Thoughts on the IHIF 2017 – Talking Talent Profiling, Brexit and Labour Shortage

Reprinted with permission of 4Hoteliers.com

Joseph Fischer, CEO of Vision Hospitality & Travel and a regular contributor to media outlet 4Hoteliers, sat down with Aethos™ Managing Director Thomas Mielke at this year’s IHIF conference to talk about talent profiling, Brexit and labour shortage. Fischer sought insights on wide-ranging topics. The interview tackles bigger leadership questions, such as whether or not it is an advantage or disadvantage for hospitality CEOs to come from within the industry, whilst also trying to define the profile of future hospitality “super stars”.

The lodging and hospitality industry is facing tectonic changes, including sharing economy, blurring boarders between hotels and the ‘disrupters.’ Do you see that major changes will be needed in the skills sets required by new lodging managers?
A lot of the new concepts, such as Moxy, have streamlined operations and increasingly rely on centralised functions. As operating models of brands have evolved, so have the requirements for the next generation of leaders. The days of the ‘traditional’ career path could very well be over. To progress, it is no longer necessary for individuals to prove themselves in managerial functions across all the different departments. Instead, GMs at these new concepts are progressively being recruited based on personality and character traits. Culture creation has become as important as being able to write a business plan. Employers therefore have started to place greater emphasis on the social skills and emotional intelligence of their future leaders. The idea being that one can easily acquire and learn the ‘science’ (i.e., business skills), but teaching someone the ‘arts’ behind a people-driven business is more difficult.

Simultaneously, there appears to be a greater need to find people who are autonomous ‘entrepreneurs’ – they have to be able to adjust to different environments and work outside a set framework of reference. These should be individuals who can ask the right questions but do not have to be experts in all areas. Interestingly enough, this is also – to some extend – reflected at the very top of the organisational chart. Aethos™ recently reviewed the competency profile of hospitality leaders. The results showed that CEOs exhibit exceptional balance and proficiency across a range of competencies (rather than being experts in one facet). They display particular strength in having vision and perspective; they are charismatic and can get people behind a common vision. This is supported by above-average scores in ‘emotional intelligence.’ Innate inquisitiveness is hereby part of their most critical business skills, and they also display an entrepreneurial, hands-on attitude – one can expect these leaders to be ‘servant leaders’ rather than dictatorial.

Some of the CEOs and leaders of big lodging brands today are not professional hoteliers. In your view, is this a disadvantage or an advantage to the groups they are leading?
Leadership needs to understand the basic principles of the underlying business; this is true for any sector. But, does this mean that, to be a successful leader, you will need to have grown up throughout the ranks within the same business vertical? I do not think so – and research supports this point of view.

On the one hand, working your way up within the same industry across a number of different functions and positions can clearly add value and credibility to any aspiring business leader. Those CEOs will be intricately familiar with the nuances and pressure points of the business, and they will probably be able to relate more easily to staff. Aethos™ has been tracking the CEOs of the world’s 50 largest hotel companies for more than a decade. Last year included numerous prominent examples of CEOs who could be considered, in the traditional sense, ‘seasoned hoteliers’ – such as Frank Fiskers at Scandic, Greg Dogan at Shangri-La and David Kong at Best Western International.

On the other hand, an industry outsider can offer a different perspective – challenging group thinking, fostering fresh thinking and driving innovation. Synergies can come from similar business dynamics and overlaps regarding the importance of customer service or comparable growth models (via franchising, acquisition, etc.). Examples of CEOs who do not fit within the box of a traditional hotelier include Alison Brittain at Whitbread (from Lloyds Banking Group), Mark Frissora at Caesars Entertainment (from Hertz) and James Donald at Extended Stay Hotels (from the retail sector).

It should not matter from where the CEO comes – it should be about what this person can bring to the table. At times, industry knowledge is a must to be successful in managing the ongoing affairs of a company. Other times, a unique skill set or experience acquired elsewhere can help in managing a turnaround scenario. The bigger question, in my view, should consider the overall setup of the company’s management team and board of directors. If everyone, bar the CEO, comes from within the hospitality industry, why should it matter whether the CEO him/herself has industry-specific knowledge? On the flipside, if the great majority of the company’s directors lack the experience or know-how in the hospitality industry, then surely having someone on board who knows the business inside-out is beneficial.

Who are the future lodging ‘stars’? In the ‘old days,’ future leaders in the global lodging industry came from F&B, Rooms Divisions, Sales & Marketing and Finances. From which areas in the hotel scene will the future leaders come, in your opinion?
In my view, it will increasingly be less about the professional background or ‘proven track record’ in a certain function. Instead, employers are focusing more and more on the personal character traits of their talent. As said before, you can teach professional skills and learn factual knowledge, but how you get things done (i.e., your task orientation) as well as the way you interact with individuals (i.e., your ‘soft skills’) and your cognitive abilities are much more ingrained into an employees’ ‘DNA.’ These attributes are therefore much better predictors of performance.

A formal hotel school/university education was a precondition for a successful lodging career. Is this type of education a prerequisite for a successful career nowadays?
I attended a hotel management school but chose not to pursue what would be considered as the ‘traditional’ career path. My studies not only taught me the fundamentals of the hospitality industry, but they also taught me general business skills, how to act and engage with individuals and how to get things done within an international, culturally diverse group of individuals. It was what some might consider a ‘school of life.’ Many other educational institutions within hospitality are pursuing a similar path; they have come to recognise that vocational, task- and industry-specific skills are valuable but not the be-all, end-all. In a way, the hospitality industry needs all-rounders and generalist business leaders. The fact that we see more and more business leaders coming from other industry sectors is a testament to that. One of the reasons, though, for which hotel schools have been so very successful in helping their alumni progress in their careers is the fact that they are experience-led institutions. Although packed with business theory and general management courses, they are also teaching applied knowledge. It seems that the industry, in fact many employers also outside the hospitality sector, are valuing this very hands-on approach.

As tourism and lodging grow to become the world’s largest employer, have you witnessed a shortage in skilled workforce?
Labour has been, and probably always will be, a hot topic for the hospitality industry. Yet, I hesitate to generalise. Overall, it is true that in certain geographies (such as the UK, for example), the industry does not have the best image and/or reputation for being an employer of choice. It is thus not able to attract the talent it needs to fill all functions and positions. This is specifically true for entry-level and mid-management positions. However, in other geographies (such as Germany, for example), the opposite is true, and a career in hospitality is something on the radar of the next generation of leaders. To nurture and grow talent, it is therefore important for the industry to work hand-in-hand with local governments, for example, as well as the educational sector and other institutions to change this perception. Many people immediately think of hospitality jobs as being subject to long working hours and poor pay; yet, this is a very poor generalisation. The hospitality industry is multifaceted and offers an infinite number of opportunities and career paths. You might say that there is a ‘lid for every pot.’ Can you think of any other industry that offers as many opportunities as the hospitality sector does to move from one function (or continent) to another, or to work your way up from dishwasher to business leader?

With Brexit looming, do you expect a big shortage of professional employees in the UK?
It is said that the UK hospitality industry employs well over 400,000 EU migrant workers. Currently, these workers are free to enter the UK without any form of work permit or visa. Employers thus enjoy a very flexible labour market. The referendum and the recent announcement to formally trigger Article 50 has created a lot of uncertainty for businesses in general, but particularly for the hospitality industry. This uncertainty has already – anecdotally – resulted in fewer applicants from the Continent. A number of hospitality organisations, specifically hotel and restaurant companies, have publicly raised concerns about not being able to staff their operations with a purely ‘local’ workforce. There is simply not enough talent to fill all vacancies, so a greater shortage of labour is a very likely scenario. Yet, it is my expectation that the hospitality industry – as a key driver of the British economy – will, going forward, be able to continue to hire in some shape or form EU citizens (e.g., via a quota system). However, there is no doubt that this will come along with a much greater administrative burden since it relates to immigration compliance, for example. Ultimately, this will mean that businesses will have to face a greater overall cost to hire and retain the ‘best and brightest.’