Managing diverse staff is critical for hotel success

In recent years, the cut-throat hotel industry has faced growing competition from travel sites and Airbnb bookings.

So who would have thought the ability to depend on a multicultural workforce would be just as important for business success?

Staff turnover rates in Australian hotels can reach up to 40 percent and popular chains are increasingly relying on a multicultural workforce to get by – so the way managers integrate employees is becoming more important.

Previous research by Flinders business academic Dr Ashok Manoharan looked into whether the way management treats multicultural staff is a key ingredient in a hotels success – and guess what? That’s most certainly the case.

Dr Ashok found that having staff from diverse backgrounds has plenty of benefits – including their capability to speak to foreign guests in their own language; migrant workers are perceived to have strong ethics and quality ideas in how a hotel is run.

Now, Dr Ashok’s research has analysed whether management styles tailored towards a multicultural workforce also lead to a culture of innovation and financial effectiveness in hotels, if they’re implemented correctly.

“Informal training such as a buddy system, and additional feedback can help ethnically diverse employees understand the job better, which in turn facilitates greater innovation,” says Dr Ashok

“The objective of this study was to understand the relationship between informal management practices and outcomes – financial effectiveness and innovation, in the context of ethnic employees in Australian hotels.”

In a high turnover industry- recruitment, training, and performance appraisals specific to multicultural workforce are ad hoc, needs-based activities which usually don’t fall into their scope of formal policies through a HR department.

“Managers adopt informal practices in the absence of formal policies and legislative guidance or sometimes in association with them.”

Aerial view of hotels in Gold Coast, Australia

So what kind of policies lead to a culture of innovation?

“The study found a positive relationship between informal identity conscious practices and the innovation and financial effectiveness of a hotel.”

Put simply, informal practices should be utilised and maintained in the long term to achieve the best business outcomes.

“These practices may not be sustained when a manager who initiated them leaves, possibly reducing the potential for competitive advantage in the long run. A key practical implication is to sustain these practices. When hotel managers find these informal practices are effective, they need to document them.”

Recruitment should also be undertaken through appropriate methods, says Dr Ashok.

“For example, there are a number of ethnic newspapers in Australia where hotels can consider publishing job advertisements to increase proportions of ethnically diverse employees.”

 Dr Ashok regularly shares his research with Australian hotel industry groups to help facilitate more effective business practices.

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