Chloe Berman examines People 1st’s report into the changing face of employment in the travel sector.
A recent study of the labour market in the travel, hospitality and leisure industry has painted an interesting snapshot of the sector.
People 1st’s study of 1,300 travel industry employers suggests the recession has meant good news as well as bad for many.
While travel agents are in decline, and the number of people seeking jobs in the sector has increased by more than 50% in the past year, the recession has also brought a renewed focus on training and higher rates of staff retention.
The report’s most resounding message is that the industry must ensure it is in a strong position to cope when growth opportunities return.
The workforce
Map: How the travel workforce is distributed. Click to view at full size.
In 2005/6 there were 51,500 travel consultants, while in 2007/8 the number plummeted to 35,600. In the same period, the number of travel agency managers fell from 10,600 to 8,900.
This decline is likely to have been fuelled by the merger of the big four and a migration to the internet. The growth of short breaks is also a factor, as customers are more likely to make their own arrangements than use an agent. However, the latest figures suggest the industry has stabilised after a period of decline.
Travel continues to be dominated by women.
A total of 70% of travel consultants and agency managers are female. Surprisingly, female travel agents earn more than their male counterparts. Women earn an average of £8.45 an hour, while men are paid an average of £8.38.
However, the number of women in senior positions remains lower than other industries, at 46% across hospitality, leisure and travel. About 55% of women working in the sector are part-time employees, who can be more vulnerable in a recession.
The sector continues rely on a shrinking pool of younger workers.
Nearly half of the workforce is under 30 years old, compared with 18% of the total workforce across the country.
Internet start-ups are starting to wane.
In the last year, economic turmoil has made it far more difficult for people to secure the funding to open a new business. The number of start-ups decreased 4% from 2006 to 2007, and a larger drop is estimated for 2008.
The number of companies going out of business is expected to increase.
As well as consumer budgets being squeezed by the recession, much of the sector has been hit by rising fuel and labour costs, due to the increase of the minimum wage in October 2008.
Recruitment
The job market has seen a dramatic turnaround in the past 12 months. Employers who previously struggled to fill vacancies can now take their pick from high-quality candidates.
For every vacancy, there are 1.8 people looking for a job.
The number of unemployed people looking for work in the sector jumped from 47,875 in February 2008 to 75,345 in February 2009.
Since employers that are looking to recruit are now able to cherry-pick the top candidates, it is not surprising that 54% of bosses say qualifications are becoming more important in helping them choose between applicants.
Problems in other sectors have created recruitment opportunities for employers. People 1st chief executive Brian Wisdom said: “The economic downturn could provide opportunities for travel businesses to attract talented managers from other industries, particularly retail, which requires a similar skill set.”
However, for many businesses, recruiting is far from a priority. Some 26% of businesses froze recruitment at some point in the last year, and use of temporary employees has been slimmed down by 23% of employers.
Staff turnover increased from 20% to 31% in 2008.
This is a big drain on the bottom line: employers spent £414 million recruiting staff in 2008/9. Staff retention strategies will reduce the need for this and have a positive impact on businesses’ bottom lines.
“Over the last few years, businesses have been focusing on staff retention. Strategies include ensuring all staff receive an induction, training for staff and managers, organising team-building events and rewarding staff,” said the report.
The economic downturn is likely to improve the retention rate. In fact, 70% of respondents said the recession would make it easier for them to retain skilled staff.
There is still a ‘skills gap ‘.
Meanwhile, there are still some hard-to-fill vacancies. According to the survey, among those positions are managers and travel consultants. This is usually because a job is in a remote location, offers a less attractive package or requires a hard-to-find skill.
The industry’s skills gap has improved slightly, however, 9% of the workforce still do not possess the skills their employer requires. Customer handling skills are most often cited as needing improvement.
Training and qualifications
Training has become more important during the recession.
Some 37% of employers said they would seek support from the government’s Train to Gain scheme or try an apprenticeship programme.
Wisdom said: “This is a positive reaction to a challenging time for many businesses, as evidence suggests formal qualifications can aid retention and increase the skills of staff.
A total of 62% of companies will bring their training in house to save on costs during the economic downturn.
“For those taking training in house, it will be critical that they are supported, and that internal staff can deliver training to a high standard,” he added.
Only 29% of hospitality, leisure and travel businesses have a training budget.
There is a strong link between the size of a business and its training practices. As a company grows, so does the chance it will offer staff training.
Travel has been plagued in the past by a confusing number of training options. People 1st has been working to scale down and simplify the number of travel-related qualifications on offer, resulting in the removal of half the qualifications. Wisdom said this would make it easier for employers to understand the significance of qualifications.
Other new developments will be the launch of the Diploma in Travel and Tourism for 14 to 19-year-olds in 2010 and the development of the National Skills Council for the sector.
People 1st is also overseeing the development of two new customer service qualifications to tackle the significant number of people without adequate skills in this area. These will be available from June.
In 2008, £112 million of public funding was pledged to support training in the sector in England. This includes funding 4,000 places on the customer service qualification.
Apprenticeships
More than 500 UK businesses employ apprentices who are over 16 years old.
The number of school leavers taking up the scheme has fallen, but the completion rates are improving. “Having a rigorous recruitment and selection process has emerged in the research as a key factor in achieving high completion rates,” the report said.
Two apprenticeship frameworks became available in Scotland in April, and the skills council is working on a new Hospitality Supervision and Leadership Apprenticeship, which will be available from September.
TUI plans to expand its 800-strong apprenticeship programme this year. The latest research has shown that the cost of investing in an apprentice is £4,250 and this will be recouped within one year.
What does the future hold?
Of the 1,300 employers questioned, 36% said they viewed the recession as a threat, while 28% said it was an opportunity. The rest thought it was both a threat and an opportunity.
While trading will be tough in the short term, People 1st predicts that the sector will grow and remain an important part of the UK economy.
The report predicted total employment will rise by 10% by 2017, with rising demand for graduates. There will be 69,000 more managerial jobs across the sector by 2017.
We are heading towards a more qualified travel sector.
About 170,000 people are working towards hospitality, leisure, travel and tourism qualifications in the UK.
“Looking beyond the recession, the sector is projected to grow and it is important that we continue to move the National Skills Strategy forward to ensure that, in the long term, the demands that this growth will bring can be met,” he said.
Recession and consumer spending
The press is full of stories of consumers tightening their purse strings, but how has the recession really affected consumer spending?
- Students, young and retired people will be the least affected, since they are not tied down by mortgages or worried about the threat of unemployment.
- Consumers might become less frivolous, and those who continue to spend will do so more wisely. They will take fewer risks and will know exactly what they are getting for their money.
- Consumers are more likely to book with an ATOL/ABTA-protected travel agent than book independently on the internet, following the collapse of XL Leisure Group.
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