Recruitment and Selection Process in the UK Hotel and Leisure Industry - Case Study Example

Employment Conditions Table of Contents Introduction 3 Review of Relevant Literatures 4 PESTEL Analysis of the UK Hotel and Leisure Industry 4 Recruitment and Selection Process in the UK Hotel and Leisure Industry 6 PESTEL Analysis of Hotel and Leisure Industry in South Africa 7 Recruitment and Selection Process in the Hotel and Leisure Industry of South Africa 10 Comparative Analysis on the Employment Conditions in UK and South Africa 11 Conclusion and Recommendation 17 References 19 Bibliography 23 Introduction Business expansion is regarded as one of the effective strategies of modern corporate organisations towards attaining their desired targets (Sekhar, 2009). Prior to the expansion of business process by any company, there lays the requirement of conducting a detailed market analysis, wherein the business will be enlarged (Kumar, 2012). With this concern, it can be apparently observed from the two well-established USA based company named Excelsia International Hotel and Leisure Group having no operational experience anywhere else apart from the USA, and is planning for a ten-year expansion in the UK and South Africa. Thus, there lays the requirement of gathering strategic information regarding various important aspects, which includes employment conditions, legislations and expectations within the hotel and leisure industry of these nations by the company in order to conduct varied functions efficiently (Hayes & Ninemeier, 2009). In relation to the previously mentioned context, an attempt has been made to discuss and analyse the external market environment of both the nations i.e. the UK and South Africa through PESTEL analysis and the recruitment and selection procedures prevalent in such nations. Apart from these, discussions have also been made regarding employment conditions, legislations and expectations prevailing within these nations in relation to hotel and leisure industry. Review of Relevant Literatures PESTEL Analysis of the UK Hotel and Leisure Industry Political Due to advent of globalisation, there lays the probability of the UK hotel and leisure industry to exit the EU. Economic In the UK, the probability of high inflation may affect the overall performance of the hotel and leisure industry operating in the nation. However, with the rising occupancy and RevPAR rate, the industry is developing in recent times. Source: (RBS, 2014) Social With the increased level of cultural differences and the lessening figure of populaces, the social conditions relevant to the UK hotel and leisure industry are identified to be changing with the shifting societal values and transforming family patterns. Source: (ONS, 2014) Technological Due to technological breakthroughs, the functionalities of hotel booking in the respective industry are advancing to maximum extent. Environmental The changing weather conditions and the adverse effects of natural disasters are imposing significant negative impact on the performance of the UK hotel and leisure industry in terms of GDP or capita. Source: (Everett & et. al., 2010) Legal Changing rules along with regulations relating to the UK hotel and leisure industry have witnessed to affect the global operations conducted by the hospitality organisations in different regions of the nation (Fiumana & et. al., 2015). Recruitment and Selection Process in the UK Hotel and Leisure Industry From the perspective of International Human Resource Management (IHRM), it is notable that several hospitality organisations are operating their respective businesses in several regions of the UK. This business operation is conducted by launching considerable level of recruitment campaigns, which correspondingly supports to the effective execution of the ideas of the employees leading to the growth of such organisations (Boella & Turner, 2013). It will be vital to mention in this regard that the UK based hospitality organisations are involved in launching such campaigns by making greater use of social media as well as internet medium. While discussing about the recruitment and selection procedure prevailing within the UK hotel and leisure industry, it is eminent that the stated industry is experiencing immense growth from the previous few years. Justifiably, in the years 2010 and 2011, such growth has been witnessed in building approximately 276 new hotels with the inclusion of 35,000 rooms. Thus, it is evident that the hospitality organisations operating in the UK intend to keep their respective recruitment and selection procedure to a simpler form. The reason behind such is in order to serve and meet the preferences or choices of their potential customers efficiently (Mok & et. al., 2013). PESTEL Analysis of Hotel and Leisure Industry in South Africa Political The presence of a stable political environment in South Africa and the efforts made by its government has contributed enhancing transport infrastructure. This eventually remarked the growth of hotel and leisure industry within the nation (BMI, 2015). Economic From the financial perspective, the hotel and leisure industry in South Africa has witnessed a remarkable growth due to massive changes in investment patterns and excessive advancements in making fixed investments (Roeloffze, 2014). Source: (WTTC, 2014) Social The people belonging to South Africa do not consider building and developing long -term personal relationships while performing a specific business. This is one of the reasons, which has potentially affected the business relating to hotel and leisure industry in the nation (Shah & et. al., 2013). Apart from this, the increasing unemployment rate is also one of the other reasons, which clearly depict the inability of hotel and leisure industry of the nation to get established successfully (Trading Economics, 2015). Source: (Trading Economics, 2015) Technological It is prominently notable that South Africa is not a leader in the field of IT and related to other technological field; rather it is regarded as an assembler, follower and adaptor towards the stated aspect (Shah & et. al., 2013). Environmental Similar to the UK, incessant changes in the weather or climatic conditions has considerably affected the overall performance of the hotel and leisure industry in South Africa (Shah & et. al., 2013). Legal The Contract Law prevailing within different regions of South Africa follow the guidelines of paying damages for compensation or any breach of contract (Shah & et. al., 2013). Apart from this, the housing prices in the nation are also witnessed to rise extensively. These might impose a greater level of threat to the hospitality and leisure businesses (Global Property Guide, 2015). Source: (Global Property Guide, 2015) Recruitment and Selection Process in the Hotel and Leisure Industry of South Africa The aspects concerning recruitment and selection are regarded as important constituents of talent management system within the regions covered under South Africa. This can be owing to the reason that considering the hotel and leisure industry as a service-centred, it is highly concerned to the need for performing an effective talent management procedure. Considering the results of macro environmental factor in terms of economic aspect with regard to hotel and leisure industry in the regions of South Africa, it must be mentioned that the hospitality business is booming in the nation. Thus, the hospitality organisations operating in South Africa are making deliberate efforts towards developing its respective talent management procedure by several ways. One of such ways entails recruiting and selecting such qualified personnel, who can serve the customers with their respective choices or preferences and likewise meet its demands as well. It is projected in this regard that the above stated practices with respect to IHRM may support the hospitality business of South Africa to develop rapidly through advancing the overall economy of the nation as per the desired level (Grobler & Diedericks, 2009; Rimmington & et. al., 2009). Comparative Analysis on the Employment Conditions in UK and South Africa The Excelsia International Hotel and Leisure Group is a well-established organisation in its origin country, i.e. the USA. In addition to this, the concerned hotel has no other running operational activities anywhere else. However, advancement as well as changes in the hotel industries has further influenced Excelsia International Hotel and Leisure Group to expand its business process in the UK and South Africa. This section aims to analyse factors associated with employment conditions in the UK as well as South Africa. A comparative analysis of the employment conditions enables identification of the overall contribution of the hotel as well as restaurant sector in the overall employment in the UK and South Africa. The hospitality sector in the UK is one of the most essential contributors to economic growth and development. The concerned sector also effectively contributes to the employment sector of the nation’s economy. However, the sector experiences increasing challenges with respect to different factors including economic, financial as well as other factors associated with the growth of the concerned economy. In the context of UK local authorities, the hospitality sector positively contributes to the economic growth of the nation (PricewaterhouseCoopers LLP, 2014). However, the hospitality sector has experienced slow growth in the year 2013 despite the fact has positively contributed to the growth of the concerned economy in the corresponding year. The increase in the employment was further marked by a growth of 2.7% in 2014. This in turn implies to the growth of employment in the UK hotel sector (Oxford Economics for the British Hospitality Association, 2010). Figure 1: Economic Contribution of UK Hospitality Sector Source: (Oxford Economics for the British Hospitality Association, 2010) The above presented table reveals the contribution of hospitality sector in growth and development of the UK. The above collected data also signifies the contribution of the hospitality sector in the overall tax revenue that includes different categories of tax factors, which further involves excise duty as well as other category of sale tax. The figure 2 presented below signifies the future contribution of hotel industry in the economic development of the nation. Form the figure 2, the trend associated with the hospitality economy has been classified under three categories including baseline, Cameron and midway. The baseline indicates the performance of hospitality sector with respect to rate of employment. In the context of hotel industries, several factors are likely influence its growth in the economy including the price competition, and the VAT rates associated with the accommodation facilities (Bell & Rose, 2012). Figure 2: Employment Contribution of Hospitality Sector Source: (Oxford Economics for the British Hospitality Association, 2010) From the above figure, it can be evaluated that if the past trends associated with hotel industries continues in future, then it is likely that the concerned sector would increase to 2.66 million jobs by the end of 2015. The rate of employment in the different sub-sectors of hotel industry signifies more employment in the restaurant and other allied activities (Oxford Economics for the British Hospitality Association, 2010). Figure 3 Employments in Hospitality Sub-Sectors Source: (Oxford Economics for the British Hospitality Association, 2010) In the context of UK economy, the hospitality sector contributes to the growth of employment that in turn positively influences the GPD growth. Figure 4 Hospitality and Whole Economy Employment Source: (Oxford Economics for the British Hospitality Association, 2010) In the context of employment condition in the UK, the above graphical representation suggests that the hospitality sector has contributed to the growth in the nation’s economy from 1998 to 2007. However, this growth has declined since 2008 during the period of recession that in turn signifies reduced estimated employment in the hospitality sector (Oxford Economics for the British Hospitality Association, 2010). It can be further analysed from the literature review section that despite the positive contribution of the hotel industry in employment, it is likely to have trouble in the UK market due to existence of several factors. These factors includes political, economic, social as well as legal and technological scenario of the nation. The rate of inflation is likely to affect the performance of the concerned hotel in UK. Additionally, the differences in cultural values and beliefs are another factor that can affect the growth and development of Excelsia hotel. The legal obligations of UK hotel sectors are another factor that can affect the expansion of Excelsia business in the nation. The hotel industry has also grown at faster rate in South Africa that in turn has positively influenced the growth and development of the economy. According to Labour Research Service (2012), the hospitality sector has contributed 7.6% to the employment in South Africa. The hotel service industry is an element of tourist industry, which is one of the main contributors of GDP in South Africa (Labour Research Service, 2012). Figure 5: Businesses by Sub Sectors Source: (Labour Research Service, 2012) It can be further evaluated from the above pie chart that the hospitality sector covers 67% of the total employment operations in UK. During the period of recession, the performance of the hotel industry in South Africa was negatively influenced, which resulted in declining revenue as well as profitability in the long-run (Labour Research Service, 2012). Figure 6 Hospitality Performance Source: (Labour Research Service, 2012) The above graphical representation signifies the performance of the hospitality sector from 2008 to 2012. It can be further analysed that the economic recession of 2008 has resulted decline in both average revenue as well as profitability. However, it is notable from the graphical representation that the profit and revenue margin of South African hotel industry has doubled in 2011 and 2012. Furthermore, the expansion of hotel industries has also increased competitions in the particular sector through the entry of new hotel organisations belonging to other nations (Labour Research Service, 2012). The expansion of Excelsia is likely to be beneficial in terms of profitability as well as overall revenue. The stable governance structure would have a positive impact on the growth and development of the new hotel in South Africa. In addition to this, it can be further analysed from the literature studies that differences in culture is one of the crucial aspect that is likely to affect the expansion of the concerned hotel business in South Africa (Labour Research Service, 2012). Conclusion and Recommendation From the above discussion, it can be concluded that in the modern business scenario the expansion of business is likely to be profitable, however the profitability is based upon political, economic, technological as well as legal factors. In this context, the paper analyses the case of Excelsia International Hotel and Leisure Group, which has the objective of expanding its business process in South Africa and the UK. In the context of expansion of business, the paper briefly discusses the factors associated with external business environment in the UK and South Africa. For this purpose, PESTEL analysis has been used to evaluate the external environment of the UK and South Africa. In addition to this, the recruitment and selection method likely to be followed by the concerned hotel, which has been further discussed in the paper that would be beneficial in terms of profitability as well as revenue in log run. Furthermore, the comparative analysis on the employment conditions in UK and South Africa briefly evaluates the employment condition with respect to the hospitality sector. It can be evaluated through the course of the study that the hotel industry positively contributes to the growth as well as economic development of both the UK and South Africa. In addition to this, from the comparative analysis it can be estimated that expansion of hotel industry in UK would be more profitable for the concerned hotel as compared to South Africa. In the context of expansion of business in different nations, it is recommended that the awareness with respect to cultural as well as legislation of the concerned nation is crucial, as it is likely to affect the growth of the hotel business in the long run. References BMI, 2015. Tourism. South Africa. [Online] Available at: http://www.bmiresearch.com/south-africa#tourism [Accessed June 06, 2015]. Boella, M. J. & Turner, S. G., 2013. The Hospitality Industry HRM Context. Human Resource Management in the Hospitality Industry, pp. 1-321. Bell, F. & Rose, J., 2012. UK Hospitality Industry. Overview of the Current State of the Sector. [Online] Available at: http://www.secrethotels.org/wp-content/uploads/2012/10/UK-Hospitality-Industry-Snapshot.pdf [Accessed June 06, 2015]. Everett, T. & et. al., 2010. Economic Growth and the Environment. Defra Evidence and Analysis Series, pp. 7-49. Fiumana, A. & et. al., 2015. A Critical Analysis of the Hotel Sector. Spotidoc. [Online] Available at: http://spotidoc.com/doc/384055/a-critical-analysis-of-the-hotel-sector [Accessed June 06, 2015]. Grobler, P. A. & Diedericks, H., 2009. Talent Management. Talent Management: An Empirical Study Of Selected South African Hotel Groups, pp. 1-27. Global Property Guide, 2015. South Africa’s House Prices Rising, Amidst Sluggish Economic Growth. South Africa. 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