CAREER DECISIONS OF (HIGHLY-EDUCATED ...

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former students of the Hotelschool The Hague (HtH) on their career paths as .... The interview started with a question about their childhood and family, next about first contact with hospitality ..... 6, Ithaca, NY: University Center for Hospitality.
CAREER DECISIONS OF (HIGHLY-EDUCATED) EMPLOYEES IN THE HOSPITALITY: PERCEPTIONS OF JOB– AND INDUSTRY CHARACTERISTICS

Arjan van Rheede Hotelschool The Hague The Hague, The Netherlands e-mail: [email protected] Rob .J. Blomme Hotelschool The Hague The Hague, The Netherlands e-mail: [email protected] Debbie Tromp Hotelschool The Hague The Hague, The Netherlands e-mail: [email protected] ABSTRACT: (max 100 words) This paper reports on the initial results of a case study on management-level turnover in the hospitality, on factors influencing the career decisions of highly-educated employees to stay or leave the hospitality. It looks from an interpretive paradigm at this issue and concludes that retaining these employees can not only be solved by HRM policy. Both personal and general career factors are important, strongly influenced by social aspects. In addition to this also (undeserved or deserved) perceptions of the actual job and industry characteristics are important in the choice to pursue a career within the hospitality industry, or outside this industry.

Keywords: turnover intentions, career paths, job- & industry characteristics. INTRODUCTION The dominant paradigm in Business and HRM research is the quantitative survey approach (Bosalie, 2005). In a study by Bosalie, Dietz and Boon (2005) about empiric research on HRM and performance, only five out of the selected 104 articles could be referred to as qualitative studies and only two as mixed studies. The most common research design was the quantitative survey method. Despite Purcell’s (1999) call for more use of qualitative methods to examine the relationship between HRM and performance, Bosalie et.al. (2005) found only a few wholly qualitative studies and even fewer that presented mixed-method results. The authors are researching the rapidly growing management level turnover in the hospitality industry, one of the major challenges for this industry is to retain highly-educated and highly-skilled employees. In this research a qualitative approach is used in which the primary data is collected in seven in-depth interviews with former students of the Hotelschool The Hague (HtH) on their career paths as alumni of our school. Especially the added value of this research approach will be discussed. What insights did this give, and how could this insight be used in other empirical studies on HRM aspects in the hospitality industry. This paper is set out as follows. The first section describes the theoretical background for retaining highly-educated and highly-skilled employees. The next section describes the study and the methodology. The following sections focus on the main outcome of the qualitative study. The account continues with a discussion on the qualitative research on retaining personnel. In the final section the authors state their conclusions. THEORETICAL BACKGROUND One of the major challenges for the hospitality industry is to retain highly-educated and highly-skilled employees. Research studies in the Netherlands suggest that management-level turnover is growing rapidly (Reijnders, 2003; Blomme, 2006). One research study amongst graduates of the Hotelschool The Hague (Blomme, 2006) has shown that within 6 years after graduation about 70% of all graduates leave the hospitality industry. More widely set-up research studies carried out in a large number of hotel organizations in the Netherlands seem to confirm this tendency (Reijnders, 2003). From an international perspective, Walsh and Taylor (2007) also suggest that retaining highly-educated staff is becoming a primary challenge for the hospitality industry. In addition, Hoque (1999a, 1999b) emphasizes the importance of HRM for the retention and the development of highly-educated staff.

This phenomenon of a growing management-level turnover rate is not only related to the hospitality industry: it is also becoming important in other industries. The changes in the employee-employer relationship are a result of the rapid changes in society and industry in the last 30 years (Ten Brink, 2004; Schalk, 2005; Torka, 2003 Although management-level turnover is inevitable, a high turnover has a significant negative impact on the productivity and profits of an organization. Hillmer, Hillmer and McRoberts (2005) suggest that the costs of dealing with a co-worker who is leaving by hiring and supervising a new replacement co-worker can amount to 70 per cent of a year’s salary. This figure is supported by Hinkin and Tracey (2000, 2006). In addition, a high turnover rate may lead to the erosion of the company’s implicit knowledge base (Coff, 1997), which is one of the important key variables for competitive advantage (Barney, 1991; Barney, 1992; Reed & DeFillipi, 1990; Lado & Wilson, 1994; Sanchez & Heene, 1996, 1997; Blomme, 2003) Other strategic streams seem to confirm that human capital is an important variable in creating added value and competitive advantage (Becker & Gerhardt, 1996; Miles & Snow, 1978). Research studies on the relation between investments in human capital and the firm’s performance seem to provide evidence that human resources are an important variable (Huselid, 1995; Delery & Dotty, 1996; MacDuffie & Kochan, 1991; Snell & Dean, 1992). Lado and Wilson (1994) argue that organizations which are unable to hire and retain highly-skilled staff will either hinder or possibly destroy the development of organizational competencies and competitive advantage. Both the specific skills of employees and the amount of trust in the employee-employer relationship provide an indication as to whether or not organizational competencies will be enhanced or diminished (Lado & Wilson, 1994; Walton, 1985; Blomme, 2003). As such, we can argue that the nature of the employment relationship is an important variable for the construction of organizational competencies and competitive advantage. They authors examined the psychological contract approach to the employment relationship with regard to the hospitality industry (Blomme, Tromp, Van Rheede, 2007). ). A survey was conducted among first-year students, graduate students and alumni of the Hotelschool The Hague. The results demonstrate that psychological contract measures, in particular job content, can explain why there is a substantial amount of variance in intention among highly-educated hotel employees with regard to leaving the organization, especially when the mediating role of affective commitment is taken into account. In addition, the study revealed that at different stages of adulthood, different additional factors may play a role when considering whether to leave the organization. Therefore, based on above standing research outcomes, it can be said that earlier research on high management-level turnover in the hospitality is mostly based on quantitative research. This is confirming the thesis of Bosalie et al. (2005) that a lot of HRM research is quantitative. These research outcomes however do not answer all the questions related to the subject under study. By using a more interpretative approach the authors are researching what factors influence career decisions of highly-educated employees to stay or leave the hospitality industry.

RESEARCH APPROACHES The theory as discussed above could be placed in the functionalist paradigm of Burrell and Morgan (1979). This paper could be placed in the interpretive paradigm, because the focus of this research is to make sense of the actions of the (future) hospitality employees. Trying to gain a deeper insight into the factors that have an influence on the decision to stay or leave the industry. The authors agree with Eisenhardt (1989) who suggests that the start of this kind of research “.. is begun as close as possible to the ideal of not theory under consideration and no hypotheses to test” (Eisenhardt, 1989, p. 536), because this might influence or hinder the outcome. METHODOLOGY The research methodology is a case study (Yin, 1994 and Stake, 1998) in which the object is defined as current students and alumni of HtH. Stake (1998) refers to this kind of case as a instrumental case, where ‘.. a particular case is examined to provide insight into issue or refinement of theory.’ The main research question is: what factors influence career decisions of highly-educated employees to stay or leave the hospitality industry? To gain more in-depth understanding in the object under study, the following group of eight highlyeducated employees from the hospitality industry related to HtH was chosen. This group, the case, was chosen

because they have known each other since before the HtH and are also familiar with each other’s careers. Moreover, this group contains a wide variety of career paths, as will be discussed in the result section later on. We used at the start of our study 7 in-depth interviews1. These semi-structured interviews focused on the career paths of alumni of the highly-educated employee. The interview started with a question about their childhood and family, next about first contact with hospitality (jobs etc) and their school career (secondary school) and the interview continued with the motives for studying at HtH and the choice for a career in the Hospitality industry. With these questions we wanted to explore the factors that influence career decisions towards staying or leaving the hospitality industry. Ethical issues have been taken into consideration, especially concerning anonymity and privacy of the interviewees2. All interviews were taped and transcribed. The data was analysed in the study starting with data reduction (coding) and continued with searching for patterns and connections in and between the interviews. After some initial preparation, such as transcribing verbatim the interviews that had been recorded on a cassette recorder in an interview report, the actual analysis began. Prior to the collection of data a roughly-scaled coding chart was compiled on the basis of the interview questions. Later, during further development and analysis, this chart was supplemented with ‘open codes’. These open codes are new codes for interesting quotes or extracts that could not be placed under the existing codes (Strauss and Corbin, 1998). On the basis of the codes and ideas which came about during this coding process (registered in research memos) ‘axial coding’ was applied (Strauss and Corbin, 1998), in this research summarised as the ordering of codes in ‘code families’. These code families are umbrella codes for codes with a common subject. In the process of searching for patterns ‘selective coding’ is applied whereby the codes and categories are reorganized to get an understand the inter-relationships between them (Strauss and Corbin, 1998). During this process data reduction and searching for patterns, specially designed software for qualitative data analysis was used. Currently there is a considerable number of CAQDAS (Computer Assisted Qualitative Data Analysis Software) available. For this paper the software program Atlas.ti (versionWIN 4.2) was used. This program offers many possibilities, but its main advantage is the ease with which sections of text can be coded, and with which they can subsequently be manipulated (renamed and grouped). In this way we attempted to create an overview of the data and searched for patterns and subjects. The quotes that the codes refer to are taken directly from the interview report. The quotes are translated verbally from Dutch to English. The makers of the Atlas.ti program are strongly oriented towards the grounded theory approach of Glaser and Strauss (1967).

RESULTS BACKGROUND There is not one straightforward career path that higher educated people in hospitality management follow. This becomes clear when analysing the data from our interview period in September and October 2005. The interviewees are a group op people who got to know each other at the secondary level hotel school (SHS). All but one continued their education and graduated at the HtH. Via one key person we gained access to the group of friends. The family background of the interviewees is not especially hospitality-related. One respondent comes from family who have their own café (1). Some of them come from a family of entrepreneurs (3a, 5, 6). At secondary school they had jobs in hospitality; two started in hotels, other in restaurants or kitchens/ lunchrooms. They all refer to these jobs as a good experience. Partly because a lot of other young people where working there and at that time it was well paid (compared with other possible jobs like ‘filling shelves’ in a grocery shop. One interview started at a well-known chain restaurant and moved after 1 year to an A la Cart restaurant where the pay was much better. So after they started at around 15-16 years if age in the hospitality they where already thinking about a career in the hospitality or decided to continue their education at the SHS. During their time at the SHS they have to do two placements. They all had well-founded reasons for choosing their placement. They got to know the business during these placement periods. Two interviewees also 1

In the near future we will continue our research by reporting on the focus group we organized with graduate students to get more insight into motives of graduates.

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There is no institutional review board present in our institute but ethical issues of the research study have been taken into consideration.

met their mentor (the GM of their placement hotel) who helped them with a next step or let them use their network to find a good next move. These people also encouraged the interviewees to continue their education at HtH. After finishing the SHS one interviewee decided to start working: while most of his friends continued to go to HtH. The motive to continue their education at HtH was because they felt that they could achieve more. Two continued with their Masters after graduating the HtH, one in hospitality and the other in marketing. Table 1: Hospitality status of respondents Current (2005) Inside hospitality 3 (2 male, 1 female) Outside hospitality 4 (1 male 3 female)

Future (2010) 1 6

(1 male) (2 male, 4 female)

Table 1 shows the current (2005) situation in their working career inside/outside the hospitality. Three of the respondents have been working in the hospitality since their graduation from HtH. One of these persons is on his way to a GM position. The other two are thinking of leaving their current job and moving outside the hospitality sector (to a financial position outside hospitality and working as a travel manager with a multinational). The other four worked after graduation in the hospitality, but have since changed and are now working in real estate (family business), education and detachment of banking and insurance staff, and as a stewardess/ administrator. ANALYSIS The following code families3 have been constructed and will be used for the next step of the analyses: 1. Career: this family code comprises motives and experiences of respondents when decisions are made about career issues by choosing to work for certain school, placement, specialisation or leave or staying with an organization 2. Characteristics of hospitality: this family code comprises organisations/ sector characteristics such as working hours, payment and hierarchic organization; job characteristics and social working conditions: such as high turnover, young colleagues, teamwork etc. 3. Motivation job/ education: this family code comprises choice (or not) for other field/ specialisation, Masters, did not know what else, career possibilities, opinion on labour market, dream job, salary as driver. 4. Social aspects: this family code comprises consideration of work versus continuation of education, opinion / experience on a field of studies, type of students, personal relations (follow partner). Making decisions on ones career is clearly not done in isolation. The opinion and experience of friends and family are important in this matter. With these code families the following patterns have been found on staying or leaving the hospitality business. ‘keeping options open and finding new fields of interest’ People are well aware that HtH not only educates for the hospitality industry, but that it is also is good starting point for a business career. Stereotype examples are banking and insurance organisations that are really searching for graduates of the HtH. During their education at the SHS they have already been introduced to new fields (such as marketing or finance, interviewee 1 and 8). After the SHS one of the respondents started on a marketing study first, before coming to the HtH after finishing her first year. The pattern that we can see is that students in the early phase of their career develop and learn new fields, thereby redefining their future career. This is also true for graduates of the HtH. After graduation they do a MBA or a masters in Marketing. The first as an example of ‘keeping all options open’ and on the other hand a form of specialisation in a new discovered field of interest.

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Next to these there are also code families on Childhood family, Remarks on education HtH/Selection, Impact of education HtH on career Hospitality.

Setting a goal Some people have formulated a clear career path (including a milestone), as stated by one of the respondents: “Once I was at the SHS it soon became clear that I wanted to work in hospitality... “ And it also was clear he had well-formulated career goals: (GM before I’m 30), for he says : My goal was always to be Hotel Manager. And I still want to achieve that. I get offered jobs from time to time, but I want to move straight on towards my goal. For example, I get offers from Sales - I am quite commercial-minded. And then … head office asks me whether I would like to come and work there. Quite interesting positions, but a side step for the whole chain. It’s an attractive offer but it would endanger my whole career. ( 2:15 (125:136)

‘bite the bullet’ Making a career in the hospitality is hard work and people have to put a lot of effort in the job. It’s a matter of how much you are prepared to do. It’s all up to you. You reach a point when you are giving a great deal for a relatively low salary (that’s biting the bullet). And once you’ve got past that you’ll be alright. That’s the reality. I think there are enough career possibilities, but there is a limited number of people who are prepared to bite the bullet. And I think that’s the reason for people leaving the industry. Because you’ve lost the sense of proportion! The starting salaries aren’t all that bad. But all those stories of people working outside the hospitality business make things difficult, because there comes a time when (if you’re young) you fall behind. A: is that something the hotel world wants to keep like that? No, they don’t. Young people get out quick. But you can’t do anything about it (as far as salary is concerned). Prices are under pressure and you can’t raise those salaries. They are not fixed artificially. ( 2:19 (188:205) and .. …. was F&B-manager with NH hotels for six months, directly after leaving HtH. That was hard work for little money. The shift work is also a disadvantage. The hotel and catering industry is the only sector where overtime is considered ‘normal’; this was named in one breath together with making a career. I found everything splendid in the beginning too, but when you’re young you find it appealing. But later, when I reached the age of 28, I wanted to have the weekends off. I also wanted to have sight of growth, materiel and immaterial. (3:11 ( 51-56) Decisions on career paths are very personal, but a pattern can be seen. On one side you can see people who have made a decision and will not be distracted from their goal. But a larger group have preference for a certain direction, but like to keep options open. This group is not prepared to go all the way to reach the top. They easily leave the hospitality to continue their career outside the hospitality, or develop new interests and slowly move away from hospitality. The decision to stay or leave (or not start) in hospitality also has to do with characteristics of the hospitality business. Although it is obvious that each hotel (and chain) is different, there are common characteristics among them. The way these characteristics are perceived by the interviewees differs. This is seen as a process of making sense of and giving meaning to these characteristics and results in different outcomes. ‘Guest focus’ These aspects sounds a little stereotypical, and again are interpreted in different ways. There is a great focus on the guest and this makes the work differ: a lot is going on, and the primary working process is really visible. Some interviewees experience a lot of hierarchy in the hotel organisations, in where the work is really organized. This means that departments are run like little islands where the different domains are strictly separated. ‘Low payment’ This is about job characteristics. The judgement on the variety in work is ambiguous. Some interviewees find the job variety low, while others find the job variety high, because everyday is different. The first group refers to activities, while the second group refers more to the surrounding and the concept, which is hectic and differs. Most interviewees refer to the low standard of condition of employment and the low payment. The people who stay have an understanding for this situation: to make a profit in the hospitality business the business should be

really efficient; there is not much room for high wages and nice fringe benefits. The ones who have left the hospitality industry found better conditions outside the sector. In addition to that there seems to be a big difference between the working conditions in the ‘back of the house’ and at ‘the front of the house’. The first badly organised and messy while at the front everything is looking smooth and polished. Finally interviewees also explain that the starting positions are relatively low. The interviewee who started working after the MHS was higher or at the same level as his peers who continued their education at the HtH. He is now a real specialist in his field with only a small chance of making promotion. ‘Flexible working hours’ What about the social and working conditions? The hospitality is a sector with a high turnover and a lot of young people are employed in it. The first contact as an employee with the hospitality business is for most interviewees during secondary school. So it is then, as when you graduate well to have a lot of young people/good colleagues around. People also refer to the teamwork which is judged positive in the hospitality industry. The issue of flexible working hours is summarized as: some love it, others hate it. But once people get older this is judged as a negative side effect: … But later, when he was 28 years of age, he wanted to have the weekends off.(3:11, 54-55. Especially females refer to the work-family balance when talking about the flexible working hours: I just don’t believe that I can grow old here …..Look, at some point I also want a family with children and it will be a lot harder. I just don’t believe I just don’t believe I will be able to find what I want in my work. I am ambitious, I want to go for it, make a career, it’s a kind of motor, that singlemindedness. But well, I simply don’t believe it’s possible in the hospitality business. (1:41, 461:473) and …. And if you find your prince on the white horse, you take a step back. I just don’t believe you can then continue to make a career for yourself. … For example, a girl friend of mine .. took a step back by going to work part-time. If that’s your ceiling, then I think it’s very quickly reached …… I think that ultimately you can achieve more at management level in the business world and that I can combine that better with a family. (1:42, 474:491) What is evident is that the same points are seen as opposites. Working hours is a simple example. While one respondent gives this as the reason to leave, another person who also leaves her job in the hospitality, says: ‘. The hours are not a motive: I like flexible hours: I’m not looking for a 9 to 5 job (4:21, 121:122)’ DISCUSSION The new insights that this research study shows are that looking at HRM issues as the motives behind staying or leaving the hospitality industry generate useful insights when using a more holistic approach. Not only job and organizational characteristics are of the utmost importance, but the decisions of highly-educated employees in the hospitality industry are also based on aspects which are not controlled by HRM policy. The fact that a certain group of students start their education at an institute for hospitality management with the intention not to work in the hospitality business is important to remember. Especially when searching to solution within perception and actual working conditions in the hospitality industry. To reach the top within the hospitality industry is pictured as ‘biting the bullet’ and putting a lot of effort into one’s work. This seems to be a important reason why people decide to leave the industry. They experience career change opportunities as being better in other industries. The point of flexible working hours is, partly combined with this last point, an important point ones employees get older and especially for females. The work-family balance seems to be difficult point for the industry to retain highly-educated employees. A strong point of the industry is the focus on guest/hospitality and its focus on this primary process; this clearly is important to attract and to retain employees. In this study it became obvious that with an interpretative perspective on career paths: the decisions the young professionals took are not only based on actual knowledge on certain situations but also on impressions and images of a sector or certain positions by friends/peers and other people in their social context. On different occasions the interviewees would state more or less the same as some of their friends. This might also have far-

reaching consequences for HRM policies: changing job conditions in the organization will not change the perception about certain jobs, because the image and stereotype stays. The reporting of this study focused on why staying/leaving the hospitality, but other issues such as the education process at HdH is also discussed. The research undertaken so far is only a first glance at the role of career paths on decisions to stay or the leave the hospitality industry. An issue to be considered is also the perception on which jobs a within the hospitality industry and which are outside it. This study and an earlier study indicate that alumni sometimes refer to this distinction in different ways. For instance working as cabin crew in the airline industry has everything to do with hospitality, but does it belong to the hospitality business? Another example is working as a business or IT consultant for the hospitality business, the topic is clearly in line with the industry, but the working conditions are quite different. More in-depth data should be gathered and other subgroups should also be researched, because the data collection was only with a subgroup of the case. As stated before, the qualitative study needs follow up interviews to explore these patterns further and also other subgroups of highly-educated employees and other stakeholders should be included. Although the researchers only focused on the outcome of the interviews, it was impossible to separate one’s own experience completely from this data, as the authors have been working at HtH for several years and as such are actors in the field of hospitality, and have experience with the students and the graduates. This results in a lot of tacit knowledge which may be used when interviewing, but moreover during the analyses of the data. CONCLUSION The outcome of this paper gives a first insight into the motives of a certain group of highly-educated employees: namely those who first went to the SHS and then continued their education at HtH. Other groups of highly-educated people might show the same patterns, but it is likely that there will be differences between this group, our regular Dutch students our group of international (fast track) students. We do however feel that the choices described in this group and their experiences with the hospitality are recognizable and exemplary for a larger group of highly-educated people in the hospitality industry. Both personal and general career factor are important, strongly influenced by social aspects. In addition to this, also – deservedly or undeservedly - perceptions of the actual job and industry characteristics are important in the choice to pursue a career within the hospitality industry or outside this industry. Therefore an important issue is to follow the right purposive sampling strategy (homogeneous, heterogeneous or extreme case sampling etc.) Coincidentally taking an in-depth strategy right, but it may lead to unwanted outcomes. Follow-up research should expand these patterns and help find solutions for the issues raised in this paper.

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