Why investing in human capital is crucial for tourism sector
It is without doubt that the tourism industry is one of the most affected by the coronavirus pandemic as strict travel restrictions have been imposed by nearly all countries and lockdown restricting congregation of merry makers and business conferences in hotels. This has resulted in the closure of many outfits.
According to the World Travel Tourism Council, globally, 109 million people work directly in the travel and tourism sector not just as chefs, receptionists, pilots and tour guides, but as accountants, designers, and engineers for tourism companies and many others.
As soon as the pandemic struck, most of these jobs were lost. Kenya Private Sector Alliance data shows at least 3.1 million jobs in travel and tourism were affected in 2020 as hotels, bars and restaurants, tour operators, airlines, travel agents and their suppliers recorded low business. And most hotels saw the move as a means of cutting costs.
However, tourism experts in sustainability are questioning this model of cost cutting and viewing employees in the sector as a liability rather than an investment.
“We need to rethink human resource capital since it is an intangible asset that any organisation can have.
We need to transition from just looking at the skill set in terms of the number of years and the level of education, work experience and aptitude to how much creativity and innovative capacity the work force has, their risk attitude and abilities as well as their entrepreneurship capacity as well as social and emotional skill of the workforce,” explained Dr Fredrick Oduori of the School of Tourism and Hospitality, Strathmore University during a recent virtual event, Sustainable Tourism Africa Summit 2021.
Shift in perspective
Under the sub-theme, Reinforcing Human Capital for Sustainable Tourism in Africa, the sustainability experts looked at ways of building tourism resilience in Africa and what path the industry should take after the pandemic.
“When an organisation loses a workforce, they don’t save costs, they lose all that which has an effect on the business and entrepreneurial performance,” he added.
Dr Fredrick said that when hotels perceive the human workforce as a resource, it equates them to money or materials acquired by the organisation and used for the proper functioning of the organisation.
That means that whenever they experience challenges, the easiest thing is to look at the human resources as a cost.
“You’ll find a lot of retrenchments, downsizing and restructuring that tries to minimise the cost of doing business.
We need a shift in perspective to see the workforce as human capital. That what we have is actually a collection of skills, knowledge and experience that is collected in the workforce and is invested in the proper running of the workplace,” he noted.
Since 2012, Kenya has been on the growth trajectory path until the pandemic shook the industry.
The sector is one of the leading sources of foreign exchange earner, earning Sh163.56 billion ($1.54 billion) in 2019, and which had been expected to grow by one percent in 2020.
Tourism contributes 10 per cent of Kenya’s annual Gross Domestic Product (GDP) and employs over two million people.
Most destinations are working tirelessly and coming up with strategies that will revive their former glory.
According to Dr Fredrick, all this strategies will fail if the destinations and companies don’t factor in human capital to enhance their effectiveness.
He said the human element is important for service quality, customer satisfaction and loyalty, competitive advantage as well as organisational and industry performance.
The service industry is set apart by the caliber of human capital that the organisation has.
There is a clear relation between the quality of human capital and the business results and strategies.
“Due to the volatile nature of the business, some of the critical skills that the work force within the industry needs to have, include analytical thinking and innovation, active learning and listening strategies, complex problem solving skills, creativity , originality and intuitiveness, leadership and social influence,” he explained.
Machine-centric to humanistic
“Do we need to be reactive based on the events or can we be able to pull the capacity of human capital to be anticipatory or entrepreneurial and work around changing circumstances?
All these are capabilities that are domiciled within the human capital within the organisation,” he offered.
He added: “We are in a time in history where humanity has been forced to move towards the system in which people look at economic governance and productivity much more from a humanistic perspective instead of a machine-centric perspective.
When we look at the human capital, we need to look at its contribution to the organisation’s performance and within the tourism industry human resources is the intellectual property of a hotel or camp.”
Negotiated with banks
Sustainable tourism advisor Judy Kepha Gona said the pandemic has exposed a lot of issues on human resource that need rethinking if there will be progress in the industry.
While it was inevitable that places would shut down, measures governments took were important in sustaining the businesses and employees during the pandemic.
For instance, there were countries where governments supported the businesses and continued paying their employees while they were away from work even up to 12 months making it easier on the businesses.
Others set up measures and negotiated with banks, especially on loan repayment and tax payment for businesses so that they could retain some income and pay the employees.
Others also received government economic stimulus in various ways including cash.
In Kenya, the Ministry of Tourism set aside Sh500 million to assist the industry to recover from the pandemic.
Part of the money was to be used in restoring the confidence of the destination and ensure that Kenya still remains a destination of choice. But despite all that, the industry is still struggling to recover.
Judy says some of the employees went from income in one month to none. There are some who were immediately sent home without any pay and told that they would be called back when business resumes.
These vulnerable groups of employees make a large percentage of employees in the tourism industry.
“There is an association that seeks to negotiate with the employers on fair wages for the employees and great labour practices.
Not all employers are members of this association as there are allegations that some employers stop their employees from joining unions, which is unfair,” she noted.
She notes that human capital is a resource that needs to be boosted and grown like any other thing that grows a business.
If anything happens and costs are being reduced, they should not be the first casualties.
“If we are truly responsive, if we want to do something about decent work, public and private sectors can sit down and have a review of human capital in tourism,” she said.