Global Talent Trends and Issues for the Travel & Tourism Sector

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Final Report - January 2015

Global Talent Trends and Issues for the Travel & Tourism Sector

January - 2015

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A report prepared by Oxford Economics for the World Travel & Tourism Council

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Contents


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Foreword

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Introduction

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Human capital issues in context

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Talent demand-supply balance and enabling environment analysis

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Economic cost impact of talent gaps and deficiencies

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Annex A

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Annex B

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Annex C

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Annex D

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Foreword The World Travel & Tourism Council (WTTC) is the global authority on the economic and social contribution of Travel & Tourism. It promotes sustainable growth for the sector, working with governments and international institutions to create jobs, to drive exports and to generate prosperity.

At a global level, the research shows that the industry is facing a shortfall of 14 million jobs – that is equivalent to the population of Cambodia – and stands to reduce its contribution to global GDP by US$ 610 billion over the next ten years, 5.8% less than our baseline forecasts.

Members are the Chairs, Presidents and Chief Executives of the world’s leading, private sector Travel & Tourism businesses. These Members bring specialist knowledge to guide government policy and decision-making, raising awareness of the importance of the sector as an economic generator of wealth.

This research also shows that Travel & Tourism’s Human Capital challenges are significantly higher than those faced in other sectors, with 37 out of 46 countries showing a talent ‘deficit’ or ‘shortage’ in Travel & Tourism over the next ten years, compared with only 6 out of 46 for the economy as a whole.

Over the next ten years, WTTC’s forecasts project that Travel & Tourism will contribute US$11 trillion (US$3.4 trillion directly) and support 347 million jobs around the world (126 million directly – over 25 million more direct jobs than in 2013). The growth in Travel & Tourism employment, at over 4% per year for the next ten years, will bring about enormous development across the world. Our research shows however, that without the right policies in place now, some countries are likely to have large gaps that will make it difficult, if not impossible, for them to fulfil their growth potential.

The situation is more pressing at the lower educational attainment levels, i.e. unskilled labour, and the impacts will hit in the next five years. This is a problem which needs to be addressed now.

WTTC is pleased to produce this report on Global Talent Trends and Issues for the Travel & Tourism Sector that for the first time, quantifies the scale of the Travel & Tourism talent problem. It highlights the economic impact that the HR challenge will have on the global economy if not addressed soon. It looks at the scale of the problem (‘the talent deficit’) in 46 countries and then assesses how well placed these countries are (‘the enabling environment’) to address the challenges they face. A combined ranking of the talent deficit and enabling environment highlights those countries where Travel & Tourism is most at risk from human capital issues over the next five to ten years, and those which will likely be able to manage future growth.

WTTC urges the industry – both public and private sector – to act now to address the anticipated talent shortage. Travel & Tourism has the power to create jobs across the economy - at different skills levels, for often marginalised sectors of society such as young people and women, and in areas where other opportunities are scarce. We are a people industry – we depend on quality people to deliver a quality product – and we need the right policies, programmes and partnerships in place to ensure that the workforce of the future knows about the opportunities in our sector, and has the appropriate skills and knowledge to support future growth. In the years to come, progress in developing and retaining talent will require a much stronger and more co-ordinated effort between the private sector, educational establishments and government. WTTC and its Members will be at the forefront of this debate, discussion and action to ensure the continued strength of Travel & Tourism.

David Scowsill President & CEO World Travel & Tourism Council

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Introduction

The rapid pace and extent of change in global and national markets for talent will be significant across the economy as a whole and specifically for Travel & Tourism. The market for Travel & Tourism talent is already challenged with high staff turnover, competition with other industry sectors for the best people, and in some cases, adverse supply trends such as declining demographics. New regulations, new technology (which in some cases is squeezing out existing roles and creating demand for new roles), shifts in customer service preferences, changing visitor markets, as well as other industry drivers, all have the potential to transform the type of skills that employees in Travel & Tourism will need to possess in future and employers will need to train staff in. Planning for and meeting future talent demand in Travel & Tourism is going to require companies and governments to implement and promote proactive and careful talent supply management policies and together with education, develop stronger and more coordinated talent efforts. A thriving Travel & Tourism sector will also require regular monitoring and projecting of talent demand, supply and imbalances to predict in advance any looming shortages. Although there are many talent commonalities facing the Travel & Tourism globally, the talent environment is far from uniform across countries for demand, supply and imbalances, and the enabling talent environment. There is huge diversity across countries in terms of the general development and maturity of Travel & Tourism and the stage they are at in the sector’s growth cycle. So an understanding of the talent picture for different countries is vital as a ‘one-size fits all’ analytical picture and policy response will be incorrect and ineffective. Understanding the sector’s outlook and issues will be crucial if Travel & Tourism is to realise its growth potential over the next decade.

Travel & Tourism is one of the world’s largest economic sectors. Current global Travel & Tourism direct employment is over 100 million jobs (103 million jobs, 2014 forecast estimate1). Global Travel & Tourism direct employment is forecast to grow at a faster pace (2.0% pa) than most other major industries and the global economy employment average2. This is a result of a number of factors including the ongoing structural transformation from industry to services in advanced and emerging economies and the growth of the middle class globally resulting in changing consumer patterns favourable to Travel & Tourism. In fact, many countries have even more aspirational growth targets than assumed in the WTTC baseline scenario which would require Travel & Tourism direct employment to grow even faster. For some of these countries, given the analysis in this report, these aspirations will be very difficult to realise given the projected talent trend deficits.

Source: WTTC annual economic impact research, March 2014 2 Source: WTTC annual economic impact research, March 2014 1

It is against this backdrop that WTTC commissioned Oxford Economics, one of the world’s leading providers of global economic analysis, advice and models, to conduct this research on 46 countries. The countries are geographically diverse, encompass all of the world’s major economies and include countries such as Barbados, Morocco and Thailand where Travel & Tourism is a particularly important sector. The 46 countries account for 81% and 88% of direct world Travel & Tourism employment and GDP respectively.

In the long-run economy-wide growth projections are constrained by the economy’s long-run potential output, which depends, among other factors, on the long-run labour supply. Although sector-level demand projections are less directly constrained by overall labour supply on the general assumption that demand for labour will be met from within the wider economy labour pool.

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1.1


Why talent matters: Negative impacts of Travel & Tourism talent gaps and deficiencies

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The projections for Travel & Tourism direct employment from WTTC’s annual economic impact research are based on top-down macroeconomic domestic and international demand projections, linked to Oxford Economics Global Macroeconomic Model3 and Tourism Economics Tourism Decision Metrics Model. These demand-orientated growth projections for Travel & Tourism employment, however, implicitly depend on a sufficient volume, availability and quality of talent supply, which can be retained within the sector. If this is not the case, countries will struggle to realise these growth projections.

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In practice and over the long-run, there is no guarantee that each country’s Travel & Tourism demand for talent will be met by its domestic supply (and external supply). Nor is it guaranteed that a country’s Travel & Tourism talent base will be compatible with the level of competitiveness needed to compete internationally and achieve the projected international demand growth.

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Talent labour shortages, where many hard-to-fill vacancies go permanently unfilled, lead to below-potential employment levels and growth in the near-term and foregone investment and growth in the longer-term.

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Talent vacancies, which in many cases may only be met by raising pay levels substantially and attracting staff from other sectors, lead to higher company operating costs and reduced profits in the short-term, and eroded competitiveness and weaker growth and investment in the longer-term. An alternative solution to filling these vacancies could be promotion of staff within the sector before they are ready to proficiently fill these roles. The impacts of this are different but again tend to be negative.

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Talent skill gaps amongst existing employees, where positions are filled by under-qualified and under-experienced staff, lead to inferior customer service and quality standards, and create a host of other HR challenges.

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Talent gaps, where migrant labour has to substitute for a shortage of indigenous labour (in volume and quality terms), can affect the authenticity of a country’s Travel & Tourism offer and its long-term brand, competitiveness and international image.

The sector’s often transient labour can limit its ability to deliver a consistently high quality visitor experience. High staff turnover directly leads to higher recruitment and advertising costs, higher training costs, reduced returns to training and an increased workload on existing staff.

Together Travel & Tourism talent gaps and deficiencies impact on costs, bottom-line profitability, competitiveness, service, quality, brand, investment and ultimately future growth.

Talent is increasingly seen as a key enabler for wider economic development, facilitator of growth and source of competitiveness. In this way, talent is no different to other supply-side factors like land, capital, technology and infrastructure. However, traditionally - as the literature review for this study has shown, with the exception of some countries - governments generally have not prioritised human resources and training to the same extent, for example, as infrastructure.

The impacts of Travel & Tourism talent imbalances and deficiencies are listed below. These clearly demonstrate why talent issues are so important to the sector’s growth sustainability and bottom-line.

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Labour and skills are a crucial component in the tourism supply chain. Enhancing the quality of service is pivotal in building a region’s reputation both domestically and globally, and making it competitive in the international marketplace. It ensures that once tourists visit your destination, they will want to return and bring others with them’ Source: Australia Government 2012: Tackling labour and skills issues in the tourism and hospitality industry: A guide to developing tourism employment plans

All of the above impacts relate to negative imbalances where the supply of talent falls short of demand, directly affecting industry employers. But there are negative consequences also where there is an excess supply of Travel & Tourism talent, which affects more today and tomorrow’s future employees. These negative consequences include, among others, downward pressure on wage levels and lack of employment and career progression opportunities. In the 1990s and early 2000s, the global economy experienced a boom and bust in the IT talent market. During the tech boom, talent was attracted to IT by the growing job opportunities and financial remuneration on offer. The dot com crash led to heavy jobs losses and remuneration fell behind other sectors. Even as the IT industry and talent demand market quickly recovered, the perception of the industry was scarred and supply was slow to respond leading to global talent shortages which are still prevalent today.

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Developing more tourism infrastructure—hotels, resorts, transportation, tourist destinations, and other amenities—is not enough to meet the needs of this rapidly expanding industry in China. The government and private enterprises must invest in tourism and hospitality education to fill the critical gap in workers who understand international best practices. China has invested billions of dollars in infrastructure, but now is the time to invest in human resources and skills development’ Source: The Hospitality Talent Gap, China Business Review

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Human Capital Issues in Context

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Structural characteristics of the Travel & Tourism sector Travel & Tourism is highly diverse in terms of its sub-sector mix, occupations and talent requirements: sub-sectors range from hotels to air transport, while occupations range from concierges to pilots. A relatively high proportion of the Travel & Tourism workforce is employed in elementary, low skilled occupations, e.g. cleaners, waitresses. The sector has a below economy average proportion (at least in advanced economies) of its workforce employed in higher skilled professional occupations. The Travel & Tourism workforce is also younger and more female-orientated versus the global economy average. In addition a high share of the workforce is part-time, casual and seasonal. The sector is more likely to recruit foreign workers compared to the economy average5. Evidence from the survey of WTTC member companies supports the assertion that Travel & Tourism is an important employer of young people. All but one of the member companies had hired a school or university leaver to their first job in the past two years. Nearly all companies offer some form of work experience or internship programmes, or provide further education and training programmes in order to specifically attract young people and retain them within their organisations.

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Travel & Tourism talent supply The supply of talent to Travel & Tourism is broad and comes from many sources given the diversity of sectors, occupation roles and range of talent requirements. Some employee skills are transferable across Travel & Tourism sub-sectors and from other sectors in the economy. But some other talent requirements are more specific and are supplied from more narrow and well-defined sources. For certain sectors and roles, there are typically few skill barriers for people to enter Travel & Tourism compared to other sectors. This is a ‘positive’ in the sense that people can work in the sector with little prior experience or qualifications, and train ‘on the job’. They can thus be recruited from a wide pool of labour. But this can also be a ‘negative’ in terms of its impact on perceived career attractiveness and pathways6.

Academic articles and published reports have focused a great deal on human capital issues, many of which have enormous implications and impact on Travel & Tourism companies and the future of the in sector as a whole. These issues include the structural characteristics of the Travel & Tourism sector; Travel & Tourism talent supply; imbalances between Travel & Tourism talent demand and supply; why Travel & Tourism experiences talent challenges; Travel & Tourism talent projections; and Travel & Tourism talent best practice policy examples, including case studies.

The talent market, in general and for Travel & Tourism, is becoming increasingly global with higher cross-border migration7. Looking to the future, the following megatrends will exert a significant influence on the future supply of talent to Travel & Tourism, although to varying degrees by country: declining youth demographics; retirement of the baby boom generation; rising female labour market participation; a general shift towards a more highly skilled (in education attainment terms) labour supply as older, less skilled workers retire; and the potential for some reverse migration back to fast growing emerging economies8.

This chapter also integrates highlights from a survey of senior HR professionals from WTTC member companies4. The survey examined talent recruitment and development, aiming to understand the scale of current talent gaps and the particular difficulties in recruiting quality staff.

UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-tourism WTTC Human Capital Research: http://www.wttc.org/focus/research-for-action/policy-research/human-capital-research/ 7 The Hospitality Talent Gap, China Business Review: http://www.chinabusinessreview.com/the-hospitality-talent-gap/ 8 The World Economic Forum, cited in The Hospitality Talent Gap, China Business Review: http://www.chinabusinessreview.com/the-hospitality-talentgap/ 5

4 The 41 respondents to the survey represent the talent situation amongst companies from almost all Travel & Tourism industries and cover 25 countries, as well as a collective view for Europe and the Gulf Cooperation Council (GCC). The survey was administered by WTTC and designed in conjunction with Oxford Economics.

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Imbalances between Travel & Tourism talent demand and supply

Economy-wide talent imbalances •

Talent imbalances in Travel & Tourism take many forms, covering both shortages and surpluses: •

Shortage or surplus of particular occupations, e.g. chefs, pilots

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Shortage or surplus of job-specific skills, e.g. foreign languages, IT

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Shortage or surplus of certain soft skills, e.g. customer service, problem solving

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2.2.1 Survey of WTTC member companies

Lack of country-specific Travel & Tourism talent imbalance evidence

Impacts of talent imbalances

The main effects of talent shortages on Travel & Tourism businesses in the UK have been to increase the workload of other staff and to create difficulties meeting customer service objectives. Skill shortages have also caused significant numbers of tourism establishments to have difficulties meeting quality standards. Increased operating costs, and losing business or orders to competitors, were also commonly mentioned by tourism establishments as negative impacts of skill shortages.

A key finding from the literature review was the lack of countries actually undertaking and publishing research on Travel & Tourism talent issues. This holds also for those countries with the largest (in absolute and relative terms) and fastest growing Travel & Tourism industries, and for countries which this research predicts will experience the greatest future talent ‘hotspots’ and ‘stretch points’.

According to the survey of WTTC member companies, the impact of the difficulties of recruiting tends to manifest itself by creating a higher workload and engendering lower morale and less creativity among the existing workforce. The effects of internal skill gaps, where some staff are not fully proficient in their roles, are similar. While none of the HR managers said that they had yet had to withdraw products or services from the market due to a lack of staff, one quarter admitted that a further impact of recruitment issues is a difficulty in meeting quality standards. Recruitment difficulties can also force companies into moving staff into new positions or over-promoting in order to fill gaps. This in turn can fuel other issues for HR teams and spur job turnover or bring about a lack of job proficiency among a proportion of the workforce. Vacancies aside, having staff that are not proficient in their roles also impacts the morale and workloads of the rest of the employees and can affect the quality of service levels provided to customers.

It could be the case that in many countries, stakeholders, away from the ‘cold face’ of Travel & Tourism (e.g. from government and education), are not aware or made aware of talent challenges because of this lack of reported evidence. It is hoped that this research may fill some of that gap in evidence and prompt these countries to look more closely at Travel & Tourism talent issues and build on this research. •

The limited evidence that exists from literature shows that: the UK has a higher share of Travel & Tourism businesses and employees with skill gaps (21% and 9%) compared to the economy average; in Australia, according to analysis by the Australian Government, a very high share (half) of Travel & Tourism businesses faces recruitment, retention and skill shortages9; and in Rwanda technical skill gaps are reported to be as high as 25% of Travel & Tourism’s total employment in Rwanda and 50% of staff need language training in English, French and Chinese (languages aligned to visitor origin markets).

Australia Government 2012: Tackling labour and skills issues in the tourism and hospitality industry: A guide to developing tourism employment plans: https://www.austrade.gov.au/Tourism/Policies/National-long-term-strategy/Working-groups/Labour-and-Skills Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf

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According to the ManpowerGroup talent shortage survey, covering 37,000 employers from 42 countries10, the top 10 jobs employers found difficulty filling in 2014 across the whole economy were, in descending order: skilled trades and engineers (ranked 1 and 2 for three consecutive years), technicians, sales representatives, accounting & finance staff, management/executives, sales managers, IT staff, office support staff and drivers. Although as this represents talent shortages across the economy, this is by no means fully representative of talent shortages in Travel & Tourism, although all of these roles are required by the Travel & Tourism sector.

Section 1.2 has already established a framework for analysing impacts of Travel & Tourism talent gaps and deficiencies. In general, evidence from literature on the impact of Travel & Tourism talent imbalances is limited. This is partly because the aim of some of the reviewed reports is to identify current and potential future imbalances with the hope of addressing these imbalances and avoiding negative impacts. • Some evidence, however, exists for UK Travel & Tourism11 and from the survey of WTTC member companies.

Over half of the Travel & Tourism companies in the WTTC member survey described their experience of hiring staff as difficult, with the challenge greatest for higher skilled and more professional roles. Alongside engineers, chefs and other technical roles, other jobs that are particularly difficult to recruit for include accountants and food & beverage managers. Nearly two-thirds of the companies also reported that recruiting staff has become more difficult in the past two years.

2.2.2

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At the broader economy-wide level, the ManpowerGroup talent shortage survey12 provides analysis of the impact of talent shortages. Over half of employers experiencing a talent shortage say it has a medium to high impact on their ability to meet client needs. Other impacts, in descending order of occurrence, include: reduced competitiveness/productivity, increased employee turnover, reduced innovation and creativity, lower employee morale and higher wage costs.

Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf https://www.gov.uk/government/publications/tourism-sector-skills-insights 12 Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf 10 11

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Why the Travel & Tourism sector experiences talent gaps and deficiencies

Retention •

The Travel & Tourism sector faces talent problems from high staff turnover and leakage of talent to other sectors20, which is often far in excess of the demand from Travel & Tourism’s expansion21.

Career attractiveness and pathways

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In the UK, turnover ranges from 7.5% for self-catered accommodation to over a quarter for pubs, bars and nightclubs22.

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The seasonal nature of Travel & Tourism demand in many destinations means that it is often difficult to offer year-round full-time employment which other sectors can and do offer13.

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The geographically remote location of some Travel & Tourism businesses can also mean limited local talent supply. This can be exacerbated by other constraints such as lack of local housing and transport connecting tourism businesses to larger pools of labour14.

According to the survey of WTTC member companies, average annual staff turnover was 18%, ranging from a high of 36% to a low of 3%. Recruitment is thus an on-going activity. Job roles in elementary occupations, sales and customer services and those with skilled trades have the highest levels of turnover.

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In some countries cultural and social issues make Travel & Tourism less attractive than other sectors, and place a ‘glass ceiling’ on female employment participation15.

The WTTC member survey also concluded that companies have to place emphasis on creating structures and systems within their organisations to best retain their workforce. The survey also highlighted flexible recruitment and retention practices as the new necessities of workforce planning.

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Low barriers to enter the sector can have a drawback: namely the perception of low skilled, low paid, menial transient jobs16.

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A lack of clear staff development pathways, unsociable working hours and low earnings potential (for some job roles) combine to create a poor recruitment image for the sector17.

Travel & Tourism has some unique features that make it a challenging sector to recruit and retain talent and skills.

Uncompetitive pay •

Competition •

Travel & Tourism often faces strong competition from other fast-growing sectors recruiting similar types of talent and often paying higher salaries18.

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Survey results of WTTC member companies show that for two-thirds of senior HR managers, recruitment challenges over the next five years are expected to get even more difficult as competition for talent is expected to further increase among sectors and across geographies. The survey found that a strong employer brand can both improve application rates for new employees and increase engagement and retention among the current workforce.

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Rather than facing an overall general lack of applicants for vacancies, WTTC member countries reported that some applicants who apply to vacancies tend to want higher levels of pay than can be offered, or do not have the required skills or experience required. In many cases also, applicants were said to lack the right attitude or motivation to fit with the company. Trying to maintain competitiveness through benchmarking the salaries of similar roles in competitor companies and industries is becoming common place among WTTC member companies.

Education supply

A report by the Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC) also identified the problem of ‘losing’ talent to other sectors and employers’ failure to attract qualified personnel into the sector19.

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In some countries there is a lack of provision of Travel & Tourism courses from education institutions, often due to a lack of qualified tourism educators23.

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Where Travel & Tourism courses are offered, the curricula can be poorly designed and outdated. There often needs to be a greater balance between theory and practice, a change from a traditional teaching mode to a more modernized, international, innovative, and interactive teaching mode, and in general greater responsiveness to and alignment with the sector’s needs.

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Although growing, the number of Travel & Tourism apprenticeships and volume of vocational provision in general typically falls short of demand.

British Columbia Labour Market Strategy: http://www.jtst.gov.bc.ca/skills_for_growth/

McKinsey Global Institute - Talent tensions ahead: A CEO briefing, Richard Dobbs, Susan Lund, and Anu Madgavkar: http://www.mckinsey.com/ insights/economic_studies/talent_tensions_ahead_a_ceo_briefing 15 http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourism.pdf 16 UK state of nation report 2013: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism 17 UK state of nation report 2013: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism 18 UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insightstourism 19 Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014). 14

UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insightstourism 21 Anecdotal evidence suggests turnover in Chinese hotels is as high as 40%. 22 State of the Nation 2013 Hospitality and Tourism report: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism 23 Rwanda Development Board – Rwanda Skill Survey 2012 – T&H Report: http://www.lmis.gov.rw/scripts/publication/reports/Tourism.pdf 20

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Structural characteristics

Economy-wide reasons for talent shortages

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Some occupations are heavily gender biased, e.g. housekeepers (female) versus chefs (male). This limits potential talent supply if, for example, few males apply for housekeeping positions24.

Travel & Tourism sector practice and training •

Not all employers proactively pursue or have in place a strategy to address talent challenges. In some cases this is understandable given that many Travel & Tourism businesses are small and lack talent management capacity by not having an inhouse human resources department.

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Some firms under-invest in staff up-skilling, which is likely to be partly linked to the transient nature and high turnover characteristics of the workforce.

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In some countries, there is a lack of training to nurture middle managers and a lack of relevant rotational opportunities with workplaces25.

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Young employees are more likely to engage with training which meets their personal as well as company needs and aspirations. So for young people, purely functional, task-related training is valued less than more generic skills development26.

2.4

In economies with fast growing Travel & Tourism industries, more focus has often been placed on investing in physical infrastructure rather than talent27.

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Too few countries undertake either formal Travel & Tourism workforce planning exercises or detailed talent studies.

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There is often a lack of industry-government-education engagement to discuss and resolve talent issues.

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Some countries have very favourable immigration policies which support Travel & Tourism talent supply, for example Gulf countries, others do not28.

UK state of nation report: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourismpdf 26 Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014). 27 The Hospitality Talent Gap, China Business Review: http://www.chinabusinessreview.com/the-hospitality-talent-gap/ 28 Canadian Tourism Research Institute – The Future of Canada’s Tourism Sector http://cthrc.ca/~/media/Files/CTHRC/Home/research_publications/labour_market_information/Supply_Demand/SupplyDemand_Report_Current_ EN.ashx and British Columbia Labour Market Strategy: http://www.jtst.gov.bc.ca/skills_for_growth/ 24

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It is useful to compare the factors above, for why Travel & Tourism experiences talent gaps and deficiencies, with economy-wide reasons why employers have difficulty filling jobs. According to the ManpowerGroup talent shortage survey29, the main reasons employers had difficulty filling jobs in 2014 include, in descending order: lack of technical competence (hard skills), lack of applicants, lack of experience, lack of workplace competence (soft skills), looking for more pay than is offered, undesirable geographic destination, poor image of business sector/occupation and lack of applicants willing to work in part-time/contingent roles. It is clear that many of these reasons correlate closely with the factors identified specifically for Travel & Tourism.

Travel & Tourism future talent projections Replacement demand will form a major component of future Travel & Tourism job openings. Replacement demand refers to the talent requirement to replace workforce leavers (either temporarily or permanently) due to retirement, maternity leave and joining other sectors amongst other reasons, and to backfill jobs vacated by an existing, promoted worker. •

Replacement demand is not unique to Travel & Tourism. All sectors in any dynamic economy with retirement and labour churn have a talent requirement relating to replacement demand. The extent of replacement demand depends on a number of factors including the age and gender structure of the workforce, staff turnover and an industry’s relative appeal. Travel & Tourism’s younger than average age structure should reduce replacement demand but its more female-orientated workforce and high staff turnover would increase it. It is difficult to compare replacement demand across sectors due to limited data availability and therefore difficult to assess whether Travel & Tourism has a larger relative replacement demand talent requirement.

•

The balance between new roles and replacement demand will vary by country. In countries with more mature and slower growing Travel & Tourism industries, and older workforces, replacement demand will account for a higher share of vacancies.

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In the UK, for example, replacement demand30 will be 4 times as large as expansion demand (the growth in the stock of sector jobs/new job roles)31.

•

There will be a rising gradient of talent demand across Travel & Tourism – a slow shift to more high skilled openings – but there will still be significant opportunities and demand for people with low qualifications32.

•

There will be a growing demand for managerial skills and customer service. Future managers will need to have broader management and business competencies33.

Government policy and engagement •

Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf A breakdown of the different sources of this replacement demand is not available. 31 UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insightstourism 32 UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insightstourism 33 http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourism.pdf 29

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2.5


•

In some countries, especially those where Travel & Tourism is rapidly growing from a relatively immature base, even where talent supply is increasing, the volume of talent supply with specific industry qualifications is only a fraction of the volume of future Travel & Tourism talent demand.

•

Looking ahead, future talent trends and demand vary globally in the sector. For example34, in Canada talent shortages in Travel & Tourism are projected to increase substantially as the baby‐boom generation retires. Although immigration and higher labour market participation by women will partially offset the departure of baby boomers, these two factors are not expected to be enough. The projected talent shortfall is equivalent to 10% of total employment, with shortages most severe for food and beverage services35. In Hainan, China, a huge talent shortage is projected given the predicted tripling in demand in a short period of time36 while in Asia there is predicted to be an 8 million talent shortage by 2021 in Travel & Tourism37. The supply of hotel managers is expected to meet less than half of potential demand.

This sub-section first highlights examples of general economy-wide and Travel & Tourism specific talent best practice from literature. This is followed by four case study examples: Singapore, Australia, Canada and Egypt.

The ManpowerGroup talent shortage survey38 report provides evidence on how employers are bridging their talent gaps. It describes how HR managers need to focus on three areas - people practices, talent sources and work models – but presently employers are twice as likely to focus on people practices compared to both talent sources and work models. •

Strategies employers are pursuing to overcome talent shortages in each of these three areas include, among others: People practices: Providing additional training and development to existing staff, utilising non-traditional or previously untried recruitment practices, redefining qualifying criteria to include individual who lack required skills but have the potential to acquire them, increasing starting salaries and providing clear career development opportunities during recruitment. Talent sources: Adapting talent sourcing to recruit more untapped talent pools, recruiting candidates outside the local region and country, partnering with educational institutions to create curricula aligned to talent needs and considering new locations to operate from where a larger and higher quality pool of talent exists.

Note these examples are determined by the availability of literature evidence. As said above, a key finding from the literature review was the lack of countries undertaking and publishing research on Travel & Tourism talent issues, including producing projections. 35 Canadian Tourism Research Institute – The Future of Canada’s Tourism Sector: http://cthrc.ca/~/media/Files/CTHRC/Home/research_publications/ labour_market_information/Supply_Demand/SupplyDemand_Report_Current_EN.ashx 36 http://www.whatsonsanya.com/news-18722.html 37 2012 Study by the Singapore Tourism Board (STB) and The Boston Consulting Group 38 Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf

21

Work models: Increasing the focus on improving the talent pipeline, redesigning work procedures, offering more flexible work arrangements and providing virtual work options. •

The ManpowerGroup talent shortage survey report also outlines the evolving role of HR practitioners. They are now expected to be experts in supply and demand, marketers (since talent is now also a savvy and sophisticated consumer) and designers (thinking differently how to structure work to access, mobilise, optimise and unleash the potential of current and prospective employees).

•

Countries where the environment is conducive to growth in Travel & Tourism human resources have:

Travel & Tourism talent best practice policy

2.5.1 Economy-wide talent best practice

34


•

A strong customer service base

•

A youthful workforce

•

A flexible labour market

•

Positive perceptions of T&T jobs

•

An open policy to hiring foreign, high quality labour

•

Prioritised Travel & Tourism

•

Less competition for jobs from other sectors such as retail

•

Spare labour market capacity and female participation

•

High quality company training of employees

22


2.5.2


2.5.3

General Travel & Tourism talent best practice Literature findings on general Travel & Tourism talent best practice can be grouped under three headings: industry, education and government.

23

Singapore case study •

For Singapore only, its case study evidence covers both economy-wide and Travel & Tourism talent best practice. Singapore generally is a regarded as an exemplar for its talent policies.

Economy-wide talent best practice

INDUSTRY

EDUCATION

Mainstream and prioritise talent management as a central corporate objective and have in place a talent strategy39

Provide a sufficient volume and quality of Travel & Tourism-related vocational training and accredited apprenticeships

Explore alternate talent sources outside of firms and the Travel & Tourism sector

Have in place a sufficient number of Travel & Tourism educators so that this does not act as a supply constraint

Create partnerships to share part‐ time or seasonal workers between businesses in Travel & Tourism and/ or other sectors Offer different work options to suit different workers (e.g. to females, older workers etc)40 Provide clear career guidance information and communicate effectively with future talent pools

Have a modern Travel & Tourism course curricula, and standardise and certify Travel & Tourism qualifications Engage with industry and governments to teach the right skills for future employability

GOVERNMENT

•

Singapore produces a Strategic and Skills-in-Demand List. This is a compilation of occupations that are key to supporting the growth of key economic sectors in Singapore. This also lists the skill-sets that are expected to be in strong demand by industries in the coming years. Job-seekers refer to this list to help them in their career planning.

•

In addition to the Skills-in-Demand List, the Manpower Resources Guide is an initiative by the Ministry of Manpower, in collaboration with several government agencies and education institutions, to highlight the sources of local manpower from which companies can tap to meet their immediate and near-term manpower needs. The guide outlines the specific skill sets in which Singapore’s new labour supply will be trained, as well as the salary ranges of occupations. This helps employers to find and attract the right talent for their needs. Included in the guide is a special feature on other viable sources of manpower (e.g. older workers and return-to-work women), which is especially important in a tight labour market such as Singapore’s. The guide also provides contact information for each manpower resource to help employers recruit directly from specific sources.

•

Both of the above examples clearly contribute to high quality, up-to-date and transparent labour market intelligence which go a long way to eliminating information asymmetries for employers, employees and students.

Undertake forward-looking workforce planning and industry talent research, including for example, research to understand investment required to address skills gaps41 Have in place a Travel & Tourism talent strategy at all education levels including lifelong learning Engage regularly with industry and other stakeholders

Travel & Tourism talent best practice42

Put in place supportive and appropriate immigration policies linked to the most acute industry and occupation talent shortages

Offer clear career pathways to young workers to promote Travel & Tourism as a viable and rewarding career option Offer more apprenticeships Greater corporate input to Travel & Tourism education and training design and teaching

The survey of WTTC member companies showed that the majority of companies have talent strategies in place for both the immediate future and in the short term (2-5 years). However, this share drops to less than one-third for those that have a strategy with a longer term view. 40 According to the survey, WTTC member companies offer a vast array of benefits to many of its employees, including, among others: bonuses that are based on the overall performance of the company: 94%; private healthcare: 78%; individual performance-related pay: 72%; share options for employees: 53%; and subsidised childcare: 19%. 41 European Commission 2012, “Rethinking Education: Investing in Skills for Better Socioeconomic Outcomes”

•

The Singapore Government has invested heavily in Travel & Tourism’s manpower capabilities. This funding has represented a sizable share of total Government spending on developing the industry, highlighting the recognition given to talent and its importance to the sector. The goals of the funding included: ramping up advanced specialist training in new niche tourism areas where gaps existed, staying ahead of regional competitors, and increasing accessibility to new education opportunities with the help of scholarships.

•

Singapore has previously developed a Tourism Talent Plan in collaboration with its Workforce Development Agency. The plan aimed to prepare the workforce to meet a projected spike in manpower demand, driven by new tourism investments, including two integrated resorts, and new events. The holistic three-pronged approach comprised continuing education and training for adult workers, preemployment training for students, and industry development to attract more workers to join Travel & Tourism. To enlarge the pool of workers with service skills for tourism jobs, the Workforce Development Agency developed the Certified Service Professional program (CSP), which extends portable skills training in service excellence to workers who want to join the tourism sector.

39

Navigating the next phase of Asia’s tourism: http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigatingthe-next-wave-in-Asia%27-Tourism.pdf

42

24


2.5.4

Australia case study43 •

•

•

2.5.5

A National Workforce Development Fund was set up by Service Skills Australia to help individual enterprises and industry sectors expand their workforce capacity by providing employers and workers with the opportunity to enhance their skills through formal training. The fund, supported by the Australian Government as well as the private sector, also helps to recruit and retain quality staff in the service industries. The backing from the Australian Government was considered to give the scheme credibility and status. By developing managerial skills as part of formal training, employees receiving the training started to view roles within the Travel & Tourism industry as a more viable long-term career path. With education and labour organisations involved in the fund, participants were given the option of a range of training and development opportunities including accredited courses, traineeships, apprenticeships, workshops, short courses, non-accredited training and blended learning. As a result of the National Workforce Development Fund, Service Skills Australia recognised better outcomes for both employees and employers within Travel & Tourism. Overall skills were improved and staff turnover was reduced.

Canada case study44 •

2.5.6


The overall goal of the Canadian Tourism Human Resource Council (CTHRC) is to improve the quality and competitiveness of the Canadian tourism labour force. Primarily, the CTHRC assists businesses with HR planning and training, as well as offering consultancy services in the development of occupational standards, skill standards, training, assessment, certification and administration.

•

The CTHRC aims to reduce the impact of poorly trained employees on customer service, revenue, job satisfaction and morale, benefitting both employees and employers.

•

Direct backing from the Canadian Government, which funds all development and updates of standards, training and certification programmes, has brought recognition to the importance of standards within Travel & Tourism. The programme and programme standards are further validated by their inclusion in public and private education systems.

•

Overall, the funding programme has proved successful, providing suitable training resources to support all levels of training in Travel & Tourism at both a local and regional level.

2.5.7

Egypt case study •

According to COMCEC45, tourism in Egypt is set to grow in the next decade and will have a significant role in the sustainability of the country’s culture, economy, environment and state security.

43 Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014). 44 Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014). 45 Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014).

46 47

25

•

However, despite large-scale investment from the Government, domestic private sector and FDI, Egypt’s international tourism competitiveness is being jeopardized by poor service levels. Indeed this is confirmed later in the report by Egypt’s poor ranking for its Travel & Tourism enabling environment which is a more serious issue for the country than the sector’s demand-supply balance projections.

•

To address this, efforts are being made to improve the skills of personnel employed in the tourism sector.

•

The Ministry of Tourism, through the Egyptian Tourism Federation46, aims to promote increased professionalism in management within the hotel and tourism industry. It acknowledges the need to invest in human resources through continual investment in academic and occupational skills.

•

Training is demand-driven and takes account of market-needs and the education system together. It primarily focuses on capacity building of senior managers and creating a competitive and sustainable tourism product.

•

Employees benefit from industry-relevant skills upgrades, while organisations benefit from a stream of qualified staff to meet current and future needs within the industry.

•

The effective partnership between involved stakeholders - the Government, industry and the education system - is indicative of the importance placed on Egypt’s Travel & Tourism potential. The multi-strand partnership has ensured consistent interest and focus on human resources and talent enhancement.

Lao National Institute for Tourism and Hospitality case study •

Located in Vientiane, the Lao National Institute of Tourism and Hospitality’s (LANITH) mission is to be the country’s most valuable tourism education resource. It has established a national tourism curriculum, using forward-thinking teaching methods, and provides international-level training facilities, resources and equipment47.

•

LANITH was set up in 2008 to maximise service and product capacity in Travel & Tourism. It was developed with the support of Luxembourg Development and formally accredited by the Laos Ministry of Education and Sports in 2013.

•

LANITH provides training aimed at both school leavers and tourism professionals. New students take a two-year Diploma in Tourism and Hospitality while the Passport to Success training program is available to employees already working in the sector.

•

Passport to Success started in 2011 and is now the biggest industry training program in Laos, offering short vocational courses in areas such as customer service, kitchen management and food production. To date, almost 1,000 hospitality and tourism staff have studied subjects such as customer service, food and beverage operations, management and communications.

•

LANITH were winners of the 2014 WTTC Tourism for Tomorrow People award. The institute was recognised for developing tourism intelligently and sustainably, while also ensuring that its Lao citizens benefit from growth of the sector.

www.etf.org.eg Pacific Asia Travel Association: http://www.pata.org/Members/6461

26


Talent demand-supply balance & enabling environment analysis

27


3.1

Talent demand-supply balance projection analysis Quantifying the future Travel & Tourism talent demand and supply imbalance patterns and trends is needed not only to identify how future talent needs for Travel & Tourism may differ from the economy as a whole, but also to look specifically at where geographical stretch points might be, when (e.g. in short, medium and/or long term) and at what level of educational attainment (university, high school and below high school).

The research uses two methodological approaches to assess the country-by-country Travel & Tourism talent demand, supply and imbalances and the talent enabling environment in each country. This chapter summarises the results of the talent analysis. Results are presented first for each of the two methodology approaches, followed by the combined composite rank analysis. See Annex B for full methodological details.

3.1.1 Travel & Tourism talent demand and supply projections: Long-run (2014-2024) top and bottom 5 growth

The top 5 and bottom 5 countries for Travel & Tourism talent demand and supply growth in the long-run to 2024 are presented in Table 3.1 below. The top 5 rankings for both Travel & Tourism talent demand and supply future growth are dominated by emerging economies in the Middle East and South East Asia, as well as Costa Rica (demand) and Turkey (demand and supply). The bottom 5 rankings are dominated by ageing European and North East Asian countries, plus Australia (demand) and Russia (supply).

Table 3.1: Top and bottom 5 countries for Travel & Tourism talent demand and supply growth (2014-2024) Top & Bottom 5 countries for Travel & Tourism talent demand and supply growth (Long-run, 2014-2024)

RANK

DEMAND

Caveat: This research is a first step to building a rich and comparable global evidence base on Travel & Tourism talent demand, supply and imbalances, and the current talent enabling environment. But in order to deepen and broaden global Travel & Tourism talent analysis, and improve the robustness of the analysis, other research stages could be undertaken, notably a bespoke industry survey with a much larger sample than achieved by the survey of WTTC member companies, and in-depth consultations with a range of stakeholders. This should be borne in mind when viewing and drawing conclusions from the results of this chapter.

SUPPLY

THAILAND

1

1

SAUDI ARABIA

TURKEY

2

2

BAHRAIN

SAUDI ARABIA

3

3

OMAN

OMAN

4

4

TURKEY

COSTA RICA

5

5

PHILIPPINES

SOUTH KOREA

42

42

AUSTRIA

AUSTRALIA

43

43

CZECH REPUBLIC

JAPAN

44

44

SOUTH KOREA

GERMANY

45

45

JAPAN

NORWAY

46

46

RUSSIA

Source: Oxford Economics, WTTC

28


Figures 3.1 to 3.4 overleaf chart the talent demand-supply balance projections across the 46 countries for: •

The long-run (2014-2024) for all education attainment levels combined;

•

The long-run (2014-2024) for all education levels combined versus the Total Economy long-run outlook;

•

The long-run (2014-2024) by individual education attainment levels; and

•

The long-run (2014-2024) for all education levels combined versus the medium-run (2014-2019) outlook.


3.1.3

Travel & Tourism talent demand-supply balance projections: Long-run (2014-2024) 37 of the 46 countries are forecast to have deficit Travel & Tourism talent trends over the next decade, e.g. talent demand growth faster than talent supply growth (Fig 3.1). This is either because of strong projected growth in Travel & Tourism talent demand, weak projected growth in Travel & Tourism talent supply, or a combination of both. The following 12 countries are projected to have the most acute deficit Travel & Tourism talent trends (demand growth more than 1 percentage point faster than supply growth): Thailand, Poland, Taiwan, Russia, Peru, Costa Rica, Argentina, Sweden, Singapore, Italy, Turkey and Greece. For some of these countries, the source of the talent trend deficit is a combination of strong talent demand growth (given the strong forecast for Travel & Tourism direct employment) and weak talent supply growth (typically linked to weak demographics). Of these countries, Greece and Italy, with current and projected high unemployment, may be more able to avoid experiencing acute talent shortages by drawing in the unemployed to meet demand. Although this assumes a geographical matching of where demand will be and where the unemployed reside, or a high degree of labour mobility, which will not always be true. In contrast, tight labour markets such as Singapore, where unemployment is low and the economy is close to full employment, and Travel & Tourism is a less attractive career than the economy average job, may find it difficult to avoid an acute talent shortage. Perhaps for this reason it should be of no surprise that Singapore is a leading case study for Travel & Tourism talent best practice because of the challenges and pressures that it faces. The Philippines and India are projected to have marginal Travel & Tourism talent surplus trends (although talent supply growth is less than half of one percentage point faster than demand growth). Given margins for error in the analysis and the relative small size of the projected surplus trend, this should not be interpreted to mean that these two countries will be immune to talent challenges. Neither of these two countries ranks particularly strongly for their talent enabling environment. For both, apart from the pillars for demographics and relative industry attractiveness, they score relatively poorly across other pillars.

Travel & Tourism talent demand-supply balance projections: Travel & Tourism versus Total Economy Over the long-run to 2024, Travel & Tourism’s talent balance projections are considerably more challenging compared to the wider economy. For the total economy, only 6 countries are forecast to have deficit talent trends over the next decade (one of which is Singapore), compared to 37 of the 46 for Travel & Tourism (Fig 3.2). No countries are projected to have economy-wide talent deficit trends of greater than 1 percentage point, compared to 12 countries for Travel & Tourism. Travel & Tourism talent demand growth is faster than the economy average employment growth in all 46 countries.

Note recap the figures refer to the percentage point difference in projected Travel & Tourism talent supply growth minus projected Travel & Tourism talent demand growth. A positive figure refers to a trend talent surplus and a negative figure a trend talent deficit.

3.1.2

29

Travel & Tourism also has less favourable talent supply projections in two-thirds of the 46 countries, although the differences are relatively small. This is because Travel & Tourism’s talent demand structure is more weighted towards lower education attainment levels which are decreasing as a share of total labour supply in most economies.

3.1.4

Travel & Tourism talent demand-supply balance projections: Education attainment level Travel & Tourism talent balance projections vary significantly by education attainment level in the long-run to 2024 (Fig 3.3). Compared to the analysis for all education attainment levels combined, fewer countries (21 versus 37) are projected to have deficit talent trends over the next decade at college / university level. This figure rises to 34 countries at high school level and 43 countries below high school level. For the number of countries with projected talent deficit trends of greater than 1 percentage point, the figures are 10 for college / university level, 11 for high school level and 32 for below high school level (recall the figure for all education attainment levels combined is 12). 43 of 46 countries with projected talent deficit trends at below high school level, of which for 32 the deficit is greater than 1 percentage point, is a striking finding. Countries not forecast to have deficit talent trends at college / university level include: Philippines, India, Norway, Egypt, Australia, Germany, Colombia, Brazil, Indonesia, South Africa, Morocco and China. Many of these emerging economies have seen a rapid explosion in their recent supply of university-educated persons, a trend which is expected to continue. Although the quality of all of the expansion in this new graduate supply is often raised as an issue for concern, especially amongst multinationals operating in these countries who can benchmark to other countries. Countries forecast to have the largest deficit talent trends below high school level include: Thailand, Peru, Costa Rica, Czech Republic, South Korea, Russia, Poland, Chile, Malaysia, China, Singapore, Mexico, Egypt and Greece. Continued high and growing demand for below high school level talent – with the effect of technology not seemingly replacing this demand (see box below) - and a declining share of the labour supply with below high school attainment, are they key factors behind this challenging talent projection for Travel & Tourism.

30



Fig 3.1: Balance between demand for and supply of talent in the Travel & Tourism Sector (2014-2024) Travel & Tourism All education levels Long-run (2014-2024)

31

Fig 3.2: Balance between demand for and supply of talent in the Travel & Tourism Sector versus Total Economy (2014-2024) Travel & Tourism Total Economy All education levels All education levels Long-run (2014-2024) Long-run (2014-2024)

Impact of technology on Travel & Tourism employment Much has been written about the impact that technology has in replacing jobs in some industries – an issue on-going since the industrial revolution, but one gathering pace with the combination of massive computing efficiencies and the “internet of things” being able to supplant jobs currently requiring cognition, and therefore people, to perform. According to the survey of WTTC member companies, HR managers believe that future technology will only be able to replace Travel & Tourism roles to some extent and mainly with support and administrative roles. Tourism services benefit and are enhanced by human interactions, yet HR managers recognise how the move in creating more self-service opportunities for customers could reduce certain staffing needs. At the same time, it is the training for the expected introduction of new technologies over both the short and mediumterms that HR managers most need to prepare their current workforce for.

3.1.5

Travel & Tourism talent demand-supply balance projections: Medium (2014-2019) versus long-run (2014-2024) Slightly more countries (40) are forecast to have Travel & Tourism deficit talent trends in the medium-run (next five years) compared to 37 in the long-run (next ten years (Fig 3.4). The difference is even greater when looking at the number of countries with projected talent deficit trends in excess of 1 percentage point (21 versus 12). Countries with noticeably more acute medium versus long-run talent challenges include: Bahrain, Morocco, Saudi Arabia, Malaysia, Oman, Switzerland and Bermuda. The reason for this is that demand growth is stronger in the medium versus long-run. Travel & Tourism’s talent challenges are therefore clearly more than a long-term issue. They are impacting on the sector today and will have a greater impact in the next 5 years compared to the next 10 years. Given the lag between action and impact on the pipeline of talent supply, interventions to boost Travel & Tourism talent supply, in volume and quality terms, cannot be postponed. This is even more pressing where countries have major events or new resort openings where talent demand is ‘lumpy’ and can spike, and where countries have ambitious aspirations for Travel & Tourism with growth even faster than assumed in the baseline demand scenario used in this study. Notes: Trend talent surplus > 0; Trend talent demand-supply balance 0; Trend talent deficit < 0 Source: Oxford Economics, WTTC

Notes: Trend talent surplus > 0; Trend talent demand-supply balance 0; Trend talent deficit < 0 Source: Oxford Economics, WTTC

32


Fig 3.3: Balance between demand for and supply of talent in the Travel & Tourism Sector by Education Attainment Level (2014-2024) Long-run (2014-2024)

Travel & Tourism College High BelowHigh University level School level School level

Fig 3.4: Balance between demand for and supply of talent in the Travel & Tourism Sector in the LongRun (2014-2024) and Medium-Run (2014-2019) Travel & Tourism Travel & Tourism All education levels All education levels Long-run (2014-2024) Mid-run (2014-2019)

33


Table 3.2: Countries with projected talent deficit trends < -1% (acute talent shortages) Travel & Tourism: Talent deficit All education levels

All education levels

College / University level

High school level

Below High school level

Long-run (2014-2024)

Medium-run (2014-2024)

Long-run (2014-2024)

Long-run (2014-2024)

Long-run (2014-2024)

-

-

-

-

-2.9

-

-

-

-

-1.4

-

-

-

-

-

-

-

-

-

-2.1

-

-

-

-

-

-

-

-

-

-

-1.3

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-1.6 -1.6 -1.4 -1.6 -2.5 -1.1 -2.3 -2.6

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-1.4

-

-

-

-

-

-

-

-

-

-




34


3.1.6

Travel & Tourism talent demand-supply balance projections: Expert feedback from WTTC member companies In the survey of senior HR professionals of WTTC member companies, respondents were asked to provide feedback on whether they perceived Oxford Economics’ country or region talent demand-supply balance projections (the analysis above) to be either too optimistic or pessimistic. This qualitative in-country/region and on-the-ground expertise is helpful to complement and ‘road test’ the quantitative projection analysis. In total and across all education attainment levels, and on balance, the projections for the Travel & Tourism talent demand-supply balance were identified as being too optimistic for 16 countries or regions, and too pessimistic for 11 countries/regions (not all countries were covered by the survey so no feedback in Table 3.3 below is not necessarily an indication of agreement with the projection). However in many cases there was only one response per country so given the small sample, it is difficult and would be wrong to draw strong conclusions from the survey responses for these countries. In addition the projections refer to a ten-year timeframe whereas the current situation in countries and the actual recent experiences of WTTC member countries may have influenced responses. That said, two clear messages emerge from the feedback: 1. WTTC member companies believe that the future Travel & Tourism talent environment will be more challenging than implied by the quantitative demand-supply balance analysis, especially for countries which rank better. In particular, and where there was a reasonable number of country responses, there tended to be unanimous strong opinions about the demand-supply balance projection being too optimistic for India, Germany and Morocco. 2. WTTC member countries believe the outlook is not as challenging, or the talent situation will not be as bad, for the following countries ranked at the bottom: Thailand, Poland, Taiwan and Russia. •

China was an interesting case where there was a mixed response with 3 respondents saying the projection was too optimistic and 5 too pessimistic. This may jointly reflect concerns about meeting China’s strong talent demand outlook, but at the same time confidence in China’s proven track record of doing what is necessary to realise its wider economy and sector-specific growth potential.

•

In terms of broad responses by education attainment level, the feedback suggests that demand-supply balance projections are too optimistic for university (e.g. India) and high school (e.g. Morocco) level and too pessimistic for below high school (e.g. Thailand) level.

35


Table 3.3: Feedback from WTTC member companies on Travel & Tourism demand-supply balance projections

Supply minus demand growth (Long-run, 2014-2024)

Travel & Tourism

Feedback from survey of WTTC member companies

Too optimistic Too optimistic Too optimistic Too optimistic Too optimistic Too optimistic Too optimistic Too optimistic Too optimistic Too optimistic Too optimistic Too optimistic

Too optimistic

Too optimistic Too optimistic

Too pessimistic

Too pessimistic Too pessimistic Too pessimistic Too pessimistic


36


In addition to feedback on whether the overall projections were too optimistic or pessimistic, WTTC member companies also provided some useful additional insights which are summarised below.

Countries where projections were deemed optimistic • •

•

India: “India’s economy is on an upturn and there will be severe skill shortages in the hospitality industry. It is already happening now.” India and China: “While China and India may produce a lot of college graduates, many of them chose not to stay in the Travel & Tourism industry or aspire to go overseas as in the case of India. Also, in these two countries, Travel & Tourism expansions are into tertiary markets where the educated may not chose to go work in.” GCC countries: “In the Gulf region countries, despite graduating from a few hospitality colleges, the young nationals do not work in hospitality (as a result of salary, culture and working times). Today, there is no structure to develop young people in hospitality below high school.”

•

Netherlands and France: “In the Netherlands and France, it will be more difficult to attract people to the Travel & Tourism sector because of lack of flexibility and demands of the sector in flexibility.”

•

Japan: “Japan already faces difficulty in recruiting quality human resources in the lodging and ground transportation industries.”

•

South Africa: “The South African education system is currently not progressing so there will be an even greater talent shortage as currently experienced.”


Fig 3.5: Thailand - balance between demand for and supply of talent in the Travel & Tourism Sector in the Long-Run (2014-2024), Medium-Run (2014-2019) and Short-Run (2014-2015) and By Education Attainment Level Thailand: T&T supply minus demand future balance Thailand:Talent Talent supply supply minus demand future balance Thailand: Talent supply minusfuture demand future balanceThailand: T&T Thailand: supply minus demand future balance Thailand: minus demand balance supplyT&T minus demand future balance 0.0

0.0

-0.5

-0.5

-1.0

-1.0

-1.5

-1.5

-2.0

-2.0

-2.5

-2.5

-3.0

-3.0

-3.5 -4.0 -4.5

2.0

2.0

1.0

1.0

0.0

0.0

-1.0

-1.0

-2.0

-2.0

-3.0

-4.0 -3.5 Economy: Total supply minus Economy: Total supply minus demand demand -5.0 -4.0 T&T: Total skill weighted supply T&T: Total skill weighted supply minus demand minus demand -4.5 -6.0 Short-run (2014-15) Medium-run (2014-19) Long-run (2014-24) Short-run (2014-15) Medium-run (2014-19) Long-run (2014-24)

Oxford Economics, WTTC Source: OxfordSource: Economics, WTTC

-3.0 T&T: College T&T: College educated supplyeducated minus supply minus demand demand -4.0 High school T&T: High schoolT&T: educated supplyeducated supply minus demand minus demand -5.0 Below high school educated T&T: Below highT&T: school educated supply minus demand supply minus demand -6.0 Short-run (2014-15) Medium-run (2014-19) Long-run (2014-24) Short-run (2014-15) Medium-run (2014-19) Long-run (2014-24)

Oxford Economics, WTTC Source: OxfordSource: Economics, WTTC



•

India is projected to have a modest Travel & Tourism talent surplus trend in the long-run, similar to the economy as a whole. Surplus talent trends are projected for college and high school level, but a talent deficit trend is projected for below high school level.

Countries where projections were deemed pessimistic

3.1.7

•

Poland: “The Poland forecast is too pessimistic. The Travel & Tourism market is rather stable and compared to the existing number of schools and faculties related to this area, there is even a slight surplus of potential talents.”

•

Thailand: “Thailand seems overly pessimistic as the number of people outweighs the industry growth.”

Travel & Tourism talent demand-supply balance projections: Country comparison, Thailand versus India Before turning to results for the Travel & Tourism enabling environment, it is helpful and useful for illustration to compare talent demand-supply balance projections for two countries with contrasting outlooks. Thailand is projected to have acute Travel & Tourism talent deficit trends, which are even more severe than for the economy as a whole. Deficit talent trends are projected across each of the three education attainment levels in the medium and long-run, with the deficit trend more critical below high school level.

37

Fig 3.6: India - balance between demand for and supply of talent in the Travel & Tourism Sector in the Long-Run (2014-2024), Medium-Run (2014-2019) and Short-Run (2014-2015) and By Education Attainment Level India: T&T supply minus demand future balance India: Talent supply minus demand future balance India: Talent India: supply Talent minus supply demand minus future demand balance future balance India: T&T supply India: T&T minus supply demand minus future demand balance future balance 0.7

3.0

0.7

Economy: Total supply Economy: minusTotal demand supply minus demand

0.6

0.6

2.5 T&T: Total skill weighted T&T: Total supply skillminus weighted demand supply minus demand

0.5

0.5

2.0

1.5

1.5

1.0

1.0

0.5

0.5

0.0

0.0

0.4

0.3

0.3

0.2

0.2

0.1

0.1

0.0

0.0

-1.0

-0.1

-0.1

-1.5

-0.5

-2.0 -0.2 Short-run (2014-15) Short-run (2014-15) Medium-run (2014-19) Medium-run (2014-19) Long-run (2014-24) Long-run (2014-24)

Source: Oxford Economics, Source: Oxford WTTC Economics, WTTC


2.5

2.0

0.4

-0.2

3.0

-0.5 educated T&T: College T&T: supply Collegeminus educated supply minus demand demand -1.0 T&T: High school educated T&T: Highsupply schoolminus educated supply minus demand demand -1.5 T&T: Below high school T&T: Below educated highsupply school educated supply minus demand minus demand -2.0 Short-run (2014-15) Medium-run (2014-19) Long-run (2014-24) Short-run (2014-15) Medium-run (2014-19) Long-run (2014-24)

Source: Oxford Economics, Source: Oxford WTTC Economics, WTTC


38

3.2


Talent enabling environment analysis


•

For Switzerland, ranked 3rd out of the 46 countries, it demonstrates global excellence across a number of pillars – customer service, training, the general quality of its human resources etc – offsetting weaknesses in demographics, spare labour market capacity and Travel & Tourism’s relative attractiveness. Switzerland tops the INSEAD Global Talent Competitiveness Index and the WEF Travel & Tourism Competitiveness Index (including the human resources pillar).

•

There is therefore no clear ‘blueprint’ to achieve a top ranking talent enabling environment score except to demonstrate excellence across a number, but not necessarily all, pillars.

•

For Russia, its bottom rank is explained by weaknesses in customer service, demographics, openness, the prioritisation of the Travel & Tourism sector and training. For Egypt its talent pillar weaknesses are in customer service, openness, the general quality of human resources and training, more than offsetting the sector’s relative attractiveness as an employer and the high prioritisation accorded to Travel & Tourism. For some of the lowly ranked European countries, demographics are a key weakness, along with other factors: Greece (customer service and training), Germany (industry relative attractiveness and low prioritisation), and Italy (labour market flexibility).

An analysis of the literature identified the characteristics of a country that are important in enabling the development and growth of talent for Travel & Tourism, the “enabling environment”. These are: • • • • • • • • •

A strong customer service base A youthful workforce A flexible labour market Positive perceptions of T&T jobs An open policy to hiring foreign, high quality labour Prioritised Travel & Tourism Less competition for jobs from other sectors such as retail Spare labour market capacity and female participation High quality company training of employees

3.2.1 Talent enabling environment: Overall and individual pillars The top and bottom five ranked countries according to the talent enabling environment analysis are as follows (see Table 3.4): Top 5 ranked: Qatar (rank 1 of 46), UAE, Switzerland, Singapore and Malaysia (rank 5). Bottom 5 ranked: Russia (rank 1 of 46), Egypt, Italy, Argentina and Colombia (rank 42). •

Table 3.4 explains a country’s overall ranking by also showing its standardised z-scores for each pillar. Z-scores for each variable within each pillar are provided in Annex C.

•

There are several different reasons why the countries listed above rank top and bottom.

•

For the UAE and Qatar, ranked 1st and 2nd, demographics, labour market flexibility and openness are key pillar strengths. For Singapore, ranked 4th, customer service, labour market flexibility, openness, general quality of human resources and training are the main pillar strengths.

39

Other notable observations from Table 3.4 include: •

The threat from growing retail sectors in China and India could pose to Travel & Tourism in terms of competing for talent.

•

The largely untapped female talent supply potential in predominantly Muslim countries with low female labour participation rates (e.g. GCC and North African countries, Malaysia etc).

•

The potential talent supply pool in weak European economies where unemployment remains high, including high youth unemployment – Greece, Italy, Spain, France – and other economies such as South Africa and India with untapped labour. This contrast with tight labour markets with low unemployment and close to full employment in Singapore and South Korea.

Like other global indices similar to this talent enabling environment analysis, countries can use the results in Table 3.4 (and more detailed analysis in Annex C) to pinpoint areas of talent strength to maintain, showcase and improve, and identify areas of weakness to address. Although not fully comprehensive, this information, alongside the talent demand-supply balance projections, would serve as a useful starting point for countries considering developing talent strategies for Travel & Tourism.

40


3.2.2

Table 3.4: Travel & Tourism talent enabling environment pillar z scores Travel & Tourism: Talent enabling environment overall and pillar z scores Overal

Weight

Customer service

Demographics

Flexibility of labour market

Industry relative attractiveness

Openness

Prioritisation of T&T and existing T&T skill base

Quality of general human resources

100%

10%

10%

10%

10%

10%

10%

10%

Qatar

0.88

1.33

1.65

1.73

0.69

2.06

-0.59

UAE

0.81

0.64

1.82

1.80

0.26

2.09

0.93

Switzerland

0.76

1.61

-0.45

2.01

-0.31

1.08

Singapore

0.58

0.84

0.01

2.04

-1.21

Malaysia

0.52

0.75

1.11

1.28

0.03

US

0.46

0.66

-0.26

1.89

Austria

0.44

1.54

-0.50

-020

Sweden

0.42

1.44

-0.45

UK

0.38

0.44

Thailand

0.37

0.62

Costa Rica

0.36

0.07

Canada

0.33

0.82

Bermuda

0.31

-0.71

Barbados

0.28

Netherlands Saudi Arabia Bahrain

0.17

-0.13

Morocco

0.11

-0.73

10%

10%

0.55

2.08

-1.14

0.47

0.90

-0.01

-0.83

0.52

0.09

1.42

0.58

-0.03

1.65

1.07

0.63

1.41

0.43

-0.28

0.89

0.45

1.03

0.00

0.14

-0.49

0.82

-0.48

0.29

-0.28

1.46

0.64

0.28

0.86

0.46

-0.31

0.82

0.63

0.99

0.05

1.25

-0.95

-0.67

0.67

-0.20

1.07

-0.28

0.61

1.11

-0.40

1.31

0.80

0.50

0.42

1.14

1.87

0.27

1.06

0.07

1.12

1.30

0.00

0.78

-0.74

-0.03

-0.16

-0.64

0.85

1.00

-0.68

-0.21

0.53

0.13

0.36

-0.22

0.18

-0.47

1.75

-0.03

0.05

-0.40

1.11

0.04

0.40

0.65

-0.08

0.98

-0.21

-0.08

2.08

0.37

-1.27

1.95

-0.08

-0.71

-0.08

0.98

-0.89

-0.21

2.26

0.37

-0.29

0.73

-0.08

0.25

0.55

-0.59

-0.79

1.40

0.81

0.40

1.04

0.26

0.38

1.33

0.21

0.09

1.07

1.56

-0.19

0.71

-0.80

-0.19

-0.62

-1.13

-0.04

1.22

0.58

2.98

1.13

0.36

-0.31

-0.33

-0.61

0.00

0.82

0.41

2.29

-0.18

1.49

-1.50

-0.84

-0.43

-0.92

0.11

-0.69

1.01

0.38

2.35

Taiwan

0.07

-1.19

0.25

-1.15

0.43

-1.36

0.06

1.83

-0.14

0.44

-0.75

-0.44

0.37

-0.85

-0.42

-0.72

-0.64

0.04

1.26

Australia

0.00

0.48

-0.13

0.13

-0.65

-0.77

-0.28

0.30

0.51

-0.22

0.36

-0.21

-0.65

-0.35

-0.64

0.27

0.53

0.18

0.21

0.46

Norway

-0.02

China

-0.03

0.26

-0.29

-1.00

1.01

0.63

-0.33

0.80

-0.99

0.21

0.84

-1.02

0.21

1.09

-0.71

0.70

-0.58

-0.04

-1.42

0.19

-0.47

Japan

-0.05

2.45

-0.99

-0.98

1.12

-0.84

-0.42

0.10

0.31

-0.30

0.92

Peru

-0.06

-0.26

1.02

-0.36

-0.02

-0.36

-0.49

-1.02

0.99

0.12

-1.34

Turkey Chile

-0.06

0.62

0.77

1.05

1.05

-0.53

-0.20

-0.68

-0.35

-0.25

-0.98

-0.07

-0.77

0.37

-0.08

1.34

0.54

-0.64

0.31

-1.24

-0.16

-0.10

Mexico

-0.10

-0.29

0.98

-0.51

-1.01

-0.19

0.69

-0.80

-1.19

-0.42

-0.62

South Korea

-0.14

1.04

-0.13

-0.41

-0.18

-0.68

-0.56

0.18

0.59

-0.35

-0.08

France

Oman

-0.14

-0.62

-0.54

-1.14

1.13

-0.80

0.40

0.17

0.29

0.65

0.34

Phillippines

-0.15

0.42

1.10

-0.39

-0.31

-0.96

-0.10

-1.27

-1.11

0.03

-0.32

Spain

-0.15

-0.75

-0.64

-0.86

-0.87

0.15

0.82

0.25

-1.09

1.86

-0.95

Kuwait

-0.15

-0.69

1.25

-0.04

1.08

1.08

-2.02

-0.54

2.38

-0.47

-1.62

Brazil

-0.16

-0.35

0.75

-0.53

1.32

-0.64

-0.71

-1.01

-0.12

-0.02

-0.01

Indonesia

-0.16

-0.84

0.85

0.86

1.41

-0.21

-0.67

-1.57

-0.83

-0.14

-0.39

India

-0.19

-0.66

1.02

0.48

-0.88

-0.77

-0.31

-1.34

-1.78

0.70

-0.63

Germany

-0.21

0.75

-0.85

-0.81

-0.44

-0.14

-1.08

0.64

-0.74

-0.25

1.23

Czech Republic

-0.22

-0.57

-0.53

-0.44

0.53

-0.53

0.01

0.08

0.14

0.06

-0.02

Greece

-0.22

-1.06

-0.71

-0.46

0.02

-0.30

1.13

-0.19

-0.98

1.70

-1.88

Poland

-0.28

-0.27

-0.41

-0.27

0.41

-0.76

-1.39

-0.27

0.54

0.38

-0.33

Colombia

-0.28

-0.07

0.81

0.08

1.08

-0.11

-0.67

-0.89

-1.30

0.40

-1.43

Argentina

-0.33

-2.61

0.51

-1.09

-0.46

0.40

-0.45

-0.70

0.48

0.07

-0.98

Italy

-0.33

-0.49

-0.82

-1.02

-0.33

-0.04

-0.24

0.05

0.46

0.52

-1.28

Egypt

-0.38

-0.99

0.90

-0.58

2.48

-1.13

0.55

-1.58

-0.83

-0.46

-2.15

Russia

-0.74

-2.49

-0.36

0.04

-1.23

-1.08

-1.55

-0.94

1.26

0.31

-1.39

Source: Oxford Economics, WTTC Talent enabling environment: z score > 0 above average performance; z score < 0 below average performance

Talent enabling environment: Country comparison, Singapore versus Russia The comparison between Singapore and Russia’s talent enabling environment pillar z-scores provides an interesting contrast and clearly shows in which areas Singapore performs stronger, and where Russia needs to improve: customer service, labour market flexibility, openness, prioritisation of the industry, general quality of human resources and training.

Training Recruitment Spare lacompetition bour market capacity and female participation 10%

South Africa

41


Table 3.5: Travel & Tourism talent enabling environment pillar z-scores, Singapore versus Russia Travel & Tourism: Talent enabling environment pillar z score

SINGAPORE

RUSSIA

Customer service

0.84

-2.49

Demographics

0.01

-0.36


2.04

0.04

Industry relative attractiveness

-1.21

-1.23

Openness

1.07

-1.08

Prioritisation of Travel & Tourism and existing Travel & Tourism skills base

0.63

-1.55

Quality of general human resources

1.41

-0.94

Recruitment competition

0.43

1.26

-0.28

0.31

Training

0.89

-1.39

Overall

0.58

-0.74


Source: Oxford Economics, WTTC Talent enabling environment: z score > 0 above average performance; z score < 0 below average performance

42

3.3


43


Table 3.6: Travel & Tourism talent demand-supply balance projections and talent enabling environment ranks

Composite talent measure The results of the composite Travel & Tourism talent score ranks, combining analysis from both talent assessment methodologies, are presented in Table 3.6 overleaf. These rankings can be interpreted to show how the extent of Travel & Tourism talent ‘hotspots’ or ‘stretch points’ is expected to range between countries in future in terms of both the volume (supply less demand) and quality of the talent enabling environment. •

As Table 3.6 shows, the overall top and bottom 5 ranked countries are: Top 5 ranked: UAE, Qatar, US, Barbados and Bahrain. Bottom 5 ranked: Russia, Poland, Argentina, Italy and Greece.

•

•

Travel & Tourism: Talent demand-supply balance projections and talent enabling environmental ranks Combined

Methodology 1

Methodology 2

Talent demand Talent supply projections projections (2014-2024) (2014-2024) Weights

100%

10%

10%

Talent demand-supply balance projections (2014-2024)

Talent enabling environment

30%

50%

Rank difference: Talent demand-supply balance projections minus talent enabling environment

UAE

1

35

8

15

2

13

Qatar

2

34

12

22

1

21 10

US

3

17

22

16

6

In general, although not always, the top and bottom ranked countries rank relatively strong or weak for the talent demand-supply balance projections and the talent enabling environment scores.

Barbados

4

8

26

10

14

-4

Bahrain

5

39

2

4

17

-13

Canada

6

19

21

17

12

5

Switzerland

7

23

24

32

3

29

Table 3.6 also highlights differences in ranking results between the two methodologies. There are notable differences reflecting the two opposing but complementary concepts being measured: methodology 1 focuses on future demand and supply volume projections, while methodology 2 is more about current talent supply characteristics. In fact these differences help to explain some of the feedback from WTTC Member companies on which demand-supply balance projections were deemed to be too optimistic or pessimistic: too optimistic - India, Germany, Brazil and Indonesia (their talent enabling environment ranks are much weaker than their demand-supply balance ranks); too pessimistic – Taiwan and Thailand (their talent enabling environment ranks are stronger than their demand-supply balance ranks).

Australia

8

4

27

6

22

-16

Norway

9

1

39

3

23

-20

UK

10

13

29

26

9

17

Morocco

11

31

11

13

18

-5

Austria

12

7

42

29

7

22 -7

Source: Oxford Economics, WTTC Talent demand: 1 = best rank (weakest demand growth); 46 = worst rank (strongest demand growth) Talent supply: 1 = best rank (strongest supply growth); 46 = worst rank (weakest supply growth) Talent demand-supply balance: 1 = best rank (largest relative trend balance surplus); 46 = worst rank (largest relative trend balance deficit) Talent enabling environment: 1 = best rank; 46 = worst rank

South Africa

13

25

17

12

19

Malaysia

14

36

14

34

5

29 12

Bermuda

15

11

34

25

13

Saudi Arabia

16

44

1

21

16

5

Singapore

17

26

31

38

4

34

Philippines

18

29

5

1

32

-31

China

19

10

25

14

24

-10

Netherlands

20

16

28

31

15

16

Sweden

21

28

32

39

8

31

India

22

21

10

2

37

-35

Japan

23

3

45

18

25

-7

Costa Rica

24

42

15

41

11

30

Brazil

25

18

18

9

35

-26

Chile

26

15

23

20

28

-8

Oman

27

43

3

33

20

13

Mexico

28

33

13

19

29

-10

Indonesia

29

22

19

11

36

-25

Germany

30

2

41

7

38

-31

France

31

12

30

24

31

-7

Colombia

32

27

9

8

42

-34

Thailand

33

46

37

46

10

36

Spain

34

9

33

23

33

-10

Egypt

35

30

7

5

45

-40

South Korea

36

5

44

27

30

-3

Turkey

37

45

4

36

27

9

Kuwait

38

40

6

30

34

-4

Taiwan

39

32

38

44

21

23

Peru

40

41

16

42

26

16

Czech Republic

41

6

43

28

39

-11

Greece

42

14

36

35

40

-5

Italy

43

24

35

37

44

-7

Argentina

44

38

20

40

43

-3

Poland

45

37

40

45

41

4

Russia

46

20

46

43

46

-3

44


Figure 3.7 below plots results from both methodologies on a single chart. A number of observations can be made: Almost no countries are located in the ‘ideal’ (from a Travel & Tourism perspective) bottom right quadrant – these would be countries with a projected talent trend surplus and strong talent enabling environment. This is indicative of the general talent challenge facing the sector globally. Most countries are located to the left of the y-axis (indicating a projected talent balance deficit), but have a wide range of talent enabling environment ranks (although this is to be expected because by default a ranking measure will have low and high ratings). The least ‘ideal’ countries, from a sector talent perspective, are those in the top left quadrant. These are countries with a projected talent trend deficit and weak talent enabling environment. They include those countries which rank weakest for the combined composite ranks (column two of Table 3.6) such as Russia, Poland, Italy, Greece and Argentina. Countries such as Singapore and Switzerland, while also having projected talent trend deficits, at least have the advantage of top rankings for their Travel & Tourism talent enabling environment. That said, if the Travel & Tourism sector in these countries struggles to exploit this strong talent enabling environment – for example if it is unable to hire the workforce that it needs – the enabling environment will be of limited benefit to the sector.

Fig 3.7: Travel & Tourism talent demand-supply balance projections and talent enabling environment ranks Travel & Tourism: Talent trend and talent enabling environment TOP RANK -------- Talent enabling environment -------- BOTTOM RANK

Travel & Tourism: Talent trend and talent enabling environment TALENT PROJECTED TREND DEFICIT WEAK TALENT ENABLING ENVIRONMENT

50

Italy

Russia

Egypt

45

Argentina Greece Poland

40

India 35

Brazil

30 25

Peru

China 20

Taiwan

Bahrain

15

Thailand

10

US Singapore Switzerland

5

TALENT PROJECTED TREND SURPLUS STRONG TALENT ENABLING ENVIRONMENT

0 -4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

DEFICIT ---------- Talent balance projected trend (2014-2024) ---------- SURPLUS



4.0


45

Economic cost impact of talent gaps and deficiencies Talent challenges directly affect the sustainable growth of Travel & Tourism as well as the day-to-day operations and bottom-line of companies. Overall impacts of these challenges are manifested in a number of ways, including: •

Below-potential growth and lower employment

•

Reduced investment and less innovation

•

Upward pressure on wages leading to higher operating costs and reduced profits, which combined with other factors would lower productivity

•

Eroded competitiveness and inferior customer service and quality standards

•

Higher recruitment and advertising costs, higher training costs, reduced returns to training and increased workload on and lower morale amongst existing staff, all resulting from high staff turnover

46

4.1


Economic cost impact assumptions It is not possible, or within the scope of this study, to model all of the above impacts in detail. But what can be done, in a stylised way, is to combine the principle of these impacts, with the results of the talent balance projection and enabling environment analysis, to arrive at assumptions to model the macroeconomic cost impact of Travel & Tourism talent gaps and assumptions. These assumptions are summarised in Table 4.1 overleaf and described next. •

•

•

Employment adjustment: The impact of projected talent trend deficits is modelled by reducing Travel & Tourism direct employment growth, in each year to 2024, for each country projected to experience a talent trend deficit. This assumes that the sector would struggle to supply its talent volume requirement and Travel & Tourism would therefore grow at a rate below its full potential. The precise assumption used is to take the minimum projected talent trend deficit figure for the medium and long-term, adjusted by a factor of 0.75, and deduct this from baseline direct employment growth. The less than full adjustment factor of 0.75 assumes that Travel & Tourism would find some way to mitigate part of the projected talent trend deficit, but not the entire deficit. Some of the feedback from WTTC member countries has also been incorporated directly into fine-tuning the employment impact assumptions in terms of which talent balance projections were deemed to be too optimistic and too pessimistic. Labour market productivity adjustment: The impact of a weak Travel & Tourism talent enabling environment, as well as the pressures caused by projected talent trend deficits, are modelled by reducing Travel & Tourism direct labour productivity growth relative to the baseline in each year to 2024. Only countries ranked in the bottom half of the composite talent ranks have their productivity adjusted. Within this group of countries, the bottom third (ranked 39 to 46) have an annual average productivity growth adjustment of -1.5 percentage points compared to the baseline, the middle third (ranked 31 to 38) a -1.0 percentage point adjustment and the upper third (ranked 23 to 30) an adjustment of -0.5 percentage points. This reduction in labour market productivity growth captures a host of impacts: reduced bottom-line profitability, reduced innovation, eroded competitiveness and negative effects from high staff turnover. Indirect and induced impact adjustments: The impact of talent gaps and deficiencies is primarily modelled in terms of its impact on direct Travel & Tourism employment and GDP (the latter via effects on both employment and labour market productivity). But this will also affect the indirect and induced contribution of Travel & Tourism via multiplier effects. This impact is therefore modelled by assuming the same employment and GDP multipliers as the baseline scenario for each country, and applying the same indirect and induced labour productivity levels (the latter should not be directly affected by talent challenges in Travel & Tourism). There could be an additional impact on Travel & Tourism’s indirect contribution via reduced investment but this would be difficult to model and derive an impact assumption from the talent analysis.

47


Table 4.1: Economic cost impact assumptions of Travel & Tourism talent gaps and deficiencies

Travel & Tourism: Country economic cost impact of talent gaps and deficiencies assumptions

(2014-2024 pp adjustment to annual average growth versus baseline) Employment

Labour productivity

Thailand

-2.3

-1.0

Poland

-1.5

-1.5

Taiwan

-1.5

-1.5

Russia

-1.5

-1.5

Argentina

-1.3

-1.5

Italy

-1.3

-1.5

Peru

-1.2

-1.5

Turkey

-1.5

-1.0

Czech Republic

-1.0

-1.5

Greece

-0.8

-1.5

Costa Rica

-1.5

-0.5

France

-0.7

-1.0

South Korea

-0.7

-1.0

Colombia

-0.6

-1.0

Spain

-0.7

-1.0

Oman

-1.1

-0.5

Kuwait

-0.6

-1.0

Malaysia

-1.3

0.0

Morocco

-1.3

0.0

Sweden

-1.2

0.0

Singapore

-1.2

0.0

Switzerland

-1.2

0.0

Saudi Arabia

-1.2

0.0

Japan

-0.6

-0.5

Indonesia

-0.6

-0.5

Bermuda

-1.0

0.0

Egypt

0.0

-1.0

Chile

-0.5

-0.5

Austria

-1.0

0.0

Bahrain

-1.0

0.0

Brazil

-0.5

-0.5

Mexico

-0.4

-0.5

UK

-0.8

0.0

Germany

-0.3

-0.5

UAE

-0.7

0.0

Canada

-0.7

0.0

Netherlands

-0.7

0.0

South Africa

-0.7

0.0

Barbados

-0.6

0.0

Qatar

-0.5

0.0

China

-0.4

0.0

US

-0.4

0.0

Australia

-0.4

0.0

India

-0.4

0.0

Norway

0.0

0.0

Philippines

0.0

0.0


48


4.2


49

Economic cost impact results: 14 million jobs and nearly US$610 billion GDP by 2024 The impact results of Travel & Tourism talent gaps and deficiencies are presented in Table 4.2 (global impacts) and Table 4.3 overleaf (individual country impacts). Note global impacts relate to the sum of impacts for the 46 countries covered by this study. Recall these countries account for 81% and 88% of direct world Travel & Tourism employment and GDP respectively, so capture the majority of the global sector. •

In terms of direct impacts, talent gaps and deficiencies could cost the global economy: 5.5 million jobs and US$270 billion GDP (measured in 2013 prices and exchange rates). This is compared to the baseline projected level in 2024. Cumulative direct GDP impacts would be even larger over a ten-year period. This is equivalent to lowering the level of global direct Travel & Tourism employment by 4.4% compared to the baseline projected level in 2024, and global direct Travel & Tourism GDP by 8.0% (the combined effect of lower employment and lower productivity). Annual average global direct Travel & Tourism employment growth to 2024 would slow from 2.0% in the baseline scenario to 1.6%, and GDP long-run average growth from 4.2% to 3.3%.

•

14.1 million jobs and around US$610 billion GDP (measured in 2013 prices and exchange rates) compared to the baseline projected level in 2024 (again cumulative total GDP impacts would be even larger over a ten-year period).

This does not mean that the demand-orientated forecasts in WTTC’s annual economic impact research are over-optimistic or invalid, but stress the need for some countries to take greater action to tackle talent challenges in order to realise the growth potential of their Travel & Tourism sectors.

Table 4.2: World economic cost impact of talent gaps and deficiencies Travel & Tourism: World economic cost impact of talent gaps and deficiencies (2024 versus baseline)

UNITS

DIRECT

TOTAL

Millions

-5.5

-14.1

%

-4.4%

-4.0%

US$ bn 2013 prices & exchanges rates

-270

-607

%

-8.0%

-5.5%

T&T employment

T&T GDP


In terms of total impacts, adding the indirect and induced impacts, talent gaps and deficiencies could cost the global economy:

This is equivalent to lowering the level of global total Travel & Tourism employment by 4.0% compared to the baseline projected level in 2024, and global direct Travel & Tourism GDP by 5.5% (this relative impact is lower than the direct GDP impact because indirect and induced labour productivity is unchanged). •

In terms of individual country impacts: Largest relative impacts: Relative to the size of their respective Travel & Tourism total economic contribution in 2024, countries most negatively impacted by talent gaps and deficiencies, in employment and GDP terms, include: Thailand, Russia, Poland, Taiwan, Italy and Turkey. Poland’s annual average direct Travel & Tourism employment growth to 2024 would slow from 3.2% in the baseline scenario to 1.7%. Taiwan’s annual average direct Travel & Tourism GDP growth to 2024 would slow from 3.3% in the baseline scenario to 0.3%. Largest absolute impacts: Given the size of Travel & Tourism markets in each country, the largest absolute total job impacts would occur in China, Thailand, India, Indonesia and US, and the largest absolute GDP impacts in China, US, Italy, Russia and France. It is evident from Table 4.3 that the impacts for the majority of countries are negative. Although the relative scale of impact varies from a relatively negligible to a sizable impact, with those countries facing sizable negative impacts most at risk from talent gaps and deficiencies.

50



Travel & Tourism: Country economic cost impact of talent gaps and deficiencies (2024 versus baseline) Total T&T employment

Total T&T GDP

US$ bn 2013 prices & exchange rates unless stated

000s unless stated

Impact

% Impact

2024 baseline

Impact

% Impact

2024 baseline

China

-3,773

Thailand

-20%

8,255

China

-78

Thailand

-23%

137

Thailand

-1,617

Russia

-14%

4,647

US

-76

Poland

-19%

45

India

-1,584

Taiwan

-14%

814

Italy

-43

Taiwan

-18%

36

Indonesia

-647

Poland

-14%

1,027

Russia

-36

Italy

-17%

251

US

-647

Costa Rica

-14%

355

France

-32

Russia

-17%

216

Russia

-640

Turkey

-14%

3,047

Thailand

-32

Turkey

-17%

158

Brazil

-467

Italy

-12%

3,094

UK

-28

Argentina

-16%

66

Turkey

-412

Argentina

-12%

2,219

Japan

-27

Peru

-16%

37

Mexico

-385

Malaysia

-12%

2,648

Turkey

-26

Costa Rica

-15%

10

Italy

-372

Morocco

-12%

2,429

Spain

-24

Czech Rep.

-14%

24

UK

-352

Sweden

-11%

716

Brazil

-19

Greece

-13%

53

Malaysia

-312

Peru

-11%

1,676

Mexico

-17

Oman

-12%

10

Morocco

-281

Singapore

-11%

354

Indonesia

-11

Malaysia

-12%

84

Argentina

-265

Switzerland

-11%

561

Argentina

-11

Morocco

-12%

36

Japan

-264

Saudi Arabia

-11%

599

Malaysia

-10

Sweden

-11%

87

France

-219

Oman

-10%

116

Sweden

-10

Singapore

-11%

51

Spain

-192

Bermuda

-10%

9

Canada

-9

Switzerland

-11%

57

Peru

-189

Austria

-9%

674

South Korea

-9

Saudi Arabia

-11%

53

Poland

-140

Czech Rep.

-9%

577

India

-9

France

-10%

310

Taiwan

-111

Bahrain

-9%

121

Poland

-8

South Korea

-10%

92

South Africa

-111

Greece

-8%

846

Germany

-8

Bermuda

-10%

1

South Korea

-104

UK

-8%

4,662

Australia

-8

Spain

-10%

251

Colombia

-92

UAE

-7%

696

Greece

-7

Austria

-9%

68

Canada

-86

France

-7%

3,262

Taiwan

-7

Colombia

-9%

31

Sweden

-81

Canada

-7%

1,286

Austria

-6

Bahrain

-9%

6

Greece

-67

Netherlands

-7%

932

Switzerland

-6

Kuwait

-9%

13

Saudi Arabia

-65

South Korea

-6%

1,624

Peru

-6

UK

-8%

375

Australia

-64

South Africa

-6%

1,774

Saudi Arabia

-6

Japan

-7%

381

Switzerland

-61

Spain

-6%

3,077

Singapore

-6

Indonesia

-7%

158

Netherlands

-61

Colombia

-6%

1,494

Netherlands

-4

UEA

-7%

51

Australia

-60

Barbados

-6%

54

Morocco

-4

Canada

-7%

136

Germany

-55

Japan

-6%

4,660

UEA

-3

Netherlands

-7%

65

Czech Rep.

-54

Indonesia

-5%

11,957

Czech Rep.

-3

Chile

-7%

39

Costa Rica

-48

Kuwait

-5%

135

South Africa

-3

South Africa

-6%

50

UAE

-48

Chile

-5%

801

Colombia

-3

Brazil

-6%

309

Singapore

-40

Qatar

-5%

121

Chile

-2

Barbados

-6%

2

Chile

-38

Brazil

-4%

10,684

Egypt

-2

Mexico

-6%

289

Oman

-12

China

-4%

93,039

Costa Rica

-2

Qatar

-5%

28

Bahrain

-11

Mexico

-4%

9,602

Qatar

-1

Egypt

-4%

51

Egypt

-10

US

-4%

17,560

Oman

-1

Germany

-4%

198

Kuwait

-7

Australia

-4%

1,636

Kuwait

-1

China

-4%

1,933

Qatar

-6

India

-4%

43,837

Bahrain

-1

US

-4%

2,056

Barbados

-3

Germany

-2%

2,187

Barbados

0

Australia

-4%

213

Bermuda

-1

Egypt

0%

3,673

Bermuda

0

India

-4%

239

Norway

0

Norway

0%

43

Phillippines

0

Phillippines

0%

54

Norway

0

Norway

0%

224

Phillippines

0

Phillippines

0%

5,491

Annex A

Table 4.3: Country economic cost impact of talent gaps and deficiencies

51

Literature review bibliography Australia Government 2012: Tackling labour and skills issues in the tourism and hospitality industry: A guide to developing tourism employment plans: https://www.austrade.gov.au/Tourism/ Policies/National-long-term-strategy/Working-groups/Labour-and-Skills British Columbia Labour Market Strategy: http://www.jtst.gov.bc.ca/skills_for_growth/ British Columbia Tourism Labour Market Strategy: https://www.go2hr.ca/research/bc-tourismlabour-market-strategy Canadian Tourism Research Institute – The Future of Canada’s Tourism Sector: http://cthrc. ca/en/research_publications/~/media/Files/CTHRC/Home/research_publications/labour_market_ information/Supply_Demand/SupplyDemand_Report_Current_EN.ashx CEDEFOP – Future skills supply and demand in Europe CEDEFOP Panorama series 115 – Trends and Skills Needs in Tourism: http://www.cedefop. europa.eu/EN/Files/5161_en.pdf E&Y Tracking global trends: How six key developments are shaping the business world Demographic shifts transform the global workforce India Hospitality Review - Shortage of Skilled Manpower in Hospitality Industry: http://www. indiahospitalityreview.com/article/shortage-skilled-manpower-hospitality-industry Local Government’s engagement in tourism – Australia (2006): http://www.lga.sa.gov.au/ webdata/resources/files/Local_Governments_Engagement_in_Tourism_-_July_2006.pdf Manpower Group - 2013 Talent Shortage Survey Results: http://www.manpowergroup.com/ wps/wcm/connect/587d2b45-c47a-4647-a7c1-e7a74f68fb85/2013_Talent_Shortage_Survey_ Results_US_high+res.pdf?MOD=AJPERES Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/ media/137404/2014_talent_shortage_wp_us2.pdf McKinsey and Company – The State of Human Capital 2012: http://www.mckinsey.com/client_ service/organization/expertise/human_capital McKinsey Global Institute - Talent tensions ahead: A CEO briefing, Richard Dobbs, Susan Lund, and Anu Madgavkar: http://www.mckinsey.com/insights/economic_studies/talent_tensions_ ahead_a_ceo_briefing Navigating the next phase of Asia’s tourism: http://www.yoursingapore.com/TravelRave/ resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourism.pdf New Zealand Tourism and Hospitality Workforce Strategy: http://www.tianz.org.nz/content/ library/TourismHospWkbkLR1.pdf and Shortage of Skilled Manpower in Hospitality Industry, Kamlesh Barot, President, FHRAI magazine New Zealand Tourism Skills Shortage Report: http://www.dol.govt.nz/PDFs/industry-profiletourism.pdf Rwanda Development Board – Rwanda Skill Survey 2012 – T&H Report: http://www.lmis.gov. rw/scripts/publication/reports/Tourism.pdf Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC), ‘Enhancing the Capacity of Tourism Workforce In the OIC Member Countries For Improved Tourism Service Quality (2014). Talent shortage becomes major bottleneck for Hainan tourism development: http://www. whatsonsanya.com/news-18722.html The Boston Consulting Group: Creating people advantage 2011 - Time to Act: HR certainties in uncertain times: http://www.bcg.com/documents/file87639.pdf The Hospitality Talent Gap, China Business Review: http://www.chinabusinessreview.com/thehospitality-talent-gap/ UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces. org.uk/publications/er55-sector-skills-insights-tourism UK State of Nation Report 2013: http://www.people1st.co.uk/research/reports/state-of-thenation-hospitality-and-tourism UNDP 2013 Human Development Report: http://hdr.undp.org/en/2013-report World Economic Forum Travel & Tourism Competitiveness Report 2013: http://www.weforum. org/reports/travel-tourism-competitiveness-report-2013

52


Annex B

Analytical methodologies to assess talent •

Annex B provides an overview of the quantitative approaches used to assess country-by-country Travel & Tourism talent demand, supply and imbalances, and the talent enabling environment in each country.

•

The two main approaches, which are then combined to produce a composite country ranking, are: 1.Talent demand-supply balance projections; and 2.Talent enabling environment analysis.


53

The 46 countries covered by Oxford Economics’ Global Talent service is the same list of countries covered in this research study. This geographically diverse list encompasses all of the world’s major economies, including: the G8, the BRICs, other industrialised nations, other emergers such as Mexico, UAE, South Africa, Indonesia and Singapore, and economies where Travel & Tourism is a particularly important sector like Barbados, Morocco, Turkey and Thailand. The 46 countries account for 81% and 88% of direct world Travel & Tourism employment and GDP respectively.

Travel & Tourism talent demand projections

Methodology 1: Talent demand-supply balance projections

•

For each country, aggregate industry talent demand projections are taken straight from the direct Travel & Tourism employment series from WTTC’s annual economic impact research.

Source of demand and supply projections

•

The breakdown of Travel & Tourism talent demand by occupation and highest education attainment level is based on the weighted sector matrices from Oxford Economics’ Global Talent service. This is necessary because Travel & Tourism is not an officially classified statistical industry sector on its own, but instead is a combination of multiple industry sectors. According to published country TSAs, the majority of Travel & Tourism direct employment is in the following industries: hotels & catering, transportation, wholesale & retail and other personal services. The precise weights used for each country are based on rounded average data from eight diverse countries which published detailed TSA Travel & Tourism employment data. This allocates an employment weight of 55% to hotels & catering and an equal 15% weighting to the three other sectors. The occupation and highest education attainment breakdown from each of these four sectors, taken from Oxford Economics’ Global Talent service, is then weighted to produce the breakdowns for Travel & Tourism as a whole.

•

The underpinning evidence base for talent demand-supply balance projections are WTTC’s annual economic impact research and Oxford Economics’ Global Talent service. A brief background on both is provided next.

•

WTTC annual economic impact research: WTTC’s annual economic impact research covers historic series and forecasts for simulated Tourism Satellite Accounts (TSA) for 184 countries from 1988 to 2024. This provides a comprehensive assessment of the direct economic size of the Travel & Tourism sector (in GDP and employment terms), individual segments (e.g. business versus leisure and domestic versus international) and the sector’s links with other sectors and broader economic contribution in terms of its indirect and induced contribution. By using the direct Travel & Tourism employment series from WTTC’s annual economic impact research, this ensures consistency between this research and WTTC’s published employment series for Travel & Tourism.

•

Oxford Economics Global Talent service: Oxford Economics’ Global Talent service provides decision-makers with pioneering global research into how major economic, business, and market shifts are transforming the global need for talent, along with how demographic, education, and technology trends are reshaping the future supply of talent. The full service covers three interlocking components: (1) data and forecasts on talent, employment, business, economic, and demographic trends in 46 countries and 18 industry sectors; (2) corporate insights and strategies for managing talent in a time of business transformation; and (3) preferential access to Oxford Economics’ team of economists, business analysts, and information services. In other words the Global Talent service is a rich source of both talent demand and supply historic data and projections. Talent demand information comprises a breakdown of employment by industry, occupation and education attainment level. Talent supply information encompasses demographics and migration, labour supply and participation rates, a breakdown of the talent supply stock by broad education attainment level, and a breakdown of graduate supply by broad subject.

Travel & Tourism talent supply projections •

Aggregate Travel & Tourism talent supply projections are created from weighted education attainment level labour supply forecasts from Oxford Economics’ Global Talent service. These forecasts encompass a range of supply dynamics including demographics, migration, labour participation rates and shifts in education participation and attainment.

•

The weights for each education attainment level are based on the education attainment breakdown of each country’s Travel & Tourism employment / talent demand series. To give an example, the weights for the US in 2014 are as follows: college level (50%), high school level (47%) and below high school level (3%). The weights for the UAE are: college level (14%), high school level (54%) and below high school level (32%). Although the weights should not necessarily be fixed but instead vary in line with changes in the structure of demand over time, actual changes in demand over the period under consideration are relatively small. Varying with weights would make minimal difference to the Travel & Tourism talent supply projections.

54


Travel & Tourism talent demand-supply balance projections Travel & Tourism talent demand-supply balance projections are calculated as: the percentage point difference in the projected growth in Travel & Tourism talent supply minus the projected growth in Travel & Tourism talent demand. This measures whether the Travel & Tourism talent balance position will get better (a positive percentage growth difference) or worse over time (a negative percentage growth difference). To be clear, methodology 1 does not quantify Travel & Tourism’s talent demandsupply balance today. This can only be obtained by undertaking a very detailed survey of the sector with a large sample size. Methodology 1 instead measures whether the talent balance position will get better or worse over time versus today by comparing growth rates in the demand for and supply of talent. Methodology 1 also does not produce a detailed, quantified projection of the talent demand, supply and balance of specific Travel & Tourism job roles and sectors, e.g. for pilots and chefs, or hotels and air transport. This would require much more granular data than is currently available from the two main evidence bases used.

Methodology 2: Talent enabling environment analysis •

Methodology 1 provides a robust high-level and forward-looking snapshot of Travel & Tourism talent demand and supply, and whether the talent balance trend will be a deficit or surplus.

•

To complement methodology 1, methodology 2 considers in more depth current talent supply characteristics which are identified from literature as important to the sector. These characteristics are converted into an overall talent enabling environment rank (in a similar way to how global indices like the World Economic Forum competitiveness index are compiled).

Talent enabling environment pillar framework •

The framework for assessing each country’s Travel & Tourism talent enabling environment is based around the following pillars. These pillars are informed by the general literature review (as opposed to any specific report which defines characteristic of the sector’s talent enabling environment), pillars used in economy-wide talent indices and practically also by the actual data which exists. A pillar for education is not directly included because education attainment levels of labour supply are analysed under methodology 1.

A brief description is provided to explain the rationale for each pillar and how it relates to a stronger or weaker Travel & Tourism enabling talent environment.


55

1. Customer service: Countries with a stronger customer service base – an essential skill for Travel & Tourism – are assumed to have a more enabling talent environment for the sector. 2. Demographics: Given the structural characteristics of the Travel & Tourism workforce, countries with more youthful workforces and a lower share of workers nearing retirement are associated with a more enabling talent environment. 3. Flexibility of labour market: A more flexible labour market is positively correlated with a more enabling talent environment. 4. Industry relative attractiveness: Countries where Travel & Tourism jobs are perceived to be relatively less attractive than the economy-average job – proxied by the share of jobs in higher versus lower grade and paid roles are assumed to have a less enabling talent environment. 5. Openness: More open economies, in terms of the ease of hiring foreign, high quality labour, are associated with a more enabling talent environment. 6. Prioritisation of Travel & Tourism and existing Travel & Tourism skills base: Countries where Travel & Tourism as a sector is prioritised – by government and the education & training system - and where there is a strong tradition in Travel & Tourism and meeting its talent needs, is assumed to be a positive characteristic for the enabling talent environment. 7. Quality of general human resources: A general high quality of human resources across the economy is positively correlated with a more enabling talent environment. 8. Recruitment competition: Countries where Travel & Tourism faces stiff recruitment competition from other industries requiring similar types of talent, such as retail, is assumed to result in a less enabling talent environment. Forecast growth in Travel & Tourism employment is benchmarked against retail employment growth. 9. Spare labour market capacity and female participation: A tight labour market, as measured by the unemployment rate, and low female labour participation rates, are associated with a less enabling talent environment due to the lack of available domestic talent and under-utilised female talent (recall Travel & Tourism in general is more female-orientated). 10. Training: Economies where company training of its employees is more frequent and of higher quality is associated with a more enabling talent environment.

56


Talent enabling environment pillar proxy variables •

In an ideal situation, a single perfect variable would exist to quantify and measure a country’s talent performance for each pillar. Instead, as is the case with the majority of global indices, especially those without a large bespoke survey to complement secondary data, it is necessary to: Identify proxy variables that relate closest to these pillars; These variables must have data available across all or most of 46 countries covered by this study48; and There must be an unambiguous ranking order for each variable from a ‘best’ to ‘worst’ score.

•

The full list of proxy variables used is summarised in Table 3.1 overleaf.

•

As evident from the table, across the ten pillars a total of 25 variables are utilised. The main data sources are: UN, OECD, International Labor Organisation (ILO), World Economic Forum Travel & Tourism Competitiveness Report (with several variables taken from the index’s human resource pillar), Oxford Economics Global Talent database, INSEAD Global Talent Competitiveness Index and the Heidrick & Struggles Global Talent Index (compiled by the Economist Intelligence Unit).

•

•

The variables are a mixture of hard statistical figures compiled by statistic agencies and executive survey questions. While the latter are arguably subjective, there are no alternatives and their inclusion is preferable as opposed to excluding an important dimension of Travel & Tourism’s enabling talent environment. Data for each variable are standardised using z-scores, as is done for many global indices. Z-scores are preferable to ranking on a variable-by variable basis because the latter approach potentially exaggerates differences between countries because countries falling within a large rank range may actually differ little in value terms.

Table A.1: Talent enabling environment pillar proxy variables Travel & Tourism: Talent enabling environmental pillar variables and sources Pillar and variable Customer service

Degree of customer orientation

To include as broad a range of relevant variables as possible, some estimation of data was required to fill gaps. This involve using data for similar countries where it existed or estimating based on other variables where full country data exists.

Year

Source

Additional detail

Executive opinion survey question: How well do companies in your country treat customers?

2013

WEF T&T Competitiveness Report

2014 2014 2014 2014

2014-2024

UN UN UN UN UN UN UN

2013


Executive opinion survey question: How would you charicterize the hiring and firing of workers in your country?

2014

Oxford Economics Global Talent

High level occupations sum of executives, professional and technical & administrative roles

Openness Net migration % total population International migrant stock % total population Ease of hiring foreign labour

2008 - 2012 2013 2013

OECD UN WEF T&T Competitiveness Report

Qualified labour inflow

2013

INSEAD Global Talent Competitiveness Index

Executive opinion survey question from WEF: Does your country retain and attract talented people?

Prioritisation of T&T and existing T&T skills base Government prioritisation of T&T industry

2013


Executive opinion survey question: How much of a priority is the development of the T&T industry for the government of your country?

2014

WTTC/Oxford Economics Annual Economic Impact Research

Quality of general human resources INSEAD Global Talent Competitiveness Index overall score

2013


Heidrick & Struggles Global Talent Index overall score Quality of labour force

2015 2015

Heidrick & Struggles Global Talent Index Heidrick & Struggles Global Talent Index

Talent environment

2015

Heidrick & Struggles Global Talent Index

Availability of qualified labour

2013

WEF T&T Competitiveness Report (Sub-pillar measure)

Recruitment competition Wholesale & retail employment demand growth Wholesale & retail employment demand growth pp difference T&T employment demand growth

2014 - 2024 2014 - 2024

Oxford Economics Global Talent Oxford Economics Global Talent

Latest available

ILO

Female labour force participation rate pp difference total labour force participation rate

Latest available

ILO

Unemployment rate

2014

ILO

Training Extent of staff training

2013


Executive opinion survey question: To what extent do companies in your country invest in training and employee development?

Local availability specialised research & training

2013


Executive opinion survey question: In your country, to what extent are high-quality, specialized training services available?

Demographics 15-24% total population 15-39% total population 15-64% total population 50-64% 15-64 population 15-24% total population pp change in share 15-39% total population pp change in share pp change in 15-64% total population Flexibility of labour market Hiring and firing practices

Industry relative attractiveness High level occupation share T&T minus whole economy

T&T direct employment % total economy employment

Spare labour market capacity & female participation Female labour force participation rate

48

57


Executive opinion survey question: To what extent does labour regulation in your country limit the ability to hire foreign labor?

Composite sub-index comprising: researchers and technicians in R&D (UNESCO, World Bank, EIU); quality of workforce, language skills of workforce, technical skills of workforce and local managers (EIU business environment rankings) Composite sub-index comprising: R&D % GDP, degree of restrictiveness of labour laws and wage regulation (EIU business environmet rankings): protection of intellectual and private property and meritocratic remuneration (EIU risk briefing)

58



Talent enabling environment pillar equal weights •

To produce an overall Travel & Tourism talent enabling environment z-score and rank, it is necessary to weight each of the pillars.

•

As is the case with most composite indices like this, there are no ‘hard and fast’ rules to inform what the value of these weights should be. This is in terms of whether they should be equal or vary, and whether they should be the same for each country.

•

The standard technical practice, and most transparent and least controversial approach, is to uniformly apply equal weights to all pillars and all countries. This is the approach adopted for this study.

Gulf Cooperation Council (GCC) larger weight for openness and labour market flexibility: A larger weight (50%) is applied to the openness pillar for the following countries only: Qatar, UAE, Bahrain, Kuwait, Oman and Saudi Arabia. This reflects the much greater importance and role of foreign labour in these countries, especially for Travel & Tourism, and consequently the reduced importance of domestic talent measures. A larger weight of 20% is also applied to the labour market flexibility pillar as this is closely linked to the openness pillar. Gulf Cooperation Council smaller weight for openness and labour market flexibility: Although foreign labour is more important today in GCC countries, many of these countries have aspirations to reduce the foreign share of the workforce. Thus it is useful to analyse their talent enabling environment today with a zero weight for the openness and labour market flexibility pillars. In truth the effect of foreign labour permeates across other pillars – customer service, demographics, industry relative attractiveness and quality of general human resources – so it is difficult with the available data to make a true assessment of the talent enabling environment in GCC countries related solely to the national workforce.

Table A.2: Talent enabling environment pillar weights Travel & Tourism: Talent enabling environmental pillar Weights

Customer service

10.0%

Demographics

10.0%


10.0%

Industry relative attactiveness

10.0%

Openness

10.0%


10.0%

Quality of human resources

10.0%


10.0%


10.0%

Training

10.0%

Sum

100.0%

59

•

Sensitivity analysis country ranks are compared to the core equal weighting rank results in Annex C, highlighting which country ranks change by most and in which direction.

Composite talent measure combining results of methodologies 1 and 2 As methodologies 1 and 2 are complementary, their respective rankings can be weighted as per below to produce an overall Travel & Tourism composite talent rank. Like for the talent enabling environment measure, there are no obvious rules to inform the choice of these weights so an uncontroversial approach to weight each equally is applied. •


Weight for methodology 1: Talent demand-supply balance projections = 50% Talent demand projections – weight = 10% Talent supply projections – weight = 10%

Talent enabling environment pillar weights sensitivity analysis •

That said, on the basis of the literature review, and known differences in talent markets across countries, a case can be made for applying non-equal pillar weights and different pillar weights for different groups of countries.

•

In Annex C, sensitivity analysis is presented for the following: Non-equal pillar weights: Larger weights are applied to the following pillars on the basis of their implied relative importance from the literature review: demographics, industry relative attractiveness, openness and recruitment competition.

Talent demand-supply balance projections – weight = 30% •

Weight for methodology 2: Talent enabling environment analysis = 50%

The country rankings developed, from combining methodologies 1 and 2 to produce an overall Travel & Tourism composite talent rank, can be interpreted to show how the extent of Travel & Tourism talent ‘hotspots’ or ‘stretch points’ is expected to range between countries in future in terms of both the volume (supply less demand) and quality of the talent enabling environment.

60


Annex C

Travel & Tourism: Customer Demographics service

Flexibility Industry of labour relative market attractiviness

Talent enabling environment pillar variable z scores Openness

Prioritisation of T&T Quality of general human resources and existing T&T skills base


Spare labour market capacity Training and female participation

Degree of customer orientation

15-24% total population



50-64% 15-64 population

pp change Hiring in 15-64% and firing total pop- practices ulation

High level occupation share T&T minus whole economy

Net migration % total population

International migrant stock % total population

Ease of hiring foreign labour

Qualified labour inflow

Government prioritisation of T&T industry

T&T direct employment % total economy employment

INSEAD Global Talent Competitiveness Index overall score

Heidrick & Struggles Global Talent Index overall score

Quality of labour force

Talent environmet

Availability of qualified labour

Wholesale & retail wmployment demand growth

Wholesale & retail wmployment demand growth pp difference T&T employment demand growth

Female labour force participation rate

Female labour force participation rate pp difference total labour force participation rate

Unemployment rate

Extent of staff training

Local availability specialised research & training

2013

2014

2014

2014

2014

20142024

2013

2014

20082012

2013

2013

2013

2013

2014

2013

2015

2015

2015

2013

20142024

20142024

Latest available

Latest available

2014

2013

2013


UN

UN

UN

UN

UN



OECD

UN




WTTC/ Oxford Economics Annual Economic Impact Research







Oxford ILO Economics Global Talent

ILO

ILO



Argentina

-2.61

0.78

0.28

-0.46

0.70

0.94

-1.09

1.08

-0.20

-0.21

1.02

-0.68

-0.61

-0.29

-0.73

-0.12

-0.09

-1.49

-0.82

-0.09

0.73

-0.50

-0.08

0.31

-1.29

-0.67

Australia

0.48

-0.20

-0.24

-0.18

-0.05

-0.65

-0.65

-0.65

0.09

0.96

-1.44

-0.02

0.35

0.20

0.81

1.53

1.37

0.66

-0.42

0.94

-0.15

0.72

0.37

0.00

0.16

0.77

Austria

1.54

-0.65

-0.62

-0.02

-0.43

-0.36

-0.20

0.46

0.08

0.35

-0.66

-0.06

0.91

0.73

0.85

0.59

0.77

1.49

0.11

1.20

0.40

0.38

0.38

-0.18

0.64

1.86

Bahrain

-0.13

0.26

1.59

1.89

1.88

1.20

0.58

-0.19

2.29

2.33

0.66

0.48

0.63

0.08

-0.26

-0.66

-1.71

-1.08

0.48

-1.01

-0.04

-0.64

-2.24

-0.05

0.25

-0.26

Barbados

-0.71

0.02

-0.16

0.62

-0.23

-0.46

0.98

-0.21

-0.14

0.13

-0.53

0.52

1.51

3.00

0.41

0.63

0.47

0.52

0.17

0.19

-0.49

1.00

0.57

0.69

0.10

-0.26

Bermuda

-0.71

0.02

-0.16

0.62

-0.23

-0.46

0.98

-0.03

-0.14

1.04

-0.53

0.52

1.51

2.65

0.41

0.47

0.52

0.17

-0.98

-1.39

2.29

0.77

2.23

0.10

-0.26

Brazil

0.63

-0.35

0.91

-0.52

0.30

0.82

1.16

-0.53

1.08

-0.21

-0.43

-1.02

0.10

-1.01

-0.41

-0.92

-0.59

-0.60

-0.75

-1.46

0.07

-0.20

0.07

-0.01

-0.05

0.01

-0.04

0.82

-0.40

-0.40

0.17

-0.56

-1.17

1.75

-0.68

0.35

0.61

-0.36

0.68

0.14

-0.95

0.96

1.47

1.48

0.66

1.15

0.24

-0.04

1.02

0.60

0.13

0.31

0.99

Chile

-0.77

0.77

0.16

0.37

0.33

0.00

-0.08

1.15

-0.14

-0.33

1.00

0.44

-0.93

-0.35

0.18

-0.03

-0.31

0.25

0.79

-1.09

-1.31

-0.35

-0.35

-0.04

-0.13

-0.06

China

-1.02

0.20

0.15

1.16

0.34

-0.57

1.19

1.01

-0.15

-0.44

1.52

-0.29

-0.72

-0.44

-0.45

-0.11

-0.81

-0.17

0.69

-1.10

-1.56

1.35

0.55

-0.32

-0.34

-0.60

Colombia

-0.07

1.29

0.45

-0.17

0.96

1.10

0.08

0.41

-0.20

0.43

0.42

-1.60

-0.57

-0.77

-1.40

-0.69

-0.68

-1.08

-0.45

-1.50

-1.22

0.05

-0.19

0.70

-1.88

-0.98

Costa Rica

0.07

1.22

0.64

0.52

0.82

0.76

1.00

1.30

0.07

-0.01

-0.47

0.29

0.73

0.32

-0.22

0.07

-0.03

-0.02

0.60

-0.90

0.34

-0.45

-0.66

0.00

0.13

0.23

Czech Rep.

-0.57

-1.00

-0.30

0.12

-0.25

-0.83

-0.44

-0.44

0.03

-0.24

-0.50

-1.53

-0.56

-0.57

0.53

0.03

0.05

0.25

-0.38

0.78

-0.13

-0.06

0.06

0.10

-0.43

0.40

Egypt

-0.99

1.41

0.55

-0.81

1.22

1.49

-0.58

2.48

-0.20

-0.43

-1.13

-2.73

0.63

0.47

-2.10

-1.06

-1.31

-0.91

-1.55

-1.06

-0.73

-2.27

-1.91

0.63

-2.74

-1.56

France

-0.62

-0.52

-0.68

-0.74

-0.42

-0.25

-1.14

-0.18

-0.09

0.14

-1.30

-0.60

0.57

0.24

0.61

1.13

1.06

1.08

-1.19

0.69

0.12

0.13

0.55

0.86

-0.22

0.89

0.75

-1.11

-0.90

-0.28

-0.84

-0.55

-0.81

-0.88

-0.06

0.16

-0.33

0.21

-1.21

-0.96

0.77

1.32

1.36

1.16

-0.14

0.18

-1.13

-0.37

-0.42

-0.15

0.61

1.86

Greece

-1.06

-1.30

-0.70

-0.35

-0.39

-0.07

-0.46

0.53

-0.05

0.01

0.14

-2.49

-0.06

2.32

-0.81

-0.17

-0.40

0.00

0.42

-0.77

-1.08

-0.53

0.01

3.00

-2.36

-1.40

India

-0.66

1.52

0.61

-0.25

1.17

1.62

0.48

1.14

-0.24

-0.42

-1.22

0.02

-1.02

0.41

-1.87

-0.54

0.39

-0.75

-1.86

-1.81

-1.77

0.25

-0.04

1.10

-0.61

-0.65

Indonesia

-0.84

0.98

0.44

-0.18

1.11

1.99

0.86

1.32

-0.37

-0.44

-0.06

-0.37

-0.82

-0.53

-1.91

-1.80

-1.63

-2.33

-0.88

-0.79

-0.85

0.10

-0.78

-0.01

-0.16

-0.62

Italy

-0.49

-1.30

-0.93

-0.54

-0.53

0.00

-1.02

-0.46

0.05

0.03

0.53

-2.30

-0.95

0.47

-0.02

0.08

-0.22

0.00

0.23

0.56

0.42

-0.96

-0.04

1.20

-2.59

0.04

Japan

2.45

-1.39

-0.99

-1.20

-0.58

-0.44

-0.98

-0.71

-0.24

-0.35

-1.27

-0.33

-0.09

-0.75

0.57

0.07

0.30

0.75

-0.63

1.22

-0.09

-0.15

-0.18

-0.39

0.84

0.99

Kuwait

-0.69

0.39

1.72

1.19

2.23

0.87

-0.04

-0.87

2.02

2.61

0.83

-0.48

-3.00

-1.05

-0.96

-0.59

-0.62

-0.66

-0.05

1.77

2.64

0.64

-1.10

-0.63

-1.70

-1.53

Canada

Germany

Malaysia

0.75

1.67

0.85

0.33

1.17

0.89

1.28

0.03

0.05

-0.02

0.75

0.25

0.77

1.30

-0.06

-0.66

-0.65

-0.75

0.75

-0.21

0.46

-0.22

-0.81

-0.48

0.79

0.85

Mexico

-0.29

1.49

0.49

-0.34

1.21

1.69

-0.51

1.34

-0.48

-0.40

0.08

-0.72

0.24

1.13

-1.36

-0.54

-0.64

-0.41

-0.51

-1.59

-1.01

-0.63

-0.84

-0.20

-0.96

-0.28

Morocco

-0.73

1.44

0.62

-0.01

1.07

0.13

0.41

2.98

-0.18

-0.44

0.06

-0.75

1.25

1.74

-2.14

-1.64

-1.56

-1.67

-0.72

-1.18

-0.70

-2.06

-1.65

0.52

-1.20

-0.64

Netherlands

0.55

-0.58

-0.75

-0.34

-0.61

-0.43

-0.79

-0.89

-0.03

0.15

1.27

0.60

-0.52

1.32

1.16

1.27

1.34

1.08

0.72

0.52

0.15

0.74

0.37

0.26

0.76

1.91

Norway

0.26

-0.24

-0.46

-0.38

-0.16

-0.15

-1.00

-0.35

0.38

0.25

0.80

0.64

-0.70

0.04

0.92

1.57

1.36

0.66

0.26

-0.08

-1.38

0.26

0.79

-0.43

0.73

0.95

Oman

0.38

2.67

2.85

1.50

2.68

0.63

0.44

0.25

0.47

1.11

-1.36

0.48

0.93

-0.19

-0.26

-0.66

-1.71

-1.08

-1.15

-1.48

0.04

1.56

-1.48

0.04

-0.01

-1.26

-0.26

1.57

0.60

-0.42

1.26

1.53

-0.36

1.12

-0.44

-0.43

-0.30

-0.41

-0.26

-0.72

-1.16

-1.00

-1.15

-0.83

-0.91

0.20

1.32

-1.38

-1.75

-0.16

-1.47

-1.20

0.42

1.91

0.57

-1.00

1.42

1.68

-0.39

1.13

-0.26

-0.43

-1.25

-1.14

0.18

-0.38

-1.48

-0.79

-0.16

-0.58

-1.83

-1.33

-1.02

-0.26

0.43

0.14

0.04

-0.68

-0.27

-0.55

-0.03

0.61

-0.43

-1.82

-0.27

0.02

-0.11

-0.36

-0.69

-2.07

-1.96

-0.81

0.14

-0.07

0.03

-0.41

-0.79

-0.01

0.77

-0.05

-0.58

0.26

-0.76

0.10

Qatar

1.33

-0.12

2.85

3.00

2.56

0.66

1.73

0.69

3.00

3.00

1.88

0.48

-0.16

-1.03

0.06

0.32

0.19

0.22

1.34

1.87

2.17

-0.18

0.23

0.62

0.67

0.27

Russia

-2.49

-0.72

-0.05

0.75

-0.47

-0.98

0.04

-1.23

0.10

-0.05

-1.38

-2.18

-1.93

-1.17

-0.61

-0.45

-0.34

-0.41

-1.80

1.49

1.16

-0.09

-3.00

-0.93

-1.62

-1.16

Saudi Arabia

0.09

0.64

0.97

0.27

1.67

2.17

1.56

1.40

0.27

1.15

0.77

0.48

-0.62

-0.98

-0.26

-0.66

-1.71

-1.08

0.85

-1.78

-0.12

1.06

0.51

0.00

-0.04

-0.04

Singapore

0.84

0.17

0.03

1.34

-0.19

-1.19

2.04

-1.21

0.96

1.73

0.97

0.87

1.09

0.18

1.32

-1.53

1.52

1.49

1.40

0.37

0.45

-2.58

-2.82

-0.09

0.90

0.88

-0.69

1.46

0.75

-0.44

1.27

1.34

-1.19

2.29

0.03

-0.21

-1.88

-0.56

0.53

0.32

-0.77

-0.91

-0.58

-0.08

-2.79

0.00

0.08

0.60

0.07

-0.68

0.22

-0.51 0.09

Peru Phillippines Poland

South Africa South Korea

1.04

-0.06

-0.12

1.19

-0.15

-1.39

-0.41

-1.01

-0.23

-0.32

-1.19

0.37

-0.45

-0.67

0.30

0.45

0.36

0.75

-0.26

1.28

0.30

-0.17

0.34

3.00

-0.25

-0.75

-1.45

-0.58

-0.12

-0.17

0.10

-0.86

-0.31

0.03

0.26

0.58

-1.45

1.05

0.59

0.02

0.23

0.14

0.08

0.57

-0.73

-1.24

-0.05

-0.22

-0.49

-2.06

0.16

Sweden

1.44

-0.42

-0.60

-0.81

-0.25

-0.16

-0.95

-0.05

0.19

0.36

0.91

0.56

-0.36

-0.04

1.24

1.69

1.58

1.08

0.51

0.96

1.00

0.15

0.27

3.00

0.82

1.40

Switzerland

1.61

-0.71

-0.51

0.04

-0.32

-0.24

2.01

-0.31

0.40

1.02

1.33

0.91

0.61

-0.42

1.36

1.42

1.46

1.49

1.43

0.72

0.52

1.30

0.75

0.33

0.96

2.34

Taiwan

1.26

-0.06

-0.12

1.19

-0.15

-1.39

0.13

-0.75

-0.03

-0.26

-1.41

0.37

0.06

-0.61

0.30

0.73

0.53

1.41

-0.29

0.26

0.62

0.91

0.31

-0.47

0.07

0.64

Thailand

0.62

-0.09

-0.03

1.03

0.05

-0.06

1.12

0.80

-0.08

-0.16

0.11

-0.17

0.68

0.88

-1.44

-0.88

-0.65

-1.00

0.05

0.72

2.36

-0.66

0.55

-0.34

-0.46

-0.82

Turkey

0.62

0.98

0.50

0.01

0.96

1.23

1.05

-0.02

0.04

-0.32

-0.55

-1.26

0.33

-0.74

-1.24

-0.78

-0.83

-0.50

-0.11

-1.51

0.15

1.25

0.22

-0.76

-0.90

-1.05

UAE

0.64

-0.02

3.00

3.00

3.00

0.82

1.80

0.26

3.00

3.00

1.96

0.72

1.20

0.66

0.65

0.84

0.65

0.72

1.31

-0.39

0.16

-0.68

-2.46

-0.33

0.49

0.55

UK

0.44

-0.53

-0.54

-0.51

-0.23

0.07

1.31

-0.67

0.12

0.18

0.61

0.79

0.18

0.65

1.12

1.26

0.91

1.41

1.09

0.00

-0.40

0.51

0.39

0.16

0.58

1.54

US

0.66

-0.03

-0.34

-0.19

-0.35

-0.56

1.89

-0.48

0.09

0.28

0.22

0.75

-0.43

-0.12

1.04

2.85

1.71

2.24

1.06

0.36

0.05

0.67

0.42

0.10

0.55

1.16

Spain

Source: Oxford Economics, WTTC Talent enabling environment: z score > 0 = above average performance; z score < 0 = below average performance

61


62


Annex D

Talent enabling environment sensitivity analysis

Sensitivity analysis 1: Non-equal pillar weights

Sensitivity assumption adjustments •

•

•

Non-equal pillar weights: Larger weights are applied to the following pillars on the basis of their implied relative importance from the literature review: demographics, industry relative attractiveness, openness and recruitment competition.

•

Big movers up the ranks: Kuwait, Argentina, Peru, Indonesia, Egypt and Saudi Arabia.

•

Big movers down the ranks: France, Australia, Spain, Taiwan, Norway, Japan and South Korea.

Gulf Cooperation Council smaller weight for openness and labour market flexibility: Although foreign labour is more important today in GCC countries, many of these countries have aspirations to reduce the foreign share of the workforce. Thus it is useful to analyse their talent enabling environment today with a zero weight for the openness and labour market flexibility pillars. In truth the effect of foreign labour permeates across other pillars – customer service, demographics, industry relative attractiveness and quality of general human resources – so it is difficult with the available data to make a true assessment of the talent enabling environment in GCC countries related solely to the national workforce.

Sensitivity analysis talent enabling environment pillar weights Travel & Tourism: Talent enabling environmental pillar weights Sensivity analysis 1: Non-equal weights

Sensivity analysis 2: GCG larger weight openness and labour market flexibility

Sensivity analysis 3: GCC smaller weight openness and labour market flexibility

Customer service

10.0%

6.7%

3.8%

12.5%

Demographics

10.0%

15.0%

3.8%

12.5%


10.0%

6.7%

20.0%

0.0%

Industry relative attactiveness

10.0%

15.0%

3.8%

12.5%

Openness

10.0%

15.0%

50.0%

0.0%


10.0%

6.7%

3.8%

12.5%

Quality of human resources

10.0%

6.7%

3.8%

12.5%


10.0%

15.0%

3.8%

12.5%


10.0%

6.7%

3.8%

12.5%

Training

10.0%

6.7%

3.8%

12.5%

100.0%

100.0%

100.0%

100.0%

Sum

Travel & Tourism: Talent enabling environmental overall ranks Core: Equal weights

Gulf Cooperation Council (GCC) larger weight for openness and labour market flexibility: A larger weight (50%) is applied to the openness pillar for the following countries only: Qatar, UAE, Bahrain, Kuwait, Oman and Saudi Arabia. This reflects the much greater importance and role of foreign labour in these countries, especially for the travel & Tourism industry, and consequently the reduced importance of domestic talent measures. A larger weight of 20% is also applied to the labour market flexibility pillar as this is closely linked to the openness pillar.

Core: Equal weights

63


Source: Oxford Economics, WTTC 1 = best rank; 46 = worst rank

Sensivity analysis 1: Non-equal weights

Rank change

1

Qatar

1

Qatar

0

2

UAE

2

UAE

0

3

Switzerland

3

Switzerland

0

4

Singapore

4

Malaysia

1

5

Malaysia

5

Thailand

5

6

US

6

Singapore

-2

7

Austria

7

Costa Rica

4

8

Sweden

8

Sweden

0

9

UK

9

Saudi Arabia

7

10

Thailand

10

Austria

11

Costa Rica

11

Morocco

12

Canada

12

US

13

Bermuda

13

Bahrain

14

Barbados

14

South Africa

15

Netherlands

15

Kuwait

19

16

Saudi Arabia

16

Oman

4

17

Bahrain

17

Peru

18

Morocco

18

UK

-9

19

South Africa

19

Netherlands

-4

20

Oman

20

Canada

-8

21

Taiwan

21

Barbados

-7

22

Australia

22

Bermuda

-9

23

Norway

23

China

1

24

China

24

Chile

4

25

Japan

25

Mexico

26

Peru

26

Argentina

17

27

Turkey

27

Indonesia

9

28

Chile

28

Brazil

7

29

Mexico

29

Turkey

-2

30

South Korea

30

Taiwan

-9

31

France

31

Philippines

32

Philippines

32

Norway

33

Spain

33

Australia

34

Kuwait

34

Egypt

35

Brazil

35

India

36

Indonesia

36

South Korea

-6

37

India

37

France

-6

38

Germany

38

Colombia

4

39

Czech Republic

39

Argentina

-14

40

Greece

40

Japan

1

41

Poland

41

Spain

-8

42

Colombia

42

Czech Republic

-3

43

Argentina

43

Greece

-3

44

Italy

44

Italy

45

Egypt

45

Germany

46

Russia

46

Russia

-3 7 -6 4 5

9

4

1 -9 -11 11 2

0 -7 0

64



Sensitivity analysis 2 and 3: Gulf Cooperation Council alternate weights for openness and labour market flexibility pillars Sensitivity analysis 2: Larger weight for openness (50%) and labour market flexibility (20%) pillars •

Big movers up the ranks: Kuwait, Saudi Arabia and Bahrain.


65

Sensitivity analysis 3: Smaller weight for openness (0%) and labour market flexibility (0%) pillars Travel & Tourism: Talent enabling environmental overall ranks

Travel & Tourism: Talent enabling environmental overall ranks

Core: Equal weights

Core: Equal weights

Sensivity analysis 2: weight openness and labour market flexibility

Rank change

Sensivity analysis 3: GCC smaller weight openness and labour market flexibility

•

Rank change

1

1

Qatar

1

Qatar

0

-1

2

UAE

2

Austria

5

Switzerland

0

3

Switzerland

3

Switzerland

0

Saudi Arabia

12

4

Singapore

4

Sweden

5

Singapore

-1

5

Malaysia

5

UAE

US

6

Bahrain

11

6

US

6

Malaysia

Austria

7

Malaysia

-2

7

Austria

7

South Africa

8

Sweden

8

Sweden

0

8

Sweden

8

Costa Rica

3

9

UK

9

US

-3

9

UK

9

Singapore

-5

10

Thailand

10

Austria

-3

10

Thailand

10

Thailand

11

Costa Rica

11

Costa Rica

0

11

Costa Rica

11

Netherlands

12

Canada

12

UK

-3

12

Canada

12

US

13

Bermuda

13

Canada

-1

13

Bermuda

13

Bermuda

-1

14

Barbados

14

Kuwait

20

14

Barbados

14

Barbados

20

15

Netherlands

15

Thailand

-5

15

Netherlands

15

UK

-5

16

Saudi Arabia

16

Netherlands

-1

16

Saudi Arabia

16

Canada

-1

17

Bahrain

17

Barbados

-3

17

Bahrain

17

Japan

-3

18

Morocco

Bermuda

-5

18

Morocco

18

Australia

19

South Africa

19

Taiwan

2

19

South Africa

19

Taiwan

20

Oman

20

South Africa

-1

20

Oman

20

Morocco

-2

21

Taiwan

21

Morocco

-3

21

Taiwan

21

Oman

-1

22

Australia

22

Turkey

5

22

Australia

22

France

9

23

Norway

-1

23

Norway

23

Peru

1

Qatar

1

UAE

2

UAE

2

Qatar

3

Switzerland

3

4

Singapore

4

5

Malaysia

6 7

18

23

Australia

4 -3 -1 12

0 4 -3

4 2

3

2

24

China

24

Norway

-1

-5

25

Japan

25

Bahrain

-8

-3

26

Peru

26

Phillippines

6

1

27

Turkey

27

Saudi Arabia

-11

28

Chile

28

South Korea

2

29

Mexico

29

Mexico

0

30

South Korea

30

Brazil

5

-2

31

France

31

Spain

2

China

-8

32

Philippines

32

Turkey

-5

33

South Korea

-3

33

Spain

33

Germany

34

Spain

-1

34

Kuwait

34

Chile

Brazil

35

Poland

6

35

Brazil

35

Czech Republic

4

Indonesia

36

Czech Republic

3

36

Indonesia

36

Greece

4

37

India

37

Brazil

-2

37

India

37

India

0

38

Germany

38

Argentina

5

38

Germany

38

Poland

3

39

Czech Republic

39

Japan

-14

39

Czech Republic

39

Egypt

6

40

Greece

40

Colombia

2

40

Greece

40

China

-16

41

Poland

41

Indonesia

-5

41

Poland

41

Italy

2

42

Colombia

42

Indonesia

-6 -9

24

China

24

Peru

25

Japan

25

Oman

26

Peru

26

Norway

27

Turkey

27

Chile

28

Chile

28

France

29

Mexico

29

Phillippines

30

South Korea

30

India

31

France

31

Mexico

32

Philippines

32

33

Spain

34

Kuwait

35 36

3 3 7

Big movers down the ranks: Saudi Arabia, Kuwait, Oman, Qatar and UAE.

5 -6

3

42

Colombia

42

Italy

43

Argentina

43

Germany

-5

43

Argentina

43

Kuwait

44

Italy

44

Greece

-4

44

Italy

44

Argentina

-1

45

Egypt

45

Egypt

0

45

Egypt

45

Colombia

-3

46

Russia

46

Russia

0

46

Russia

46

Russia

0


66


67


The Harlequin Building 65 Southwark Street London SE1 0HR - United Kingdom Tel +44 (0) 207 481 8007 Fax +44 (0) 207 488 1008 Email [email protected] www.wttc.org

68


Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector

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