How to Rebuild Your Hospitality Talent Pipeline

The hospitality industry has undergone significant challenges over the last four years, including Covid-induced supply chain issues, inflation, geopolitical concerns, accelerated tech change, changing consumer expectations, shifting workforce demands and shrinking labor pools.

Because of these interlocking factors, there has been a fundamental change in how people view hospitality work, particularly in the US. This is partially due to the changing conversation around higher education—as more and more organizations emphasize the importance of a bachelor's degree, even for entry level roles, the cultural attitude towards working in the hospitality industry has shifted. What was once viewed as a viable long-term career path is now often seen as a temporary stepping stone into one’s full-time career.

These factors have significantly impacted talent retention at the leadership and employee level. According to our latest Global Leadership Monitor, a significant 70% of hospitality leaders said they would be willing to leave their employer. Even more concerning, 68% agreed that they would be open to making a move beyond hospitality as an industry (Figure 1). This is 17pp higher than the global average and 8pp higher than the broader consumer industry—suggesting that hospitality is at the precipice of a leadership deficit.

Figure 1: Leaders’ likelihood of making a career move – hospitality vs all leaders

^{Source: Russell Reynolds Associates H1 2024 Global Leadership Monitor, n=2,716 global C-suite leaders, and next gen leaders; n=415 Consumer leaders; n=48 L&H leaders}

What’s causing this talent shake-up in the hospitality industry?

In a word: culture.

Of course, the actual answer is much more nuanced than one word allows, involving many of the macro factors noted above. Still, when we asked hospitality leaders why they might be willing to change employers, the top response was “a desire to feel more valued by my organization.”

Leaders who don’t feel valued are unlikely to have a positive outlook on their organization’s culture and their personal development opportunities within it. And indeed, hospitality leaders have rather dismal views around organizational culture, with only 40% agreeing that their organization has a culture that effectively retains top talent, only 41% agreeing that the way that top leaders view culture is consistent with how employees view culture, and 47% agreeing that their organization’s culture supports their future strategy (Figure 2).

Whether it’s a reaction to the macro external factors noted above, a response to internal culture and development issues or a combination of both, it’s clear that hospitality organizations need to better understand their cultures to improve retention at the top.

Figure 2: Hospitality leaders views on their organization’s culture

^{Source: Russell Reynolds Associates’ H1 2024 Global Leadership Monitor, n= 53 Leisure & Hospitality leaders}

Six steps to rebrand hospitality for the future

To address retention concerns and refresh the hospitality talent pool, hotels and other hospitality organizations should consider the following:

Rebrand the hospitality career path

Entry-level hospitality jobs, particularly in the United States, are rarely viewed as part of a longer career path. To address this, hospitality organizations should get involved in high schools, colleges, community programs, etc. so the workforce of the future understands the opportunities within the hospitality industry. 

Define and communicate leadership development pathways

Our Monitor shows that, while 86% of hospitality leaders want to take on more responsibility in the next two to three years, only 43% see a clear path to a larger role that would provide said responsibilities. Ensure that development programs are clearly articulated and communicated to everyone in the organization—even your leadership team. Investing in leaders’ development plans via targeted accelerators, mentorship and sponsorship programs, and targeted accelerators will help retain top performers. 

Develop succession plans at every level

Build success profiles by level, focusing on the capabilities and behaviors leaders need to deal with in their specific environments, as well as competencies needed to meet the challenges and opportunities faced by the broader industry. Hospitality leaders should also consider potential successors beyond their corporate employees. Determine if there are opportunities for on the ground employees (e.g., on-site managers) to move into corporate roles and help these individuals succeed by creating structure around those development pathways. This will ensure that succession plans extend deep into an organization and can help mitigate potential leadership deficits. 

Examine your tone from the top

While culture change requires agreement at every level, meaningful transformation requires ownership from the top. Strong leaders are well equipped to support an evolving culture, but if the tone from existing leaders—especially the CEO—conflicts with organizational mandates and employees’ culture perceptions, even world-class leaders are unlikely to make meaningful progress.

Manage culture as a material asset

The culture you have today is a complex operating system – you can’t expose every hidden truth at once. Explore whether your culture supports your strategic direction and, in doing so, apply the same discipline, resourcing, and focus as you did when setting said direction. Dedicate resources and effort to understanding your situation through focus groups, interviews, and less conventional data sources that might contain tough messages. Consider tapping into recent advancements in culture measurement that evaluate how leaders act and what people believe, utilize unique question formats that check for specific issues, and reveal hard truths about an organization.

Allocate resources and investments towards cultural practices that support wellbeing

Our recent research shows that employees with high wellbeing are significantly more likely to report clarity around their work environment. Ensure that employee wellbeing (or related outcomes like engagement and retention) is incorporated into the objectives of senior leaders and managers, and allocate resources and investments towards cultural practices that support wellbeing at every level.

Authors

Leah Christianson is a member of Russell Reynolds Associates’ Center for Leadership Insight. She is based in San Francisco.

Sotiria Pericli is a member of Russell Reynolds Associates’ Consumer Knowledge team. She is based in New York.

Hoda Tahoun leads Russell Reynolds Associates’ Leisure & Hospitality Practice. She is based in Miami.