E X E C U T IV E OU T L O O K
Cultivating ‘smart growth’ leaders H OSPITALITY AND LEISURE INDUSTRY The perspectives of a CFO to outpace theIN global economy NEEDS TO CHECK G ENERATION Y master class
by Michael O’Callaghan and By Peter Everaert, Scott Kin
by Michael O’Callaghan and Chris Campbell B JA M E SEveraert, HY D E A NScott D ER IC A WIL D IN G Indranil Roy ByY Peter Kingdom and
The travel, hospitality, and leisure industry has had a difﬁcult time recruiting talent from Generation Y, but that doesn’t have to be the case. The industry has some natural advantages that align with the values and aspirations of this younger generation of workers. Many hospitality and leisure companies could beneﬁt from changes that would further meet Gen Y’s career desires. This research was developed by Korn/Ferry for the World Tourism Forum, and presented by James Hyde at their 2013 annual conference in Lucerne, Switzerland.
The Generation Y employee has been described as many things: tech-savvy, independent, overly entitled, eager for feedback. Leisure and hospitality companies can add another phrase: underrepresented. Few travel industry executives see that situation changing easily. In a survey conducted by Korn/Ferry International in advance of the 2013 World Tourism Forum in Lucerne, Switzerland, fewer than half of respondents said that the industry’s ability to attract top young talent is improving. It’s been held back in recent years by cutbacks, poor general perception as a career, and an inability to compete with the salaries and prestige offered by other consumer and financial services companies. But sands are shifting. Generation Y, or Millennials, have aspirations, interests, and working styles that would easily favour jobs in hospitality and leisure—at least for companies that put their best foot forward. Studies show that Gen Y professionals (including not only those just entering the job market but also those now in their early 30s) are seeking careers that they find personally fulfilling, not just remunerative. They want new learning opportunities, variety, and the chance to make a difference in the world. Hospitality careers could easily play to these generational aspiriations. The industry has an unmatched geographical footprint and can provide the opportunity to work abroad much earlier in a career than most industries. This is also a group that grew up very aware of environmental and sustainability issues, and the positive impact that tourism can have on nature conservation and mindful economic development in deprived areas of the world should also align well to their values.
Smart companies, though, won’t just play up such perks, but consider more fundamental changes to attract and take advantage of Millennial talents. For instance, hospitality careers traditionally have been quite linear, starting at the reception desk or some entry-level office job, and moving up slowly in operations, general management or a functional role. Spending twenty years on hotel operations won’t play with this generation. They are far more likely to be attracted to a career path that provides exposure to a broad range of functional areas before settling into one—or, using that breadth of commercial understanding to progress to senior general management. Such a “career lattice” approach has many advantages for organizations: It helps ensure that people are continually learning. It gives high-potential leaders an opportunity to find a role that truly engages them. It creates well-rounded general managers, exactly the kind you want moving into the C-suite. Studies also indicate that this generation wants stimulation, assignments that require them to stretch their abilities, and regular feedback. This, too, is a good thing—particularly for intensely consumer-facing businesses like travel. But all types of organizations would benefit from intentionally putting future leaders through challenging assignments and creating a culture of self-awareness. If companies accelerate their learning programs, use more strategic job assignments, and make feedback an ongoing thing rather than an annual process, the whole organization will benefit. But put Gen Y-ers in a stagnant, monotonous work environment, and they will vote with their feet. Job security is not particularly important to them, in part because they have not grown up in a “job for life” society. If companies fail to acknowledge and address these shifts, they will not only bleed talent for years to come, but also do lasting damage here and now. Those born in the early ’80s are already among today’s innovation leaders in retail, technology, or entertainment—the kind of talent the travel sector would benefit from attracting. They are in touch with the latest technology and in tune with where customer demands are headed. Consider just the recent transformation in travel planning. Travellers do much more online research, have access to peer “reviews” and input via social media. They want to customize and maximize every experience, flying in and out of different airports, staying in multiple hotels, and leaving time to explore, not just booking from a list of activities. Generation Y inherently understands these desires as well as the technology that enables such choices. 2
To harness the fresh ideas of Generation Y, the travel sector must take steps urgently, starting with: Invest in compelling employee propositions. Companies can no longer rely on their commercial reputation and doing a “good selling job” at interview. Articulate clear company values that align to those of Generation Y. A good example is InterContinental Hotel Group’s “Winning Ways” (Do the right thing; Show we care; Aim higher; Celebrate difference; and Work better together), which communicate to any applicant that this company knows its brand is nothing without people who deliver a great experience to the customer. Design career paths with deliberate detours. Create talent strategies that encourage and facilitate mobility across geographies and functions. Move talent more quickly, but also explain expectations—with care—when someone needs to be in a role longer than two years. Actively manage the threat of boredom. Talk to the talent pool. Beyond existing social networks, companies can create an online talent community to, in essence, tag people who might be future hires. For a person who has expressed interest in a job, this is a channel to find out more about the company’s values and enter into dialogue with it. For companies, this will be an important way of “staying in touch” with new talent and keeping their level of interest high until an appropriate opening arises. If the leisure and hospitality industry fails to respond to the cultural/working preferences of Gen Y, it will fail to connect with the changing habits of its customers. But all that can turn around if the industry views Generation Y not as a hiring obstacle, but as an opportunity to transform its talent strategy.
James Hyde is a Senior Client Partner in Korn/Ferry International’s London office and member of the Firm’s Global Consumer Market, focusing on the Travel/Hospitality/Leisure Sector. He sits on the World Tourism Forum’s Advisory Panel. email@example.com
Erica Wilding is a Senior Associate in Korn/Ferry International’s Consumer Practice in the London Office. firstname.lastname@example.org email@example.com
About The Korn/Ferry Institute The Korn/Ferry Institute generates forward-thinking research and viewpoints that illuminate how talent advances business strategy. Since its founding in 2008, the institute has published scores of articles, studies, and books that explore global best practices in organizational leadership and human capital development.
About Korn/Ferry International Korn/Ferry International is a premier global provider of talent management solutions, with a presence throughout the Americas, Asia Pacific, Europe, the Middle East, and Africa. The firm delivers services and solutions that help clients cultivate greatness through the attraction, engagement, development, and retention of their talent. Visit www.kornferry.com for more information on Korn/Ferry International, and www.kornferryinstitute.com for thought leadership, intellectual property, and research.
4 © 2013 The Korn/Ferry Institute