Unpicking the productivity puzzle

Productivity Freeway Exit Sign

Recent figures from the Office of National Statistics (ONS) show that the UK’s productivity levels have dropped back to pre-financial crisis levels and continues to lag behind other major economies such as the US, France and Germany.  But like all such measurements, these figures hide wide variations across sectors.

Because it has a high ratio of staff to output, hospitality and tourism is one of the least productive sectors in the UK, – so much so that low productivity and high labour turnover have historically been seen by employers as facts of life.  But as we found when we interviewed senior HR executives from 40 large employers across the UK hospitality and tourism sector for our recent report, The performance and talent management revolution: Driving productivity in hospitality & tourism, this attitude is changing.

Why? Because a ‘perfect storm’ of rising costs, increasing recruitment difficulties and changing employee attitudes now leaves employers with no choice but to boost efficiency in order to offset costs whilst at the same time maximising customer experience and profitability.

So what steps are they taking and what advice can be shared with employers from other sectors? Here are four key take-aways for improved productivity.

Management skills are an essential investment

Poor management is a key reason for low productivity and many hospitality employers are candid about the direct correlation between management effectiveness and their bottom line. Some of the employers we spoke to acknowledged that there had been cases where managers have been promoted without the necessary skills and support for them to motivate and manage high performance teams.

It’s also important to be able to retain management talent. One HR director told us that “In the hotels where we have a more stable management team and lower people turnover, we are achieving higher customer experience or higher net promoter scores. In hotels where that isn’t the case we tend to suffer more in that respect.”

The lesson here is that those newly appointed into a management position need the right support to develop their skills as a manager, either before or as they enter the role, rather than waiting until the next cycle of training takes place. This is not always easy to achieve, but makes a significant difference in their effectiveness to manage, motivate and retain staff.

A focus on retention is critical

It’s seems obvious that if staff don’t stay for long, they won’t become fully competent. And if they aren’t fully competent, then they cannot become fully productive. So even if you invest in learning and development, this won’t pay off if a significant proportion of your employees don’t stay long enough to become fully skilled.

The first step towards tackling retention problems is to recruit staff who are more likely to stay with the business. Hiring staff who are qualified, who understand the opportunity and want to stay with the business was a re-occurring theme for the HRDs we interviewed.

As one HRD explained, “A lot of the work we’re doing around talent and career paths and succession planning is around making sure that people don’t need to leave us to go and have a career, because one of the special things about us is there are so many different jobs here.”

Take advantage of technology

Metrics are playing an increasingly important part in efforts to boost productivity, providing greater insights into the types of people employed, the reasons why staff leave and the reasons they stay. Whilst technology isn’t an end in itself, it can provide a useful tool.

While many other sectors have become more productive by replacing staff with technology, technology is unlikely to replace the need for hospitality staff in such large numbers. Instead, it is changing the way they work. The lesson here is that using technology to re-think the customer journey can also help staff to do their jobs more effectively as well as helping to monitor performance.

HRDs we spoke to are using technology to help improve productivity in areas such a stock control, staff scheduling, absence management and staff monitoring, hand held kitchen ordering devices, new payment systems and hand held checklists for room attendants.

Think laterally about recruitment

A growing number of employers are targeting staff from other sectors in order to attract staff with the same interpersonal skills that they are seeking to optimise productivity. Some are also targeting older workers and women returners. As businesses are increasingly focusing on recruiting to retain, they are also reviewing the packages and contracts they offer to appeal to different target audiences. For some this means moving away from solely offering zero-hour contracts and instead offering a choice to suit the individual.

A theme that also emerged strongly from our research – and one that will resonate with employers across every sector – is that younger staff are motivated by different factors and need to be engaged and managed differently when compared to previous generations.

“They come to work for different reasons. They expect to be treated differently than our industry did 5, 10 years ago. …” one employer told us. So make a point of reviewing how younger members of staff are remunerated and rewarded. If you want them to be as motivated and productive as possible, it may be necessary to change how you engage with them.

About Martin-Christian Kent

Martin-Christian Kent is executive director at performance and talent management expert, People 1st. People 1st provide tailored solutions and advice that help employers to grow performance and talent, drive customer excellence and maximise the value of apprenticeships.

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