INSTANT: How the pioneering platform will provide solutions to the ongoing problem of labor shortage in the hospitality sector

The problem of labour shortages in the Hotel industry is not a new phenomenon, however, the problem has become even bigger in the last two years, as this sector has faced its biggest crisis to date. The biggest challenge in the post-Covid 19 era is hiring and retaining skilled hotel staff. What is different this time is that labour shortages seem to be happening at the same time as high unemployment rates. With so many unemployed people, it is easy to assume that it would be relatively easy for employers to hire the right candidates. Unfortunately, this is not the case!

According to the Eurostat 2021 report, unemployment rates are quite high and it is estimated that 15.278 million men and women in the euro area were unemployed in May 2021. In Cyprus, unemployment rose to 9.9% in 2021, equal to 45,000 people (Eurostat, 2021). The paradox is that, while there is a shortage of specialized staff, the Cypriot hotel industry is investing in infrastructure, more hotels and tourism projects throughout Cyprus, resulting in the creation of new jobs and the demand to exceed the labour supply (Efthymiou, 2018; Chrysostomou, 2017).

For the first time, in collaboration with stakeholders in the hotel sector, research is currently being conducted, to reveal the roots of the problem as well as to provide tangible solutions. INSTANT (Intelligent Platform for Providing Staff and Training in the Hotel Industry) is a project co-financed by the European Regional Development Fund and the Republic of Cyprus through the Research and Innovation Foundation and one of its objectives is to provide a solution to the ongoing problem of labour shortage. 

The INSTANT project will also deliver a research study that will reveal the challenges related to human resources in the Cyprus Hospitality industry. 

The research is conducted by the Research Foundation of the University of Nicosia and Ernst & Young and by the end of 2021 will be distributed to all stakeholders in the industry, an information report on the Hospitality Sector. The data were collected through the use of online questionnaires, personal interviews and focus groups with the participation of Hoteliers, Hotel Managers, Owners and Human Resources Managers. This in-depth qualitative and quantitative research covers all registered accommodation facilities in Cyprus and for the first time on the island, we will have an overview of the real scale of the problem of labour shortage in the hotel sector in Cyprus from an industrial point of view.

The data collected from a representative sample covering more than one-third of all accommodation facilities on the island revealed some interesting results that support the main concern of the INSTANT project. Therefore, the creation of a pioneering digital platform that will offer smart solutions to address the obstacles faced by the hotel and tourism industry in Cyprus, is essential.

Human Resource Management in the hospitality industry is a difficult task, given the range of positions. The quality standards of the services provided by the hoteliers have a direct impact on the image and reputation of both the hotel and the destination. Hiring and choosing the best "marriage" for a hotel job is of utmost importance for the successful delivery of the products and services offered by a hotel.

One of the key issues facing the industry is the high turnover, with the pattern has changed, not only for young employees with less than 5 years of experience but also for employees who have invested in a hotel career. The biggest problem is the dependence on seasonal staff as their number, in some cases, reaches 50% of the staff. The seasonal staff is mainly from Greece and the countries of Eastern Europe as well as from universities and technical schools. Hotels use a wide range of recruitment methods, including job postings, word-of-mouth referrals, college/university meetings, collaborations with international recruitment agencies, and local social media advertising. This recruitment model was the only solution for hoteliers and accommodation providers, but there is general recognition and search for sustainable solutions. The time and money they invest each year increases without having the desired results, and the coming years will be even more difficult as the cost of staffing from abroad will be even higher.

Still, the struggle to meet labour needs continues after hiring, as the majority of seasonal staff are not trained for the specific roles assigned to them. As the demand for staff increases and the supply decreases, hoteliers focus on the personality and character rather than the skills of the candidates. The current efforts of the industry to meet current and future needs through recruitment, job fairs and existing platforms associated with all major hotel accommodations worldwide, create inadequacies and huge time investments without the desired results. The Cypriot Hospitality Industry hardly accepts new means of recruitment that would support human resources. The adoption of new and more effective human resources practices are a driving force for the financial viability and viability of the hospitality industry. The real competitive advantage in the Hospitality industry is its People!

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