Heading the list of challenges in the hospitality industry for most executives is human capital – running the gamut from recruitment, training and development to motivation, retention and compensation. Hospitality is a people-intensive business – not only lots of customers to worry about serving well but also multitudes of employees or, as they frequently say in the trade these days, associates.

As the "Hospitality 2000: The People" survey on people in the industry found, one of the problems is that hospitality enterprises tend to view human capital management from an administrative rather than a strategic point of view. While human capital strategy should be high on everyone's agenda, it is especially important in the hospitality industry that is beset with high levels of turnover, low levels of motivation, challenges with training and development, and disadvantages relative to other industries in terms of image, reputation and pay scales.

High turnover of people is extremely expensive. As with customers, it is a great deal more productive to invest in the retention of existing employees than to recruit and develop new ones. Root course analysis deployed in areas of the company with high levels of turnover needs to identify factors that are both controllable and intractable, with solutions developed to mitigate the factors that can be controlled.

The hospitality industry also needs to learn from both its own industry leaders and from best–practice companies in other sectors. One theory in hospitality management is that a clear relationship exists between employee and customer satisfaction, which in turn drives profitability. While it's a simple theory, it is not widely adopted. Hospitality managers don't always measure employee satisfaction adequately enough to foster and manage this virtuous sequence. For some companies, the presence of a particular culture can also either hinder or help progress. In mergers, for example, conflicting cultures are frequently the principal causes of failure of companies to deliver on the promises of organizational synergy.

In syncing up the organization to whatever the strategy is, there are a number of issues related to human capital that frequently require addressing. Roundhill Hospitality's organizational work is oriented to responding to these including: how can human capital be managed more strategically? does the organization's human capital strategy, organization and culture foster the development and retention of the best people? how should executive talent be developed? is the compensation program designed to attract and retain the best and the brightest? how to mitigate the high costs of employee turnover? how to encourage employee loyalty? how to adequately measure employee satisfaction? is the culture supporting or hindering growth? how might the culture be changed, if necessary?

In addition to the above issues relating to human capital, Roundhill Hospitality provides organizational design services and organizational benchmarking against best practices.

For more information about Roundhill Hospitality's Organization Practice, please contact us.