview.com/the-hospitality-talent-gap/ 32
UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-
28
Canadian Tourism Research Institute – The Future of Canada’s Tourism Sector tourism
http://cthrc.ca/~/media/Files/CTHRC/Home/research_publications/labour_market_information/Supply_Demand/SupplyDemand_Report_Current_
33
http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourism.pdf
EN.ashx and British Columbia Labour Market Strategy: http://www.jtst.gov.bc.ca/skills_for_growth/20 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 21
• In some countries, especially those where Travel & Tourism is rapidly growing from Work models: Increasing the focus on improving the talent pipeline,
a relatively immature base, even where talent supply is increasing, the volume of redesigning work procedures, offering more flexible work arrangements
talent supply with specific industry qualifications is only a fraction of the volume of and providing virtual work options.
future Travel & Tourism talent demand.
• The ManpowerGroup talent shortage survey report also outlines the evolving role
• Looking ahead, future talent trends and demand vary globally in the sector. For of HR practitioners. They are now expected to be experts in supply and demand,
example34, in Canada talent shortages in Travel & Tourism are projected to increase marketers (since talent is now also a savvy and sophisticated consumer) and
substantially as the baby‐boom generation retires. Although immigration and higher designers (thinking differently how to structure work to access, mobilise, optimise
labour market participation by women will partially offset the departure of baby and unleash the potential of current and prospective employees).
boomers, these two factors are not expected to be enough. The projected talent
shortfall is equivalent to 10% of total employment, with shortages most severe for • Countries where the environment is conducive to growth in Travel & Tourism
food and beverage services35. In Hainan, China, a huge talent shortage is projected human resources have:
given the predicted tripling in demand in a short period of time36 while in Asia there is
predicted to be an 8 million talent shortage by 2021 in Travel & Tourism37. The supply
of hotel managers is expected to meet less than half of potential demand.
2.5 Travel & Tourism talent best practice policy
This sub-section first highlights examples of general economy-wide and • A strong customer service base
Travel & Tourism specific talent best practice from literature. This is followed by four
case study examples: Singapore, Australia, Canada and Egypt. • A youthful workforce
2.5.1 Economy-wide talent best practice • A flexible labour market
• Positive perceptions of T&T jobs
The ManpowerGroup talent shortage survey38 report provides evidence on how
employers are bridging their talent gaps. It describes how HR managers need to focus • An open policy to hiring foreign, high quality labour
on three areas - people practices, talent sources and work models – but presently
employers are twice as likely to focus on people practices compared to both talent • Prioritised Travel & Tourism
sources and work models.
• Less competition for jobs from other sectors such as retail
• Strategies employers are pursuing to overcome talent shortages in each of these
three areas include, among others: • Spare labour market capacity and female participation
People practices: Providing additional training and development to • High quality company training of employees
existing staff, utilising non-traditional or previously untried recruitment
practices, redefining qualifying criteria to include individual who
lack required skills but have the potential to acquire them, increasing
starting salaries and providing clear career development opportunities
during recruitment.
Talent sources: Adapting talent sourcing to recruit more untapped
talent pools, recruiting candidates outside the local region and country,
partnering with educational institutions to create curricula aligned to talent
needs and considering new locations to operate from where a larger and
higher quality pool of talent exists.
34
Note these examples are determined by the availability of literature evidence. As said above, a key finding from the literature review was the lack of
countries undertaking and publishing research on Travel & Tourism talent issues, including producing projections.
35
Canadian Tourism Research Institute – The Future of Canada’s Tourism Sector: http://cthrc.ca/~/media/Files/CTHRC/Home/research_publications/
labour_market_information/Supply_Demand/SupplyDemand_Report_Current_EN.ashx
36
http://www.whatsonsanya.com/news-18722.html
37
2012 Study by the Singapore Tourism Board (STB) and The Boston Consulting Group
38
Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf22 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 23
2.5.2 General Travel & Tourism talent best practice 2.5.3 Singapore case study
Literature findings on general Travel & Tourism talent best practice can be grouped • For Singapore only, its case study evidence covers both economy-wide and
under three headings: industry, education and government. Travel & Tourism talent best practice. Singapore generally is a regarded as an
exemplar for its talent policies.
Economy-wide talent best practice
• Singapore produces a Strategic and Skills-in-Demand List. This is a compilation
of occupations that are key to supporting the growth of key economic sectors in
Singapore. This also lists the skill-sets that are expected to be in strong demand
by industries in the coming years. Job-seekers refer to this list to help them in their
career planning.
INDUSTRY EDUCATION GOVERNMENT • In addition to the Skills-in-Demand List, the Manpower Resources Guide is an
initiative by the Ministry of Manpower, in collaboration with several government
agencies and education institutions, to highlight the sources of local manpower
Mainstream and prioritise talent Provide a sufficient volume and Undertake forward-looking from which companies can tap to meet their immediate and near-term manpower
management as a central corporate quality of Travel & Tourism-related workforce planning and industry needs. The guide outlines the specific skill sets in which Singapore’s new labour
objective and have in place a talent vocational training and accredited talent research, including for supply will be trained, as well as the salary ranges of occupations. This helps
strategy39 apprenticeships example, research to understand employers to find and attract the right talent for their needs. Included in the guide
investment required to address skills is a special feature on other viable sources of manpower (e.g. older workers and
Explore alternate talent sources Have in place a sufficient number gaps41 return-to-work women), which is especially important in a tight labour market such
outside of firms and the of Travel & Tourism educators so as Singapore’s. The guide also provides contact information for each manpower
Travel & Tourism sector that this does not act as a supply Have in place a Travel & Tourism resource to help employers recruit directly from specific sources.
constraint talent strategy at all education levels
Create partnerships to share part‐ including lifelong learning • Both of the above examples clearly contribute to high quality, up-to-date and
time or seasonal workers between Have a modern Travel & Tourism transparent labour market intelligence which go a long way to eliminating
businesses in Travel & Tourism and/ course curricula, and standardise Engage regularly with industry and information asymmetries for employers, employees and students.
or other sectors and certify Travel & Tourism other stakeholders
qualifications Travel & Tourism talent best practice42
Offer different work options to suit Put in place supportive and
different workers (e.g. to females, Engage with industry and appropriate immigration policies • The Singapore Government has invested heavily in Travel & Tourism’s manpower
older workers etc)40 governments to teach the right skills linked to the most acute industry and capabilities. This funding has represented a sizable share of total Government
for future employability occupation talent shortages spending on developing the industry, highlighting the recognition given to talent
Provide clear career guidance and its importance to the sector. The goals of the funding included: ramping up
information and communicate advanced specialist training in new niche tourism areas where gaps existed,
effectively with future talent pools staying ahead of regional competitors, and increasing accessibility to new
education opportunities with the help of scholarships.
Offer clear career pathways to
young workers to promote • Singapore has previously developed a Tourism Talent Plan in collaboration with
Travel & Tourism as a viable and its Workforce Development Agency. The plan aimed to prepare the workforce to
rewarding career option meet a projected spike in manpower demand, driven by new tourism investments,
including two integrated resorts, and new events. The holistic three-pronged
Offer more apprenticeships approach comprised continuing education and training for adult workers, pre-
employment training for students, and industry development to attract more
Greater corporate input to workers to join Travel & Tourism. To enlarge the pool of workers with service skills
Travel & Tourism education and for tourism jobs, the Workforce Development Agency developed the
training design and teaching Certified Service Professional program (CSP), which extends portable skills
training in service excellence to workers who want to join the tourism sector.
39
The survey of WTTC member companies showed that the majority of companies have talent strategies in place for both the immediate future and in
the short term (2-5 years). However, this share drops to less than one-third for those that have a strategy with a longer term view.
40
According to the survey, WTTC member companies offer a vast array of benefits to many of its employees, including, among others: bonuses that
are based on the overall performance of the company: 94%; private healthcare: 78%; individual performance-related pay: 72%; share options for
employees: 53%; and subsidised childcare: 19%. 42
Navigating the next phase of Asia’s tourism: http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-
41
European Commission 2012, “Rethinking Education: Investing in Skills for Better Socioeconomic Outcomes” the-next-wave-in-Asia%27-Tourism.pdf24 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 25
2.5.4 Australia case study43 • However, despite large-scale investment from the Government, domestic private
sector and FDI, Egypt’s international tourism competitiveness is being jeopardized
• A National Workforce Development Fund was set up by Service Skills Australia to by poor service levels. Indeed this is confirmed later in the report by Egypt’s poor
help individual enterprises and industry sectors expand their workforce capacity ranking for its Travel & Tourism enabling environment which is a more serious issue
by providing employers and workers with the opportunity to enhance their skills for the country than the sector’s demand-supply balance projections.
through formal training. The fund, supported by the Australian Government as
well as the private sector, also helps to recruit and retain quality staff in the service • To address this, efforts are being made to improve the skills of personnel
industries. The backing from the Australian Government was considered to give employed in the tourism sector.
the scheme credibility and status.
• The Ministry of Tourism, through the Egyptian Tourism Federation46, aims to
• By developing managerial skills as part of formal training, employees receiving the promote increased professionalism in management within the hotel and tourism
training started to view roles within the Travel & Tourism industry as a more viable industry. It acknowledges the need to invest in human resources through continual
long-term career path. With education and labour organisations involved in the investment in academic and occupational skills.
fund, participants were given the option of a range of training and development
opportunities including accredited courses, traineeships, apprenticeships, • Training is demand-driven and takes account of market-needs and the education
workshops, short courses, non-accredited training and blended learning. system together. It primarily focuses on capacity building of senior managers and
creating a competitive and sustainable tourism product.
• As a result of the National Workforce Development Fund, Service Skills Australia
recognised better outcomes for both employees and employers within • Employees benefit from industry-relevant skills upgrades, while organisations benefit
Travel & Tourism. Overall skills were improved and staff turnover was reduced. from a stream of qualified staff to meet current and future needs within the industry.
2.5.5 Canada case study44
• The effective partnership between involved stakeholders - the Government,
industry and the education system - is indicative of the importance placed on
Egypt’s Travel & Tourism potential. The multi-strand partnership has ensured
• The overall goal of the Canadian Tourism Human Resource Council (CTHRC) is consistent interest and focus on human resources and talent enhancement.
to improve the quality and competitiveness of the Canadian tourism labour force.
Primarily, the CTHRC assists businesses with HR planning and training, as well as
offering consultancy services in the development of occupational standards, skill
2.5.7 Lao National Institute for Tourism and Hospitality
standards, training, assessment, certification and administration. case study
• The CTHRC aims to reduce the impact of poorly trained employees on • Located in Vientiane, the Lao National Institute of Tourism and Hospitality’s (LANITH)
customer service, revenue, job satisfaction and morale, benefitting both mission is to be the country’s most valuable tourism education resource. It has
employees and employers. established a national tourism curriculum, using forward-thinking teaching methods,
and provides international-level training facilities, resources and equipment47.
• Direct backing from the Canadian Government, which funds all development
and updates of standards, training and certification programmes, has brought • LANITH was set up in 2008 to maximise service and product capacity in
recognition to the importance of standards within Travel & Tourism. The Travel & Tourism. It was developed with the support of Luxembourg Development
programme and programme standards are further validated by their inclusion in and formally accredited by the Laos Ministry of Education and Sports in 2013.
public and private education systems.
• LANITH provides training aimed at both school leavers and tourism professionals.
• Overall, the funding programme has proved successful, providing suitable New students take a two-year Diploma in Tourism and Hospitality while the Passport
training resources to support all levels of training in Travel & Tourism at both a to Success training program is available to employees already working in the sector.
local and regional level.
• Passport to Success started in 2011 and is now the biggest industry training
2.5.6 Egypt case study
program in Laos, offering short vocational courses in areas such as customer
service, kitchen management and food production. To date, almost 1,000
hospitality and tourism staff have studied subjects such as customer service, food
• According to COMCEC45, tourism in Egypt is set to grow in the next decade and and beverage operations, management and communications.
will have a significant role in the sustainability of the country’s culture, economy,
environment and state security. • LANITH were winners of the 2014 WTTC Tourism for Tomorrow People award. The
institute was recognised for developing tourism intelligently and sustainably, while
also ensuring that its Lao citizens benefit from growth of the sector.
43
Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of
Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014).
44
Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of
Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014).
45
Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of
46
www.etf.org.eg
Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014). 47
Pacific Asia Travel Association: http://www.pata.org/Members/646126 Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 2015 27
Talent demand-supply balance & 3.1 Talent demand-supply balance projection
analysis
enabling environment analysis Quantifying the future Travel & Tourism talent demand and supply imbalance patterns
and trends is needed not only to identify how future talent needs for Travel & Tourism
may differ from the economy as a whole, but also to look specifically at where
The research uses two methodological approaches to assess the geographical stretch points might be, when (e.g. in short, medium and/or long term) and
country-by-country Travel & Tourism talent demand, supply and imbalances and the at what level of educational attainment (university, high school and below high school).
talent enabling environment in each country. This chapter summarises the results
of the talent analysis. Results are presented first for each of the two methodology 3.1.1 Travel & Tourism talent demand and supply projections:
approaches, followed by the combined composite rank analysis. See Annex B for full
methodological details. Long-run (2014-2024) top and bottom 5 growth
The top 5 and bottom 5 countries for Travel & Tourism talent demand and supply
growth in the long-run to 2024 are presented in Table 3.1 below.
The top 5 rankings for both Travel & Tourism talent demand and supply future growth
are dominated by emerging economies in the Middle East and South East Asia, as well
as Costa Rica (demand) and Turkey (demand and supply).
The bottom 5 rankings are dominated by ageing European and North East Asian
countries, plus Australia (demand) and Russia (supply).
Table 3.1: Top and bottom 5 countries for Travel & Tourism
talent demand and supply growth (2014-2024)
Top & Bottom 5 countries for Travel & Tourism talent demand and supply growth
(Long-run, 2014-2024)
DEMAND RANK SUPPLY
THAILAND 1 1 SAUDI ARABIA
TURKEY 2 2 BAHRAIN
SAUDI ARABIA 3 3 OMAN
OMAN 4 4 TURKEY
COSTA RICA 5 5 PHILIPPINES
SOUTH KOREA 42 42 AUSTRIA
AUSTRALIA 43 43 CZECH REPUBLIC
JAPAN 44 44 SOUTH KOREA
GERMANY 45 45 JAPAN
Caveat: This research is a first step to building a rich and comparable global evidence base on Travel & Tourism talent demand, supply and imbalances, NORWAY 46 46 RUSSIA
and the current talent enabling environment. But in order to deepen and broaden global Travel & Tourism talent analysis, and improve the robustness
of the analysis, other research stages could be undertaken, notably a bespoke industry survey with a much larger sample than achieved by the survey
of WTTC member companies, and in-depth consultations with a range of stakeholders. This should be borne in mind when viewing and drawing
conclusions from the results of this chapter. Source: Oxford Economics, WTTCYou can also read
