People Management at Seaside Hotel

Seaside Hotel is an independently owned, three-star hotel situated in Newquay in Cornwall. It has 108 rooms and permanently employs 30 full-time staff and approximately 40 part-time employees. During the period of peak demand between May and August, the hotel virtually doubles its labour force with casual and temporary labour. Cornwall presents a challenging environment for any business, particularly those that serve the tourism market. Business is highly seasonal with hotels experiencing very low occupancy during the off-season and many hotels choose not to operate during this time. The Seaside Hotel operates all year round by supplementing its tourism trade during the off-season by offering discounted conferencing facilities for local businesses and as a cheap base for corporate events and activities, such as teambuilding weekends. Tourism is, however, vitally important for the region and its businesses and provides a significant proportion of all jobs in the South West. Cornwall can, however, be a difficult place in which to work.  For instance, Newquay – Cornwall’s most popular holiday destination – is one of the UK’s unemployment black spots due to the seasonality of jobs, with an unemployment rate several times higher than the national average, albeit falling considerably during the summer.

Maintaining a relatively large, permanently employed workforce of 70 employees is a problem for the Seaside Hotel, given that demand during the off-season is highly unpredictable, and when occupancy rates are low it can place a significant burden on the hotel to pay their wages. Conversely, when demand is unexpectedly high during this time, considerable pressure is placed on this ‘skeleton’ workforce to service the needs of customers. In order to cope with this variability of demand, the hotel has trained most of its ‘core’ workforce in a range of skills (for example, silver service waiting, bar work, food preparation, housekeeping, front-of-house, etc.), in order to enable them to cover shortfalls in labour where and when required. The view is taken that even though the wage bill in winter is proportionately higher than in the high season, there is a desire to retain ‘the best and most experienced staff on a year-round basis’. The comprehensive training provided to the core workforce to allow such an approach does, however, present a problem for management. The range of skills possessed by these workers makes them highly employable in the local labour market and the hotel has experienced high turnover among this group in the past. In recognition of their importance, however, the hotel has begun to offer higher than average wages, bonuses attached to length of service and good terms and conditions of employment (for example, a generous holiday entitlement), in order to ensure both staff loyalty and commitment. This has resulted in a largely stable core workforce, many of whom have been at the hotel for several years. This group largely ‘manages itself’ and enjoys a good working relationship both with each other and the hotel management. They are often consulted over new practices or changes being made to the hotel and often make valuable contributions to decision-making. Each month, a member of core staff is chosen to be an ‘employee of the month’ and receives a cash bonus.

During the summer months, casual employees are largely recruited from among those making informal enquires about employment. Some of these transient workers have previous experience of hospitality work but many are unskilled with no prior experience. These casual employees are typically used to ‘top up’ in the kitchen, restaurant, bar and housekeeping – those areas most sensitive to fluctuations in demand. Many of these workers come to Cornwall during the summer months to enjoy the nightlife in Cornwall but are vital for the local economy during this time, as the current hotel manager recognises, stating that ‘Cornwall would not function, could not survive, if people did not come to work here in the summer’. Training is typically minimal and takes place ‘on the job’. Staff are often thrown in at the deep end, after having been briefly instructed on a limited range of simple tasks, with core workers retaining the more skilled work. Casual employees often complain that they are left with the ‘dregs’ in terms of tasks and are used as ‘scivvies’ by the core workers, and senior managers at the hotel often refer to the casual workers simply as ‘bodies’: those employed simply to make up the numbers. The hotel experiences high levels of turnover of staff from this casual workforce but the hotel manager is unconcerned by this, arguing that it simply represents ‘natural wastage’ and that these workers are meant to be ‘disposable’. Casual workers are, subsequently, offered no set hours or guarantees of employment from one day to the next and are paid only the national minimum wage.

Questions

1. Which elements of the approach taken to the management of employees conform to ‘hard’ and ‘soft’ HRM, respectively?
2. What are the potential problems that the current way in which labour is organised and treated might create?
3. To what extent do you think that the approach taken to the management of labour in the hotel is ethical?