As companies across the hospitality and leisure industry experience steep declines in consumer demand and encounter substantial roadblocks in raising capital, the need to match the right leadership team with the right skills is all the more critical.
Increasingly, boards and executives recognize that they need to think more broadly about how to attract top talent and where to find it. This includes looking outside the sector for executives who can bring fresh thinking to what has been a considered a relatively traditional industry.
The benefits of “cross-fertilization” appear most dramatically in the real estate development and marketing arenas. Executives who can source, negotiate, structure and finance creative deals and devise complex contracts to manage properties have been in high demand in the hospitality industry for some time. During and beyond the economic crisis, those deal-making skills will become ever more critical as companies evaluate their optimal property portfolios.
While real estate development professionals from the hospitality industry traditionally have had accounting or consulting backgrounds, the analytics and deal structures typical today and in the foreseeable future require a different financial skill set. One solution is to look for talent outside of the hospitality sector itself. Executives in banking and at large funds that own properties have the strategic skills that hospitality companies seek. The balancing act is to find candidates with the required competencies who also have the leadership skills needed to manage large organizations and work cross-functionally. Bankers are often accustomed to working in small teams, whereas the development function in a large hotel company often comprises hundreds of people.
Hospitality and leisure companies also want to infuse new thinking in marketing as they look to build capability in emerging channels. Because customers increasingly get information and execute transactions over the Internet and their cell phones, these digital channels are changing the structure of both direct marketing and customer relationship management. Many companies are seeking executives with expertise in promoting and building businesses via digital media. More specifically, they are increasingly interested in marketers who have developed cutting-edge programs in which consumers experience a brand through many touch points.
International markets present another mismatch between the experience needed and experience available in the hospitality sector today. Hotel and restaurant development has been growing rapidly in many regions around the world, particularly in Asia. These companies are looking for executives who have lived, worked and effected change in international markets. Even in filling US-based roles, they seek executives who have the potential to take on international assignments or influence a global agenda.
The market for executives with global hospitality experience is hyper-competitive and companies are looking for candidates who understand how to navigate the strategic and tactical challenges of operating in global, multinational environments. These candidates must be comfortable communicating cross-culturally and be able to remain well connected in multiple markets.
Going uutside the industry
In seeking external talent, hospitality sector companies must demonstrate to candidates from other industries that they are committed to cultural change and new ideas and are not merely dabbling in change. Like many industries, the hospitality industry has historically tried to replicate past successes, versus engaging in a wholesale reinvention of its practices and operations.
Further, they must be able to structure creative compensation packages, since these top candidates are often recruited from companies that offer cash incentives and equity components that more traditional companies typically can’t match. But given the changing values of equity, candidates are displaying openness to transitions and flexibility on compensation structures that they might not have previously. The talent needs that are emerging in many functions within the hospitality and leisure sectors pose significant challenges for recruitment. Given the additional economic challenges, our clients are more receptive to considering cross-sector, multi-functional solutions to sourcing new talent. This allows them to take advantage of this cycle to re-evaluate their current executive teams and future talent needs, rethink the “emerging” skills that will move them ahead of the competition and access executives who might not have been on their radar or had an interest in engaging only one or two years ago.