Lack of skilled manpower has become a cliché of our times. From Tokyo to São Paulo, corporations are struggling to recruit. India’s hotel industry is no exception. But what’s striking about recruitment shortages in the hospitality industry is that they reflect a buoyant job market with multiple, rapidly-expanding sectors.
When recruiting, hoteliers in India face stiff competition, not just from rival hotels (who are not above poaching staff) but also from aviation companies, the banking sector and other client-facing industries. As international hotel chains form a beeline to set up shop in the country, hotels are likely to face perennial shortages of skilled manpower, high wages and staff retention issues – all damaging to profit margins.
“Once you have trained as hotel staff, restaurants, airlines, banks, retailers and other industries where you service a client on a regular basis get interested in you. Second reason is that pay scales in the hospitality industry have been lower than other industries, so people in the hospitality industry are looking at other industries such as the IT sector to get the same kind of remuneration as their peers,” said P R Srinivas, an analyst at Deloitte India.
The “great Indian hospitality” – a tourism department tagline – was built on the low cost of labour. Many hotel chains spend a lot of money on training staff for several years to meet customers’ high expectations, but then pay them low salaries at least for their first few years. Previously, the benefits of working in an air-conditioned hotel made up for low pay; but as tempting opportunities appear in other sectors, this is no longer necessarily the case.
Recruitment at entry level has become a problem, especially as starting salaries remain low. A chambermaid at a luxury hotel can expect to earn Rs13,000 to Rs15,000 a month, compared to the Rs20,000 a month she could get working in a call centre, says Ratan Marothia, president of the Federation of Hotel Industry Associations. “There is a shortage of staff – from bellboys to general managers,” said Marothia.
Staff-to-customer ratios tend to be higher than in many non-Asian markets, reflecting the preferences of Indian customers used to staff at home. That makes it hard for hotels to cut staff even as the cost of labour continues to rise in an industry where staff costs account for about 45% of all expenses.
“Given the competition, wages are bound to go up. There has been high inflation too and so you have to increase starting salaries,” Mohan Rao, director of human resources at Leela Hotels, a premium hotel chain. At more experienced levels too, staff retention is difficult. Trained bellboys are easily absorbed in an increasing number of luxury restaurants in the country, while general managers are in high demand at the human resources departments of private corporations.
“Out of a total of 36 students in my class (at the hospitality training school), currently only six remain in the hospitality industry, others are doing a variety of different things,” said Srinivas.
“I expect salaries for general managers of hotels to grow 50% in the coming year,” said Marothia. Hoteliers keen on attracting the best talent and retaining it have started to offer promotions, transfers and other opportunities. The Leela group, for example, now offers its staff an opportunity to progress onto its management trainee scheme after a few years in service.
But such opportunities remain few and far between. As the country adds another 70,000 rooms to its existing stock of 120,000 in the organised sector over the next two years, according to Deloitte, the competition for individuals able to provide high standards of customer service is bound to remain high.
