Health and Safety at Work Increases Revenue in Hospitality Industry

Once upon a time there was a company that wanted to increase its revenue … All the most beautiful stories start like this and this is no different case. One of the most valuable assets in hospitality and specifically in the accommodation sector in Portugal is people. This is a sector made of people and for people who are living “The Dream of Being Happy” in our country. Well, as in all tales, people who dream don't like to see their dream or dream trip ruined before their desired happy ending.  

This means that one way or another the tourism and hotel industry employees who are responsible for setting expectations for their customers must satisfy them by creating perfect and catastrophic disaster-proof experiences, that are not always manageable. For this herculean and Olympus god’s ode-worthy task, all entrepreneurs must support their employees in the most diverse dimensions.

This seems like an impossible mission for our friend “Tom Cruise”, but he is not available to the cast of hotel companies in Portugal. For this, we have the excellence of national workers, coveted in the four corners of the world and with performances comparable to top athletes, with CR7 mark of Cristiano Ronaldo as national flag.

“Portuguese hoteliers have one of the most coveted assets in the world, which are their employees.”

Are we in times of change in Tourism and Hospitality?

National hoteliers should begin to think that their core business of “Welcoming People” is only with satisfied and high motivated employees. Their employees must obtain the necessary recognition, be professionally fulfilled, in good working conditions and in balance with their personal life. This is most noticeable in younger generations, who are much more available to move between different countries, disregarding purely financial conditions to the detriment of more appealing proposals for their personal lives. This is the Millennial generation, loved by some and hated by others.

It is my belief that we are on the verge of profound change and a new paradigm in the tourism labour market in Portugal.

António Brandão de Vasconcelos, chairman of Everis consultant in Portugal, told Visão magazine in 2018 "If a company needs human resources and does not treat them well, then it is ruining its own business”. This is a company that operates in the field of technology consulting, noting a marked growth in recent years, similar to what is happening now in the tourism and hospitality industry.

Nowadays companies linked to software have difficulties in fixing their staff, having to create better working conditions, financial and non-financial incentive mechanisms, almost blameless to their employees. The same will have to happen in the tourism and hotel industry if we really want to have people to provide services in a unique way to those who come to visit us.

“There is an urgent need to retain qualified people within the country and within a sector whose main asset is its employees.”

Lately we have heard repeatedly in the media, from various entities, that there is a high lack of labour for this sector. However, it will be necessary to understand the reason for this and why businessmen in the industry complain so much. It is a reality that there are highly qualified people to work within and outside the country, but nowadays it is a highly globalized industry and national companies are also competing with players from other countries. On the other hand, in recent years mistakes have also been made by various organizations and we all have increased responsibilities in what is currently happening to the human resources sector, requiring a deep thought and medium and long-term strategic policies.

What are the facts that help people to avoid working in the hotel industry?

1 Underused highly qualified training;
2. Lack of training impact assessment, especially training funded by Community frameworks;
3. Lack of assessment of careers and continuity of activity of graduates in Portugal;
4. Excessively low wages (sector average below national average);
5. Failure to pay overtime working (bank holidays, overtime, time off, etc.);
6. Failure to pay perks already covered by national legislation (Ex: languages subsidy, additional night work, among others);
7. Lack of career perspective, medium and long term evolution;
8. Instability in personal life;
9. Staff has difficulties to reconcile family and private life with professional life;
10 There is a manifest devaluation of work within the sector;
11. Highly penalizing operational shifts for employee health and social welfare (non-regular rotating shifts);
12. Increased psychosocial risks ^[1] (Ex: Physical harassment, moral, third-party violence, excessive workloads, mismanagement of organizational changes, job insecurity, among others);
13. Turnover of human resources within the sector;
14. Work insecurity and instability;
15. Poor workplace conditions and lack of compulsory (annual) training;
16. Excessive free labour for employers (eg. curricular internships, professional internships, etc.) and increase of informal employees;
17. Entrepreneurs prefer to hire people without specific training and train internally, rather than hiring people with specific training (due to the amounts paid);
18. Seasonality and lack of continuity of operations;
19. Payments made through false “green receipts”;
20. Countries within the European Union with salaries much higher than in Portugal (eg. a waitress in Spain earns easily three times more than in Portugal.);
21. Lack of periodic inspections in the sector (of the various competent entities eg. ACT ^[2]);

What has happened to young graduates from vocation schools in recent years?

Currently there is no assessment of the impact of training on labour activity in companies, or the continuity of activity of trained (highly qualified) staff. It is a reality that most young graduates change areas due to lack of working conditions and sustainability within the sector. This is noticeable, for example, in waiters, housekeeping and spa staff, among others. If we look closely at some of the facts highlighted, we find that many of them have an almost immediate resolution as soon as the various organizations and players in the sector want it.
These highly qualified staff having a high ease of relocation to other countries choose to work outside Portugal where they easily get better working conditions.

But how can hoteliers balance this difficult equation?

It is here that a correct implementation of measures related to safety and health at work (OSH ^[3]), social responsibility and conciliation between professional, family and personal life, can help significantly to the retention of national talent. These types of certifications, which are still rare in the national hotel scene, will have to become more and more common under penalty of, one day in the future, entrepreneurs need people to work with and will not have qualified staff available (as is already the case in some operational areas).

OSH ^[3:1] in the tourism and hotel industry in Portugal

In the hotel industry, it is very common to use external companies to comply with OSH legal requirements ^[3:2], but this is not enough, as these organizations need somebody responsible to liaise with HR departments in order to apply a new human resources strategic policy, that goes far beyond the legal obligations, which are currently manifestly insufficient for this sector to perform well.

Is required a redefinition of the role of corporate HR departments and their hiring policies, which are stripped of any strategic organizational value.

These departments are merely based on short-term policies and day-to-day operational tasks. Entrepreneurs need to decide whether they want these departments to do such things as contracting, salary processing, recruitment processes that are devoid of purpose for the organization, or otherwise, they need these departments to strategically deliver additional value to their companies with medium and long term policies.

“We are not short of highly qualified people, we are short of strategic policies within organizations that enhance the performance of this valuable resource, which are people.”

Although Hospitality is currently one of the most regulated sectors, it does not mean that it is not subject to specific risks, whether physical, biological or psychosocial ^[1:1] that need to be diagnosed, minimized and controlled. We know that there has been a great deal of progress in recent years on this matter, but despite this, is manifestly insufficient.

It should be borne in mind that the tourism industry and the hotel sector in particular, aggregate a set of labour intensive activities, having a very significant weight in their cost structure. Employees in an organization are a very costly resource not to be harnessed and leveraged for higher returns.

We currently have a set of Portuguese Standards and directives in this area, however, I would like to highlight those mentioned above, which have a set of undeniable advantages for the creation of additional revenue in the national hotel properties and in which we are in deficit.

Existing Certifications and Standards:

• ISO 45001:2018 ^[4] - Occupational Health and Safety Management Systems;
• ISO 26000:2010 ^[4:1] - Social Responsibility (guidelines);
• SA8000:2014 ^[5] - Social Responsibility Management;
• NP 4552:2016 ^[6] - Reconciliation between work, family and personal life;

Currently there are very few or almost zero entities in the hotel sector that have certifications in these areas.

New generation hotel properties must have all of these issues and other concerns as a priority within their organizations. Practices such as indoor air control, thermally controllable environmental conditions, chemical handling rules, fire hazards, emergency plans, fall prevention, electrocution hazard control, ergonomic hazards, biohazard control, personal protective equipment distribution, periodic drills and safe work environments ^[7].

The major advantages of these guidelines, for the most part, are the implementation of procedures and processes focused on people. These policies help implement a true socially responsible culture that is conducive to the excellent performance of the organization and its employees.

These practices are essential not only for the well-being of the employee, but also for the proper functioning of the entire hotel property and the safety of its own guests.

One of the national pioneers in this type of certification was Delta Cafés ^[8] which in 2003 became the first company certified under the Social Responsibility standard through SA8000 ^[5:1].

At first glance it seems careless, but if we look at the cases we have already observed in the media, we find that much remains to be done in the national properties. There have been several cases in recent years, for example Legionella in several hotels, fires in which guests needed evacuation, robberies at hotels, theft of guest information databases, thermal shocks due to misuse of equipment. (e.g. Spa's), among others.

As can be seen, if there was proper planning of occupational health and safety conditions and good staff training, many of these recurring problems were properly addressed, also preventing the safety and welfare of guests.

Occupational safety and health in a synthetic and simplistic way associates the social, mental and physical well-being of employees, creating safe working environments ^[7:1] and favourable to their good performance in the developed activities.

As main guiding goals (ILO ^[9], 2009) we will have:

1. Promotion and maintenance of high levels of physical, mental and social well-being of employees from all sectors of activity;
2. Prevention of adverse health effects of employees resulting from their working conditions;
3. Protection of employees against risks arising from their working conditions;
4. Placement and maintenance of employees in work environments ^[7:2] adjusted to their physical and mental needs;
5. Adaptation of work to the worker (not the other way around);

It is necessary to have a concrete sense of the existing reality in these sectors and always bear in mind that there are rights and duties on both sides of the barricade. The associated costs and benefits are reflected on both sides, whether for employees or entrepreneurs. The aim of these measures is the improvement of conditions for both sides, minimizing their harmful effects, resulting from the activity for the properties good performance and for the maintenance of the existing jobs.

The promotion and improvement of working conditions must be strongly identified in all places and working areas, as there are risk factors associated with all of them, bringing consequences not only for their employees, but also for clients, as is well known in the Hotels and Food and Beverages sector.

These costs are associated with both sides and can be avoided with proper management of occupational safety and health, as can be seen below (ILO ^[9:1], 2009).

Costs associated with employees:

1. Accidents or occupational diseases;
2. Suffering and distress caused by accident or illness;
3. Loss of income;
4. Possible loss of job;
5. Costs associated with healthcare arising from the conditions of their work activity;

Costs associated with employers:

1. Costs of remuneration for work not performed (inefficiencies);
2. Costs of absenteeism and replacement of employees;
3. Medical expenses and compensation costs;
4. Repair and replacement of damaged equipment (misuse);
5. Production stops and breaks;
6. Reduction in the quality of products and services provided;
7. Increase in initial (new staff) and additional training (on-the-job training) expenses;
8. Increase in insurance premiums;

From these cost lists we can easily conclude that these two stakeholder groups both have much to lose. However, it is clear that entrepreneurs should do their homework because the impact these visible costs can have on their final income is too high not to be taken seriously. All these factors should already be part of the properties active revenue management policies to the detriment of castrating human resources management (HR) policies, which lead to multiple direct and indirect losses.

These policies to be as effective as possible should be based on dialogue with employees, their consultation and their involvement in improving their working conditions. Only in this way, we can implement measures that are also valued and perceived by them, as an asset with real impact on their daily life and balance with their personal life.

As can be seen immediately, there is a great responsibility for all stakeholders and leaders such as administrators, managers, officers, associative leaders, supervisors or owners. All of them have an increased responsibility for managing occupational safety and health, employee well-being and their retention in companies.

These stakeholders are responsible for:

1. Promote occupational safety and health as a pillar in the organization;
2. Communicate OSH policies to all employees facilitating their involvement;
3. Establish strategy, policies and objectives for consistent OSH management;
4. To monitor and measure the evolution of these practices over time;
5. Provide the example of good practice through their own conduct;
6. Establish a culture favourable to OSH policies;
7. Maintain OSH as a priority of their daily activity;
8. Give all employees the opportunity to adopt preventive measures;
9. Provide employees with training in OSH and the necessary personal protective equipment for the proper performance of their tasks.
10. Involvement of all staff in OSH decisions (EU-OSHA ^[10], 2012)

The well-being and health of employees is essential to one of the main focuses of corporate competitiveness in these sectors. We now know that healthy and motivated employees produce more and better, reflecting on the quality of customer service that has a direct impact on their properties image in a highly competitive global market. Proper OSH management saves lives and is a good investment for companies, allowing employer’s inefficiencies with absenteeism, replacement of employees, production shortages, and poor quality of service or lack of motivation to work.

Can we create more revenue from OSH policies?

Applying efficient OSH policies has many advantages for those organizations who implement it, including:

1. Reduction of accident and sickness rates;
2. Cost and risk reduction, with lower absenteeism rates, lower employee turnover, fewer accidents and lower threat of lawsuits;
3. With the participation of employees in the planning phase, there is greater involvement, most effective measures and solving concrete problems.
4. Greater responsiveness in the prevention of occupational accidents and health degradation with a better cost-effectiveness ratio;
5. Strengthening of image with suppliers and partners;
6. Strengthening reputation on topics such as corporate social responsibility with investors, customers and communities;
7. Increased employee productivity with healthier, more satisfied and motivated employees.
8. Reduction of absenteeism rates;
9. Savings of considerable amounts through better plant maintenance;
10. Decrease in claims and insurance premiums;
11. Significant improvements in pre-contract qualification levels;
12. Satisfied employees, with higher levels of mood and motivation, favour increased concentration at work;
13. Decrease in the time of services execution (delivery);
14. Increased employee performance increases customer satisfaction;
15. Reinforcement of employees commitments to the company;
16. Allows the company to meet customer expectations for OSH;
17. Encourage employees to stay active longer;
18. Increase competitiveness (among competitors), profitability and effectiveness of the company;
19. Better social climate within the company;
20. Allows better process management;
21. Increases professional achievement and employee recognition;
22. Promotes healthier lifestyles;
23. Improved employee retention capacity with greater ability to retain top talent;

As you can see from applying a full OSH program, it can greatly foster the creation of safe environments ^[7:3] and promote employee satisfaction, helping them significantly increase their performance and can help the organization achieve all their previously outlined goals.

Final considerations:

It is well known that there is a problem that is difficult to solve within the sector, however all companies are questioning their sustainability in the context of a global market if they do not take appropriate precautions and preventive measures. There is an urgent need to adopt measures that favour the establishment of employees in companies and in our country.

It is essential that companies invest in good work management and in periodic vocational training tailored to their needs. It is a certainty that employees increasingly informed, motivated, with safety conditions and well-being at work improve significantly the quality of service, the productivity of businesses and, consequently, guest satisfaction.

Companies need to carry out a set of certifications to help them implement processes and best practices for business sustainability in the medium and long term. This is where good OSH practices can make an important contribution by helping to set up safe work environments ^[7:4] that deliver excellent employee performance within organizations and with the rigor required.

Through the improvement in all these points as shown in various studies (EU-OSHA ^[10:1], 2012), companies will see huge financial gains having a direct impact on revenue generated in organizations and consequently available for future investments. This set of gains is beneficial to both parties leading to a perfect match between employees and employers.

Only by creating these synergies can everyone have a happy ending and be happy forever.

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