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Sunday, 11 September 2011

Thesis Chapter 1 on Outsourcing in the Hotel Industry in UK

CHAPTER 1


PROBLEM AND ITS BACKGROUND


 


Overview of the Study


The hospitality industry in UK is continuously growing in the 21st century. This industry encompasses hotels and other accommodations, restaurants, fast food retail, bars, and catering. It has been characterised in recent decades by the development of an increasing range of highly segmented products and services. Overlapping tourism and leisure services, with a growing business services component, it is a highly competitive global industry (Rowley et al, 2003, 9). Hospitality is a major force in the economy, creating growth and jobs. It employs 1.8 million people in nearly 300,000 establishments and has a total turnover exceeding £64 billion (BHA, 2002). Hospitality and tourism has become one of the world’s most fiercely competitive businesses. The hotel industry is the linchpin of the United Kingdom’s leisure-related service sector: a big business with enormous growth potential. It also contributes to the country’s attractiveness as an international business destination (Lovegrove et al, 1994).


However, the other side of this picture is the reality that it is not effectively coping up with the changes posed by the need to enhance the skills of workers. The hotel industry remains a low skill area of employment where skills are increasingly required to adapt to changes in technology, product range and the social, legal and commercial environment (Rowley et al, 2003, 9). Moreover, the sector has a record of suffering from a chronic shortage of recruits with food preparation skills, wastage from the sector of those with vocational skills and qualifications. Likewise there is a widespread evidence of vacancies, which are hard to fill. Britain receives some 25 million overseas visitors a year, spending nearly £13 billion, but these numbers have been broadly static for several years, revealing problems of competitiveness which government and the industry need to address (BHA, 2002).


            But it does not mean that the industry is doing nothing. According to the British Hospitality Association (2002), with the support from the government, it is discussing the skills shortage problem through a number of routes, including the annual Careers Festival and special schemes under New Deal. It is a prime contributor to social inclusion and widening participation. Moreover, it urges hotels to concentrate on funding mechanisms. The funding of vocational education in hospitality, especially in further education colleges, must be increased to reflect the fact that the industry is producing jobs of the future; the simplification of the qualifications structure for hospitality must be addresses; and the knowledge of food and practical cooking skills should be a requirement of all stages of the National Curriculum (BHA, 2002)


According to Teixeira and Mishel (1993) “If we build the workers, jobs will come.” That means that improving the skills of the work force will produce high-performance workplaces, substantial increases in productivity, high-wage economic growth, and so on. Changes in how workers obtain qualifications are evolving and, perhaps, is raising skill requirements (Bowers & Swaim, 1994, 82). The shift in the mix of qualifying skills toward those learned in school or formal company programs suggests that demands shifted toward more general and cognitive skills. More educated workers are much more likely to hold jobs requiring qualifications than are less educated workers. In large part, this result merely reflects the importance of educational credentials for professions and other occupations requiring college degrees. But the link between schooling and job qualifications is more pervasive. Workers with a high school diploma or college are more likely than less educated workers to learn qualifying skills through enterprise-based training after leaving school (Bowers & Swaim, 1994, 82).


As skills in workplace are significant to any industries, the British Hospitality Association (BHA) identifies business-related variables that drive changes in skills requirements (Rowley et al, 2003, 10). It falls into four main categories–changes in the customer base, increased competition, concern with sustainability, and change in production processes.  


This study shall be focusing on the outsourcing in the hotel industry in UK. Outsourcing (or contracting out work) started in the manufacturing business in the early 1980s, primarily as a means of cutting back staff and saving on wages. Often a task is considered for outsourcing if the work performed by a consultant would require hiring additional staff if it were done in-house. In addition, work handled by a former employee who may perform a specific service is also considered as outsourcing. The decision to outsource is mainly based on cost, set-up time, and the availability of expertise. According to current literature, outsourcing is a trend that will continue. There are many benefits to outsourcing, including freeing up management resources, sharing costs, creating integrated networks, building new organization structures, training staff, and interfacing with other information systems. Outsourcing is changing the way HR departments operate. Firms that traditionally performed all HR activities in-house are increasingly relying on outside vendors. In fact, about 93 percent of all HR departments recently reported outsourcing at least some of their work (Greer, et al., 1999). While more administrative HR activities such as payroll and benefits are generally deemed acceptable candidates for outsourcing, there is much disagreement regarding the outsourcing of other HR activities that are more closely tied to the core competencies of a firm. One such area is training (Kapp, 2000). Certainly, there is little doubt that training plays an important role in the success of many organizations (Bassi & Van Buren, 1999). Companies such as Dow Chemical, Edward Jones, Dana Corporation, and Southwest Airlines are generally regarded as industry leaders, in large part because of their commitment to employee growth and development. Despite this, firms are increasingly outsourcing training and development activities (Buckley, 1996).


Statement of the Problem


This study intends to investigate the occurrence of outsourcing in the hotel industry of UK. Specifically, the study intends to answer the following questions.


1.                            What aspects of housekeeping do hotels outsource?


2.                            What are the outsourcing techniques used by hotels?


3.                            How effective has outsourcing have been for the hotels?


4.                            What are the effects of outsourcing in the performance of the hotels in UK?


 


Hypothesis


The study seeks to test the following null hypothesis:


“Outsourcing has significantly affected the performance of hotels in the United Kingdom.”


 


Scope and Limitations


The study intends investigate the effects of outsourcing on the performance of hotels in the United Kingdom. For this study, primary research and secondary research will be used. Primary research will be conducted using anonymous questionnaires that will be sent to selected managers of hotels based in the UK. The questionnaires will be used to collect quantitative data and the interviews will be used to provide qualitative insights into the data collected.


The data will be analyzed and compiled for the correlation of the hypothesis. The data will then be presented by means of graphical representations and illustration and the difference would be highlighted. A negative correlation between the variables would suggest that the hypothesis is null, that is, outsourcing has significantly affected the performance of hotels in the United Kingdom.


 


Significance of the Study


This study will primarily benefit the new recruits, and employers/human resource professionals of the hotel industry in UK.  The new recruits, especially those intent on a career in these companies will find out what is expected of them by the industry, what future does these companies has for them, and what they have to do to be competitive career-wise, in this type of industry.  As for the employers, this study will show if future recruits of these hotels can meet their expectations and goals.  Through feedback, they would be able to voice out their concerns regarding the quality of people they need to cope with their demands and the ever-changing needs of the industry.


            This study would also be of help to those market scientists who are interested in finding out the social implications of the boom and the bust phases of the industry. Moreover, educators can gain from this study, as they find the connection between how they have designed their curriculum and what are the actual needs of the industry.  In that way, they would be able to make immediate changes, if necessary, or continued improvement of their programs, through further studies.


            Furthermore, human resource specialists, will have a better understanding of the needs of their industry and what the graduates of the academe can offer to them in terms of type of training and skill.  Any deficiencies in skills training can then be addressed by both the academe and the industry so that there won’t be any labour shortages in that field.


            Finally, this study would benefit future researchers in this kind of  industry, education, human resource management, business and the social sciences since it depicts the future of these companies through selection and development of new recruits.


Dissection of the Dissertation

The dissertation shall be divided into five chapters in order to provide clarity and coherence on the discussion of the effects of outsourcing in the hotels of United Kingdom. The first part of the dissertation will be discussing the problem uncovered by the researcher and provide ample background on the topic. The chapter shall constitute an introduction to the whole dissertation, the hypothesis, and the statement of the problem in order to present the basis of the study. Moreover, the chapter shall also have a discussion on the scope of its study as well as the significance of the study to society in general and specific effects on the management of firms.


The second chapter shall be discussing the relevance of the study in the existing literature. It shall provide studies on outsourcing and the hospitality industry in UK. After the presentation of the existing related literature, the researcher shall provide a synthesis of the whole chapter in relation to the study.


The third part of the study shall be discussing the methods and procedures used in the study. The chapter shall comprise of the presentation of the utilized techniques for data collection and research methodology. Similarly, it shall also contain a discussion on the used techniques in data analysis as well as the tools used to acquire the said data.


The fourth chapter shall be an analysis on the tabulated data. After the said tabulation, the data are statistically treated in order to uncover the relationship of the variable involved in the study. With the said data, the chapter seeks to address the statement of the problem noted in the first chapter. The last chapter shall comprise of three sections, the summary of the findings, the conclusions of the study, and the recommendations. With the three portions, the chapter shall be able to address the verification of the hypothesis stated in the initial chapters of the study.


 


References:


Bassi, L.J., & Van Buren, M. (1999). “Sharpening the Leading Edge,” Training and Development Journal, 53: 22-33.


Bowers, N. & Swaim, P. (1994) Recent Trends in Job Training. Contemporary Economic Policy, Vol. XII.


British Hospitality Association (2002) British Hospitality Association’s Chief Executive Industry Revies—2002. Accessed at [www.bha-online.org.UK]. Accessed on [04/09/03].


Buckley, P.A. (1996). “Nonpermanent Work Arrangements and Outsourcing,” Manufacturers Alliance Economic Report, ER-388-December.


Creswell, J.W. (1994) Research design. Qualitative and quantitative approaches. Thousand Oaks, California: Sage.


Greer, CR., Youngblood, S.A., & Gray, D.A. (1999). “Human Resource Management Outsourcing: The Make or Buy Decision,” Academy of Management Executive, 13: 85-96.


Kapp, K.M. (2000). “Moving Training to the Strategic Level With Learning Requirements Planning,” National Productivity Review, 19: 27-33.


Lovegrove, N. C. et al. (1998) Why is labor productivity in the United Kingdom so low? The McKinsey Quarterly, No. 4.


Rowley, G. et al. (2003) Employers skill survey: Case study-Local and central government. Employment Studies Research Unit, Bristol Business School, University of the West of England, Coldharbour Lane, Bristol.


Teixeira, R. A. & Mishel, L. (1993) Whose skills shortage – workers or management? Issues in Science and Technology, Vol. 9, Summer.


 


 


 



 



Credit:ivythesis.typepad.com




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