Transcript Sector skills insights: tourism summary slide pack

Sector Skills Insights: Tourism
Introduction
The UK Commission is working to transform the UK’s approach to investing in skills to
help secure jobs and growth. Key to our ambition is the need to encourage greater
employer ownership of skills, working to secure long term sustainable partnerships.
This slide pack and accompanying evidence report present the case for more employers in
this sector to invest in the skills of their people. It does so by presenting real-life, skillbased business solutions that have been used by leading employers to tackle the performance
challenges they face and by drawing on examples of the investments being made by the UK
Commission through its investment funds.
There are several determinants of employers’ skills needs and training behaviour including firm
size, strategy and location but it is by sector which the strongest variations appear. Hence this
work focuses on the Tourism sector. Slide packs and reports are also available for a number
of other sectors from: www.ukces.org.uk. Each of the sectors are important to the economy in
terms of employment, productivity or their future potential.
For information about this slide pack and accompanying report please contact:
[email protected]/01709 774 800
Source information can be found in the notes section of each slide
Storyboard
What are the key
skills challenges in
the tourism sector?
Tourism matters:
the importance of
the sector today
Tourism matters:
the sector tomorrow
The performance
challenge:
Productivity
The performance
challenge:
Employee
engagement
The performance
challenge:
Employee turnover
and retention
The performance
challenge:
Investment in
workforce skills
Growth through
Benefits
to business
skills: Securing
future success
Benefits to business
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What is the tourism sector?
Hotels and other
accommodation
Restaurants
and bars
Gambling
and betting
TOURISM
Travel agencies
and tour operators
Sport and
recreation
activities
The sector includes many businesses that are not solely driven by tourism, and may not
self-identify as being part of the sector
What are the key skills challenges in the
tourism sector?
The UK tourism sector is large and growing. Output has increased by over 5% per year
for the last decade, and will increase by a similar amount over the coming decade. Major
sporting events provide an incredible opportunity to promote the UK visitor economy .
Customers are becoming more demanding, driving up the level of service expected.
Managers and staff need to develop a culture of continuous improvement to meet these
increasing expectations.
The sector needs to improve productivity and attract and retain talent .
Poor perception of parts of the sector (low pay and unsociable hours) can make it difficult to
attract staff. Tourism has the highest labour turnover rate of any sector.
There is a high proportion of transient workers which can be useful in matching staffing levels
to demand, but makes long-term workforce planning more difficult.
Not enough employers invest in the workforce. The sector has a relatively high level of
spend per employee on training, but much of this is the cost of training new recruits as a
result of high labour turnover.
Employers need to invest in staff and increase employee engagement. A more motivated
workforce will lead to improved customer satisfaction, increased revenue and profits, and
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reduced staff turnover.
Tourism matters: The sector today
•
•
Tourism is an important contributor to the UK economy. Sector output was £62 billion in
2010 (2006 prices): 5% of total GDP
Businesses in other sectors sell to and purchase from the visitor economy, contributing
as much again to GDP
•
•
•
It employs around 2.5 million people (1 in 12 UK jobs).
Half work in restaurants and bars, while a fifth work in
the sports and recreation activities sector.
Over a third of workers are under 25, compared to the
average across all sectors of 13 per cent.
Output has increased by 5.6% per year, and
employment by 0.6% per year, over the last 10 years.
•
•
The proportion of small and micro operators is very high
There is a high proportion of elementary and customer
service occupations and workforce qualification levels
are lower than average
•
•
The visitor economy plays a particularly important
role in rural economies and communities
The sector is a major provider of leisure activity
The sector today
The top visitor attractions in 2011
were the British Museum, the
National Gallery, the Tate Modern.
the Natural History Museum and the
Science Museum, with almost 24
million visitors combined.
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Tourism... matters:
Imagine where it could be tomorrow
•
•
•
•
•
•
•
•
The UK is a Top 5 world destination (tourism
revenue)
We attract an even greater share of the
international tourism market
More than half the tourism expenditure of UK
residents is spent in the UK rather than
overseas
The sector capitalises on the opportunities
provided by the “Golden Decade of Sport” –
major sporting events from the Olympics to the
Cricket World Cup – to promote the UK visitor
economy
Employment, output and productivity all continue
to increase
The sector recognises talent as a source of competitive advantage
Firms and individuals invest optimally in their skills
Employers collaborate on, lead and own skills solutions to the sector’s skills issues
The performance challenge
Productivity
Labour productivity is lower in service sectors than other
sectors of the economy, and also varies more across the
sector.
Labour productivity performance is highly linked to
demand, as employers need to retain core staff even
when demand falls.
Accurately predicting demand and improved staff
scheduling reduces downtime and increases
productivity. This requires effective and efficient
management.
High sector turnover means that relatively high
proportions of employees are new to their job at
any one time. Reliance on transient workers also
means employers limit investment in employee
engagement. This results in low productivity.
Employers need to invest in their workforce and
allow workers increased task discretion. This will
raise motivation and productivity.
Motivated employees, who are happy
in their jobs, are more likely to provide
good customer service, which leads to
satisfied customers and ultimately
greater profit.
Excellent customer or guest service is
essential for repeat business and
maximising the ‘Lifetime value of a guest’”
(Sandy Balls Holiday Centre)
Satisfied customers are more likely to
become repeat customers/visitors and
recommend a business to others.
Case study: productivity
The challenge
The sector has tight margins and relatively low productivity. Businesses need to make sure costings are
accurate, cut down on errors and know their suppliers. Trinity Conferences, a venue-finding agency, wanted
to make sure its 23 employees were working as effectively and productively as possible and providing an
excellent level of customer service.
The Approach
The business decided to work towards Investors in People accreditation.
“Going for Investors in People was pretty counter-intuitive when the sector
was being hit hard by the recession,” says Jacqui Kavanagh, MD. “Investors
in People has enabled us to respond ... and gives us an infrastructure for
communication and measurement of performance for our staff to allow them
to deliver at a very high level. Trinity achieved Investors in People Gold in 2010.
The benefits
Jacqui sees the effect of Investors in People on her team: “It’s really important. It’s really raised the game for
the team. The structured approach ... has meant internal promotions”. Jacqui adds “All this means that [staff]
can really add value.” Turnover has increased by 27% in 18 months, and sales are up by more than 30%
on pre-bookings over the coming two years.
Trinity Conferences won the ‘Promoting Excellence within the Industry’ Award at the 2011 annual conference
of the Hotel and Booking Agents Association (HBAA). Jacqui firmly believes that Trinity’s Investors in People
recognition enabled them to achieve the HBAA award.
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The performance challenge:
Employee engagement
Employee engagement is critical in helping businesses maximise the potential of their staff,
and excel at customer service. Three quarters of businesses feel their employees are quite
engaged or very engaged at work. However, some businesses do nothing to engage their
staff, as they don’t believe their employees intend to stay in the job.
Employee engagement
interventions include flexible hours
or working patterns, employee
involvement practices such as
appraisal and consultations, and
financial incentives and bonuses.
“We’re selling more than just a
holiday … we want it to be
something that will long be
remembered because it was so
special … we place a
tremendous amount of
investment in making sure our
staff have the skills to be able to
deliver the highest possible
service” (Vivienne Thorne, HR
Director, Bales Worldwide).
Malmaison & Hotel du Vin found customer complaints
fell, staff turnover fell, and sales rose after introducing an
employee engagement strategy [case study]
Case study – Engaging employees
The challenge
Sister hotel groups Malmaison and Hotel du Vin were, like many others in the tourism sector, affected by the
economic downturn. They decided to “put customer service back on the agenda”, to differentiate themselves
from competitors.
The Approach
Malmaison and Hotel du Vin developed an employee engagement strategy, focused on happy staff at all
levels, engaged in their jobs and providing excellent customer service. Staff focus groups identified the five
behaviours of engaged employees :
• strong relationship building with customers, managers & peers
• attention to detail, and giving the extra ten per cent
• energy and drive
• resilience and passion in one’s work
• shaping each working day into one’s own, and being achievement-focused
The new approach was supported through a manager development day, appraisal system based on the five
behaviours, training opportunities, and improved communication between management and staff. Its key
principles are:
• ‘win-win’ approach – employees are offered training to support career progression and the business can
expect excellent performance
•‘keep it simple’ – staff are given the freedom to be themselves in providing excellent customer service.
The Benefits
Customer service complaints have decreased by 15 per cent; staff turnover has declined by 17% year on
year; and average customer spend increased in hotel brasseries by 11%.
The performance challenge
Employee turnover and retention
Labour turnover in the sector is high and staff retention rates
low. Pubs, bars and nightclubs have the highest staff turnover of
all UK sectors (23% in 2011 and 31% in 2009). Labour turnover is
also higher in urban areas than in rural settings.
Tourism employers will have to replace over a
million employees between 2010 and 2020.
A key reason for high levels of labour turnover is the historic recruitment of transient labour,
such as students and international workers, who are seeking short-term job opportunities
rather than long-term careers. Reliance on transient workers reduces the effectiveness of
employer engagement activities, which reduces the potential for greater productivity gains.
Alternatives to transient workers include female returners and older workers, who may
prefer permanently flexible roles. They can provide businesses with flexibility whilst reducing
staff turnover costs and the loss of skills and knowledge.
Case study - Reducing labour turnover
The challenge
Red Carnation Hotels, a collection of 13 international boutique hotels with 900 staff in the UK
and 2,000 staff worldwide, was experiencing retention problems, with high labour turnover of
80 per cent, potentially damaging the quality and consistency of service and the reputation of
the company.
The approach
The HR and Training Director developed a practical,
project based management and leadership training
programme (Ambassadors in Management) linked to
nationally recognised qualifications. The programme helps
staff to identify clear career paths, and the project-based
approach links to clear business impacts.
The benefits
AIM has resulted in significant business benefits:
“One of the most successful
programmes I have seen in my
entire career ... it has given 256
people an excellent opportunity
to grow throughout the
company” Jonathan Raggett,
Managing Director.
• Labour turnover reduced from 80% in 2001 to 24% in 2009, with improvements at all levels
• Saved £500,000 in recruitment costs over the past eight years
• Improved succession planning, and increased internal promotion of managers
• Improved employee satisfaction
The performance challenge
Investment in workforce skills
The sector has one of the highest training expenditures per employee (£3,635). However, much of this spend
is on induction training for new recruits due to high turnover. One in five employers report skills gaps (where
some staff are not fully proficient in their jobs), compared to an average of 13%. Over 8% of staff are not fully
proficient, above the average of 5%.
Half of all skills gaps are among elementary staff,
but managerial and customer service skills are also
often lacking. A lack of clear pathways within the
sector means staff may not receive appropriate
further training, and contributes to high labour
turnover. High levels of labour turnover undermine
ongoing skills development and reduce employee
engagement.
Employers who invest in staff can turn this around,
and create a virtuous circle where workforce
upskilling and engagement results in greater
levels of motivation and satisfaction, a more
stable workforce, and improved business
performance
Improving management quality has a significant
impact on firm’s productivity and output. Excellent
management can help reduce turnover and
increase productivity, as with Red Carnation Hotels.
[case study]. TUI Travel have clear progression
routes from apprentices to managers and benefit as
a result. [case study]
5
5
Managers
Professionals
0
20
20
Associate professionals
22
“Customers3 are far more demanding,
far
Administrative/clerical staff
7
more enquiring, [they want] services to
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Skilled trades occupations
be delivered as and when
they
want
17
6
them
not
when
it
suits
the
provider,
far
Caring, leisure & other services staff
9
Tourism
more likely3 to make comparisons about
All sectors
Sales and customer services staff
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service
standards
across
sectors.”
1
Machine operatives
5
(David Parsons,
Chief Executive,
36
Elementary staff
Institute of
Customer
Service)
7
1
Unclassified staff
2
0%
5%
10%
15%
20%
25%
30%
35%
40%
Occupational Distribution of Skill Shortages
Customers expect high quality service. Effective
raising of customers skill levels requires
customer-focused business culture within a
business, driven from the top down by leaders
and supervisors who have excellent customer
service skills themselves and lead by example.
Case study – Growing your own
from apprentices to managers
The challenge
TUI Travel PLC is a large travel group which employs 19,000 people in the UK. The
company needed to ensure a sufficient supply of future workers for its posts in the UK and
overseas.
The approach
TUI Travel PLC established an extensive apprenticeship programme.
They received 15,000 applications and have a rigorous selection
process which includes a “taster day” in a branch. They provide a
range of support to apprentices, including a 2-day “Welcome Event”,
5 hours of study time a week, 6 formal off-the-job training days a
year, and e-learning support. There are now 450 apprentices
working towards the Level 2 Apprenticeship in Travel and Tourism
Services and 350 on Level 3 Advanced Apprenticeship (2008).
The benefits
“We are trying to
develop people for the
future and the
progression stages are
very clearly mapped
out … we’re always
looking for them to
become managers”
Andy Smyth,
Accredited
Programmes Manager)
The benefits of investing in workforce skills include:
• Improved sales performance – ex-apprentice Travel Advisors achieve 16% higher sales
than non-apprentices, ex-apprentice Retail Managers 13% more
• Improved retention – apprentices stay on average two years longer than non-apprentices
• Improved progression – 44% of Assistant Retail Managers are ex-apprentices
Growth through skills
Securing future success
•
•
Across the sector, raising skills is key to raising performance, but while there is no silver
bullet, a mix of actions which push and pull in the same direction can help.
Employer leadership in the development of solutions and then taking ownership of those
solutions is fundamental to their success and sustainability.
Sources of investment are available to support the implementation of solutions led by
business on behalf of the sector.
•
The Employer Ownership pilots offers all employers in England direct access to up to £250
million of public investment over the next two years to design and deliver their own training
solutions.
•
The Growth and Innovation Fund (£9 million invested so far, £29 million to invest in 2012-13)
gives priority to solutions for the sector e.g.:
•
Employer commitment and investment in Apprenticeships
•
Creation of employer networks to overcome skill problems
•
Employer-backed proposals for other skills solutions such as: management and leadership;
professional standards; high performance work practices incorporating people
development (e.g. Investors in People).
•
Information and business advice is also important as a solution.
Ultimately this is trying to catalyse sustained investment in the development of the sector’s
workforce led by employers which lies at the heart of an enterprising and dynamic nation.
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Growth through skills
Securing future success
The National Skills Academy for Hospitality, backed by leading employers, supports sector
employers to develop workforce skills.
The Academy runs customer service courses for team members, managers and supervisors; and
offers Smiles for Britain, a free online motivational and engagement tool to help staff become more
enthusiastic about excellent customer service.
The Advanced Apprenticeship Management Development Programme provides the opportunity for
newcomers in the industry to develop the right skills, product knowledge and financial acumen to
run a successful pub, restaurant or bar;
The NSA also supports an online E-Academy which provides the Hospitality industry with
accessible, accredited and valuable e-learning compliance training
The National Skills Academy for Sport and Active Leisure is led by employers. It provides quality
training solutions specifically designed for the sport and active leisure sector; access to a network of
over 80 quality-assured training providers, and hundreds of courses; supports employers to access
public funding for training; and runs a membership programme, with benefits including discounted
online training and specific statutory training offers.
New College Nottingham runs Apprenticeships of relevance to the sector. The college works with head chefs in the
area to plan menus and lessons to make the courses relevant to local businesses, including the award-winning
restaurant Tonic, in Nottingham. The college sources new apprentices and helps the restaurant meet its staffing
needs. The Apprenticeship teaches a range of skills including communication, team-working, and business skills (for
example, pricing up menus in order to make a profit).
Growth through skills
Securing future success
UKSP, a guidance website for careers in hospitality, leisure, travel and tourism aimed at
employers, employees and students, provides information on different roles and career
paths. It allows employers to post vacancies, search the talent directory to find
motivated individuals looking for a career in the sector, and get access to information on
the best qualifications and training courses for their staff.
Employers offering people a ‘taster’ of the
sector is a good way of changing
perceptions, and offering a work experience
placement through Jobcentre Plus to a
young person, or a work experience
placement to an unemployed person through
sector-based work academies, can help
people decide whether the sector is for them.
Employment 1st pre-employment training, run
by People 1st, is aimed at people looking for
their first job in the Tourism sector. It covers a
wide range of job roles, including chef and
theme park attendant. The training leads to a
Level 1 Award in Introduction to Employment
in the Hospitality Industry.
Employers and sector bodies can improve the
talent pipeline into the sector through
Apprenticeships, and thinking creatively about
potential sources of recruits. Apprentices can
help tackle skills shortages and skills gaps in
elementary occupations, and employers can
develop clear pathways to management roles.
The sector relies heavily on transient workers
and young labour market entrants. The number
of 16-24 year olds will fall by 500,000 between
now and 2020. Employers can look to
alternative labour pools, including women
returners and early retirees
Benefits to business
•
•
Higher productivity: a fully trained workforce can increase organisational productivity by as
much as 24%.
Employers gain 2-5 times more from the increased productivity effect of training than any
increase in wages for trained staff
Higher survival rates:
Businesses that do
not train...
In the
Transport
& Comms
sector are
twice as
likely to fail
In the Hotels &
Restaurant
sector are
nine times as
likely to fail
Are on
average
twice
as likely
to fail
In the
Manufacturing
sector are
twice as likely
to fail
In the
Retail &
Wholesale
sector are
twice as
likely to fail
In the
Construction
sector are four
times as likely
to fail
Key messages
•
The tourism sector makes a significant contribution to the economy in terms of output
and employment and is projected to grow rapidly over the next decade.
•
Customer expectations are driving up the level of service expected.
•
The sector needs to address the following challenges:
– Low productivity
– Increasing employee engagement
– Reducing employee turnover
– investing effectively in skills
•
Management skills are key in developing staff and creating an engaged, motivated
workforce providing excellent customer service.
•
Examples exist of where these challenges are being tackled successfully through
employer-led skills solutions. If the sector is to realise its potential this action must be
scaled-up and employers must play a greater role in developing the skills they need
•
The UK Commission is looking to work with employers to transform the UK’s
approach to investing in skills of its people to secure growth and prosperity.
More information about the UK Commission’s investment funds is available here