How do HR balance people cost with people development?
This recent trend of balancing people cost with people development in human resource management is one area, which is rising and progressing very fast. The practice of building people is not done in occasional workshops or classes; it is done continuously and intentionally.
In the hospitality industry, the cost of labor is an eminent issue; typically representing between 20-25% of overall costs, in an industry that operates on notoriously narrow margins. It is critical to know how accurate training can improve the way employees serve the business and guests. Corporate training programs that are managed locally benefit from great visibility on what is really happening in locations, and how those activities can be more proficiently executed. An ideal scenario to maintain an equilibrium of people cost with people development is to, identify the target group in each department and the necessary training needed for them and accordingly analyze the budgets to allocate to them. Industry experts believe 10% of salary cost of the entire department can be considered towards what a firm shall spend on people development of that respective department. However, whether it is a need of the hour totally varies from MNC’s to SME’s.
As the world is still coming to terms with the COVID-19 pandemic, the travel & tourism sector across the globe is the worst hit casualty of this deadly virus. It is believed even after the outbreak is over that the industry could take up to 10 months to recover. The report predicts the second quarter of the year to be the worst hit. Hotels will be unable to drive rates and may even seek to attract business at deep discounts. Organizations are enforcing pay cuts on employees based on the hierarchy; top level employees take more than 25% plus cuts & lower level 20% or below. Some firms are also offering Revenue Target model, wherein employees will be reimbursed if the firm is able to achieve certain forthcoming revised quarterly targets these pay cuts.
To weather this storm and emerge strong and ready to reopen, it's important for the HR’s of hotel companies & operators to engage effectively with active and furloughed hotel workers in real time - including those who are normally on the front lines and don't have a formal company email address or even a home computer.
However, the silver lining to such desolation is that chances are it could invigorate the domestic economy for the nation as the public will be on the back foot to take international flights even months after the disappearance of this pandemic and rather prefer quick weekend getaways easily accessible by their private cars.
“If given the truth, people can be depended upon to meet any national crisis. The great point is to bring them the real facts.” - Abraham Lincoln