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Recruitment and training in small firms
Abstract
The
hospitality and tourism industries are two of the
fastest growing and most dynamic sectors of the UK
economy. Both industries are highly
labour intensive and, because of this, the
effective management of
human resources
is critical to their success. A defining
characteristic of these industries is the high
incidence of small firms. The issue of
training in the small business sector in general
has been neglected by
academics and
management specialists and this is also the case
specifically in tourism and hospitality. This
article goes some way to address this
gap in knowledge and examines the recruitment and
training practices
of small tourism and
hospitality firms. The issues examined include
sources of recruitment, the extent to
which small tourism and hospitality
firms had training plans and training budgets,
participation, and
evaluation of
training.
Keyword(s):
Recruitment;
Training;
Small
firms;
Hospitality;
Tourism.
Background
Small firms and
training
Although definitions of small
firms have been extensively debated, there is no
disagreement that the most
commonly
found tourism or hospitality enterprise is small
(Thomas, 1998). To date, very little research has
been conducted in these organisations.
This is no surprise and as Matlay argues:
The issue of training in the small
business sector of the British economy has largely
been neglected by
academic researchers
and human resource planning, development and
management specialists who, until
recently, were content to suggest
solutions which were more relevant to the
businesses strategies of larger
firms
(Matlay, 1996, p. 648).
This is supported by Johnson and
Gubbins (1992, pp. 28-9) who suggest
that:relatively little is known
about
the extent, nature and determinants of training in
small and medium-sized businesses, either on a
national or on a local basis.
It is argued that with the
growth of tourism and hospitality and the
importance of human resources
within
them this neglect should not continue.
1
Research conducted in
hospitality and tourism firms of all sizes has
discovered that informality and a
relatively unsophisticated management
style characterise the approach taken towards
recruitment and
training (Goldsmith
et al.,
1997; Price, 1994;
Lucas, 1995; Baum, 1995). Research on recruitment
and
training in small firms in general
(Jameson, 1998) has also indicated that an
informal approach towards the
management of human resources is the
norm in these firms. One of the major themes in
small business
literature has been the
examination of the informality of relations
between employers and employees. A
correlation has been found to exist
between the size of firm and level of formality in
various sectors of the
economy (see,
for example, Scott
et al
.
(1989); Curran
et al.
(1993)). Research conducted specifically in
hospitality firms (Price, 1994, p. 49)
found that:
one of the main findings
from the survey was the importance of the
relationship between
establishment size
and employment practices … there was a strong
correlation between size and the extent
to which establishments had introduced
personnel policies, procedures or other
arrangements which met the
requirements
of employment law.
The
significance of this relationship cannot be
underestimated and must be borne in mind when
interpreting the results on recruitment
and training in the small firms in the sample.
Any meaningful analysis of recruitment
and training cannot be undertaken without some
understanding of the labour market
within which small tourism and hospitality firms
operate. Much effort
has been expended
developing theoretical models of the labour
market. As far as the tourism and
hospitality industries are concerned
one of the most useful theories is dual labour
market theory. Goldsmith
et
al.
(1997) summarize this succinctly.
Dual labour market theory proposes that the total
labour market can
be segmented. One
section is the primary labour market, where jobs
tend to be supplied by large, highly
profitable firms with a high capital to
labour ratio and high productivity. Here,
production is usually large
scale with
high investment in technology. Employment in these
firms is normally stable with relatively
high skill and wage levels. In this
context, there are normally opportunities for
training. The secondary
labour market
is normally characterised by small firms with low
capital to labour ratio, low productivity
and small scale production. In these
firms, wage and skill levels tend to be low,
employment is unstable and
training
opportunities are usually limited. Small tourism
and hospitality firms normally tend to operate
within the secondary labour market.
There are obvious relationships between
recruitment and training. One relationship is
where training
can provide solutions to
problems in the labour market. Campbell and
Baldwin (1993) suggest that in many
2
industrialised countries there is a
concern that skills shortages and mismatches are
appearing in the labour
market and that
policy makers are aware that recruitment
difficulties and skill shortages may reduce the
competitiveness of small and large
firms. Bradley and Taylor (1996) suggest that
there is a growing
awareness that
education and training systems can influence the
skill and occupational mix of a locality and
local economic wellbeing. Another type
of relationship is one where the level of
recruitment affects the
level of
training. In tourism and hospitality, with their
reliance on the secondary labour market and high
rates of labour turnover, there is a
strong tendency to have high levels of recruitment
and low levels of
training. The
arguments being that either it is not worth
investing in training or there simply is not time.
Recruitment
Research on
tourism and hospitality firms in general (i.e. not
specifically small firms) refers to
informal and unsystematic recruitment
methods (Lucas and Boella, 1996). Others, who have
carried out
research into recruitment
in small firms in general have found a reliance on
informal methods (see, for
example,
Curran
et al.
, 1993).
Millward
et al.
(1992) found
that, whereas larger enterprises relied greatly
on formal methods and bureaucratic
procedures by specialist personnel departments,
the small business
owner/manager is
likely to handle recruiting and personnel matters
without delegating and is unlikely to
have any relevant skills.
Training
Tourism and
hospitality have one of the highest levels of
skill shortages (HCTC, 1995; HEFCE, 1998).
If, as Bradley and Taylor (1996)
suggest, training can influence the skill of a
locality, then it is interesting
to see
how seriously small tourism and hospitality firms
take training.
According to Curran
et al
. (1996) small
businesses experience problems in providing
training for both
owner-managers and
workers. It has also been discovered that the
hospitality industry displays one of the
lowest levels of training activity in
the UK economy (HCTC, 1995). These points should
be borne in mind
when the results of
this survey are interpreted.
Two of the
indicators of a systematic approach to training
are the existence of a training plan/policy
and a specific budget for training.
According to the Hospitality Training
Foundation (HtF, 1996) 63 per cent of employers in
all
industries had a training plan. In
catering and hospitality 64 per cent had a
training plan. The most recent
research
on training and small firms found that only 28 per
cent of such firms had a training plan.
3
It is appropriate to
discuss training budgets alongside training plans.
It is also useful to compare the
survey
findings with all industries and with the
hospitality industry (no figures are available for
tourism). In
all industries 55 per cent
of employers had training budgets; in hospitality
this figure was 43 per cent
according
to IFF research (HtF, 1996). However, research
carried out by the HtF found that only 19 per
cent of hospitality firms had a
training budget.
In the UK, the
provision of training to SMEs has become a central
issue of economic policy (Miller
and
Davenport, 1987). Storey (1994) has described this
as a major indirect small firms policy initiative.
Over the last decade, the provision of
training and support to SMEs has increased
considerably involving
national and
local Government, the private sector, and further
and higher education institutes (Westhead,
1996. In the survey on small tourism
and hospitality firms, the issue of training
provision was examined.
There is little
point in investing in training without attempting
to measure its effectiveness. Measuring
the effectiveness of training is
extremely difficult in any size of firm. The small
firms literature suggests
that owner-
managers of small firms assess the value of
workforce training in an informal way and tend to
use various kinds of subjective
assessments. The firms in the survey were
questioned on if and how they
measured
the effectiveness of training.
Research
method
Researchers at The Centre for
the Study of Small Tourism and Hospitality Firms
based at Leeds
Metropolitan University,
UK, were keen to examine business practices in
small firms both by breadth and
depth.
As such, it was decided to administer a
questionnaire to 4,331 small firms. In total,
1,103 were
returned completed, giving a
response rate of 26 percent. The project focused
on four regions: Cumbria;
Heart of
England; West Country; and Yorkshire. Eight
sectors were chosen to provide a broadly based
cross-section of these industries.
These sectors were public house/bar; travel agent;
hotel; visitor attraction;
B&B/guesthouse; fast food/takeaway;
restaurant or café
; self-catering. The
vast majority of firms in the
sample
were independently-owned single outlet businesses
(80 per cent). The definition of a small firm
adopted for the survey is fewer than 50
employee
s and is a conflation of the
European Commission’s
definition of
very small (or micro) enterprises (fewer than ten
employees) and small (between ten and 49
employees). The sample source was the
Business Database (British Telecom) and a
disproportionate
stratified sample was
specified within the four regions to provide a
cross-section of experiences. This
article presents some of the findings
of the national survey of small tourism and
hospitality firms. The
survey is the
most comprehensive of its kind ever to be
undertaken in the UK and examined business
4
performance, the business
environment, marketing and recruitment and
training in small tourism and
hospitality firms. The survey
represents a barometer of the changing attitudes
and behaviour of those
operating small
tourism and hospitality firms.
This
article concentrates on the recruitment and
training practices of the firms in the survey. The
aim
of the research was to discover the
extent and nature of recruitment and training in
small tourism and
hospitality firms.
Results
Informality and a
relatively unsophisticated management style
characterise the approach taken towards
recruitment and training in the small
firms in the survey.
When respondents
in the survey were questioned about their
recruitment activity during the past year
(see Table I), and more specifically
were asked about the methods used to recruit
staff, word of mouth was
the most
commonly used recruitment method, followed by
local press and job centres.
These findings support the advice in
the recruitment literature which normally suggests
that small
firms should recruit from
the local labour market and should keep their
recruitment spending within a very
tight budget.
In addition to
questions on recruitment, respondents were asked a
series of questions on training
practices. When they were asked if they
had a training plan for their business, the
results were as indicated
in Table II.
Although only 11 per cent of small tourism and
hospitality firms had a formal written plan,
significantly more had some sort of
training plan. Although this is lower than for
other industries and the
hospitality
industry in general, it is higher than the figure
for small firms, and does indicate some
commitment to a systematic approach to
training.
5
As
far as training budgets were concerned, 12 per
cent of firms in the sample had them (see Figure
1).
This figure of 12 per cent is not
discouraging, and in fact, is almost identical to
the figure of 12.5 per cent
for small
firms in general (Curran
et
al.,
1996). Although both the figures
for training plans and budgets
appear
encouraging, more details are required on the
exact nature of the training plans and the precise
amount of money devoted to training in
relation to turnover etc. However, results from
the survey do seem
to indicate that
some small tourism and hospitality firms are
taking training seriously.
Respondents were asked if they had
provided training during the past 12 months (see
Table III).
On-the-job training was the
most common training method used by small tourism
and hospitality firms.
This was
followed by external training courses and
induction. These results are unsurprising as small
firms
in general tend to favour
informal training methods and usually value
training which is specific to the job in
question. Although on the job training
may be appropriate for many jobs in small tourism
and hospitality
firms, this reliance on
informal, unsophisticated training methods is
typical of weak internal labour markets
which generally have low skill
requirements and lack training and promotion
opportunities. This can be
interpreted
as part of the whole package of the informal,
unsophisticated approach to the management of
human resources in small firms which is
characterised by vague hiring standards and
unsystematic
6
recruitment.
It runs counter to the primary labour market which
has a strong internal labour market with
precise hiring standards, formalised
recruitment, high skill requirements and
opportunities for training and
promotion.
Respondents in the survey were asked
about training courses provided by external
agencies and their
replies produced the
following response (see Table IV).
As far as the small tourism and
hospitality firms in the sample were concerned the
courses which they
found to be “very
helpful” were organised by private providers (42
per cent found them to be very helpful).
The provider who ranked second in the
“very helpful” category was trade associations
with 40 per cent.
Courses provided by
the banks appeared to be the least helpful as they
had the highest percentage of
respondents in the “not very
helpful”category. Banks continue to be in the
limelight as far as services to
small
businesses are concerned. Obviously it depends on
which bank and which courses small tourism and
hospitality businesses have
experienced. Much also depends on the expectations
that the owner/managers
have of such a
service. When the positive responses were
combined, i.e. “very helpful” and “helpful”, the
providers who fared best were private
providers (86 per cent), trade associations (83
per cent) and local
authorities (83 per
cent). The banks’ results were worst with only 40
per cent of owner
-managers finding
their courses helpful.
When
respondents were questioned on active involvement
in education or training initiatives, the
results showed the following (see Table
V). As far as Investors in People is concerned the
9 per cent of
7
small
tourism and hospitality firms which were either
committed to or recognised as Investors In People
is
still much higher than the industry
average of 3 per cent. This contrasts with the
HtF’s sug
gestion that small
firms are only as likely as large firms
to engage in Investors in People activity.
Another finding which
contradicts the HtF’s view is that NVQ/SVQs have
not been implemented in
smaller
hospitality establishments. Again, 17 per cent of
small tourism and hospitality firms in the survey
were participating in NVQs and SVQs.
Highest participation was work experience for
school pupils and
work experience for
college students and both of these “initiatives”
have traditionally been extensively
utilised by tourism and hospitality
firms of all sizes.
As mentioned above,
it is pointless to invest in training unless some
attempt is made to measure its
effectiveness. In this survey of small
tourism and hospitality firms one-third of
respondents attempted to
measure the
effectiveness of training within their firm (see
Figure 2). This again indicates that some small
tourism and hospitality firms are
taking training seriously.
In the survey a question on future
training intentions was divided into three
sections; those relating to
owner-
managers, managers, staff. The results are
summarised in Table VI Not surprisingly, the most
likely
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