Contents

Introduction.......................................................................................................................................2
Internal and External Data...........................................................................................................3
Internal Data....................................................................................................................................3
No. of people are leaving................................................................................................................4
Extra HR Required..........................................................................................................................5
HR required for 345 rooms..............................................................................................................6
External Data:...............................................................................................................................6
HR issues............................................................................................................................................7
The internal issues:..........................................................................................................................7
The external issues:.........................................................................................................................8
Scenario Planning..............................................................................................................................8
Scenario analysis on future staff number.........................................................................................9
No of people required based on different Scenario......................................................................10
Action Plan.......................................................................................................................................10
Recommendations...........................................................................................................................11
Conclusion.......................................................................................................................................13

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Introduction
The case is about Capital Hotel, which is located in a Central European country's capital city.
Government officials and bureaucrats have traditionally been its key clients. The average hotel
occupancy was usually 50%, but it has fallen in the previous two years, but it has been more than
replaced by business people from nearby countries during the week and international visitors on
weekends.

The hotel now has 240 twin rooms, but they want to create an extension next year that would
increase the number of rooms to 345 twin rooms, as well as a remodeled leisure club with a
brand-new swimming pool and spa (run independently as a franchise). European Leisure Resorts,
the hotel's parent business, wants to reposition and rebrand it as a high-end 'boutique' hotel. A
new general manager has been 'head-hunted' from one of Russia's most prestigious hotels, and
her aim is to improve the hotel's quality.

There are three departments in the hotel-

1. Front-of-house/administration, 2. Housekeeping/maintenance, 3. Catering.

The average room occupancy rate is now 75%, and the hotel is often filled, especially on
weekends. On weekends, the catering staff is in high demand since many visitors like to have
lunch at the hotel's restaurant.

A number of multinational hotel organizations have established hotels in the city in the last two
years to cater to the new markets. Capital hotels likewise feel that in order to compete, they must
increase the quality of service while keeping costs 10% lower than their competitors.

The following questions were addressed as HR advisors to Capital Hotel in order to help them
accomplish their high quality/lower cost plan within 12 months.

As HR Consultants of Capital Hotel, we will be focusing on 4 criteria to enable the hotel to

achieve its higher quality / lower cost strategy-

1. We will try to identify the further forms of internal and external HR data that will be
required to gather or generate to undertake this consultancy project.

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 2. We will identify the HR issues that currently the hotel is facing.
3. We will be developing a comprehensive HR Plan for the hotel.
4. Prioritizing the HR actions that are necessary to enable the hotel to realize its strategy.

Internal and External Data

Internal Data
Turnover
Occupational Staff Numbers
less than six months
Group (existing) Retirement (5%) left (10%) Total
(10%)
Management 9 1 3 1 5
Reception/Clerical          

Supervisors 6 0 3 1 3
Staff 18 3 3 2 7
Housekeeping          

Supervisors 4 0 3 0 3
Staff 25 2 3 3 7
Maintenance 4 0 3 0 3
Caterings          

Supervisors 8 2 3 1 5
Chefs 4 1 3 0 4
Kitchen staff 15 0 3 2 4
Bartenders/ waiters 12 0 3 1 4
Total 105 9 26 11 46
Job descriptions and position specifications are necessary for each department to decide what
sort of individuals will be suited for those roles.

Firms are often obligated to keep track of application and employee data such as race, age,
gender, handicap, and veteran status in order to analyze their diversity representation. This
information is provided voluntarily by applicants and employees.

The age of each employee is vital to know among the fundamental information since it offers an
indication of the average age range of the employees as well as the number of employees eligible
for retirement.

Along with the basic information, the hotel needs to know the compensation structure of each
department and the positions within it because it wants to implement a low-cost strategy, which
requires it to be aware of its expenses, and employee compensation packages are one of the
largest expenses that must be known in order to determine whether any changes are necessary.

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Employee compensation is important in terms of recruiting, dismissing, and giving appraisals
depending on the position, shift allowance, and resources available to employees.

Because experienced workers are a benefit to the business, each employee's experience is also
significant in determining who has greater information about the organization. Employees with
greater experience will have a better understanding of the hotel's brand, giving them an
advantage over competitors.

Finally, the hotel's labor turnover rate must be calculated so that the need for personnel can be
determined and suitable manpower planning can be implemented.

No. of people are leaving

We've used "people attrition rate" as an example of internal data. It enables us to understand the
various forms of turnover that the hotel may encounter. We also learn how many personnel will
be required in the event of a firm expansion.

HR requirements for 345 rooms compared to existing

27
25
22
18 17
15
13
No. of HR

12 12
9 9 8
6 6 6 6
4 4 4
t l s s ce rs s rs
en ica or aff ng or aff in
g
ef aff
r vis St pi vis St an er is o Ch St ai
te
em Cl
e r ee r te
n t rv n
ag n/ pe ek pe in Ca pe he /W
an o Su us Su a Su Ki
tc rs
M pti Ho M
nd
e
ce
R e
a rte
B
Work Area

Staff numbers for 240 Rooms Staff Number Required for 340 rooms

HR number

The above graph shows that each group needs additional members in order to meet the criteria of
the room expansion. If management recruits additional workers, the new strategy will work. We

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can see that the current number of persons will be adjusted for the planned expansion for 240
rooms.

Extra HR Required

Occupational Group Extra HR required

Management 9

Reception/Clerical  

Supervisors 6
Staff 15
Housekeeping  
Supervisors 5
Staff 9
Maintenance 5
Caterings  
Supervisors 9
Chefs 6
Kitchen staff 11
Bartenders/ waiters 9

We may get internal data on employees who are expected to quit the organization by removing
the amounts of future turnover. By reducing idle hours, we may increase the amount of
additional HR. Finally, an exact number of HR needs that the firm must take into account to
develop 345 rooms has been calculated, taking into account turnover and additional working
hours.

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 HR required for 345 rooms
Extra
Staff Number of Number of Person People
Working Idle Working number of HR
Occupational Group Numbers people people after needed needed for
Hours Hours hour(actual) people required
(existing) leaving attrition per hour 345 rooms
needed
Management 9 5 4 72 0 72 9 0 13 9
Receptioin/Clerical
Supervisors 6 3 3 48 0 48 6 0 9 6
Staff 18 7 11 144 0 144 18 0 26 15
Housekeeping
Supervisors 4 3 1 32 0 32 4 0 6 5
Staff 25 7 18 200 50 150 19 6 27 9
Maintenance 4 3 1 32 0 32 4 0 6 5
Caterings
Supervisors 8 5 3 64 0 64 8 0 12 9
Chefs 4 4 32 0 32 4 0 6 6
Kitchen staff 15 4 11 120 0 120 15 0 22 11
Bartenders/waiters 12 4 8 96 0 96 12 0 17 9

External Data:
Knowing the facilities and amenities provided by competitors is necessary for conducting
manpower planning. Setting compensation plans for each post will be impossible until the
market norm is recognized. Furthermore, the salary offered may be below market value, which
will make it difficult for the hotel to attract top talent and result in the loss of valuable human
resources.

Another crucial piece of data is the demand for staff in various hotel departments, as well as their
supply, because this information allows Capital Hotel to plan manpower more accurately for the
coming year.

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HR issues
Identify the current HR issues faced by the hotel,
A. Internal as labor demand

B. External as labor supply

(In terms of staff numbers, deployment and skills)

The internal issues:

1. The shift system of the employees is an issue which the employees are unhappy about because
different departments have different shift timings. While some have to do overtime while others
can have leisure time of until 2 hours like the housekeeping staffs.

2. Capital Hotel has a varied age range within its employees. While some are very young, there
are employees in their mid 20’s, late 30’s and 40’s and also some very near to their retirement
age. This diverse age range among the employees can create conflicts as the seniors might bully
the juniors or the juniors might misbehave with the seniors.

3. it’s very important to know which workers are regular and who remain absent for most of the
time so that proper appraisal can be done but keeping regular attendance manually is a tough job.
4. Catering department is one of the most important departments in the hotel and shortage of chef
means a huge work load on the other staffs and rising dissatisfaction among the employees of
catering department.

5. The competitors are paying 15% higher payments to their employees and this is creating havoc
internally because a lot of employees want to switch jobs for better compensation and
opportunities.

6. The staffs are not deployed properly, while some departments have lots of skilled employees,
while the other departments are less skilled.

7. As one third of the employees are going for retirement so more positions will be vacant and
there should be a change in manpower planning.

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The external issues:
The severe neck to neck competition among the newly opened hotels in the city is putting
pressure on the capital hotel and posing a threat to its existence and the fact that they are offering
much higher salaries is adding up to the difficulties as everyone wants to join there instead of
capital city. And the supply of workforce for the hotel business is also a matter of concern as it
will hugely affect the manpower planning.

Scenario Planning
According to the case study "Strategy and HR planning at the capital hotel," the company
initially had 240 twin rooms. As an extension, a total of 345 double rooms and a newly designed
leisure club with a completely new swimming pool and spa will be created. Also, the occupancy
rate was before 50%. For the same reason as the change, the new room occupancy is 75%.

We can make below assumptions to analyze the scenario,

There can be three scenarios by increasing the room numbers from 240 to 345,

Scenario 1: Optimistic Business (75%)

Scenario 2: Same level of business (50%)

Scenario 3: Pessimistic business (25%)

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For same level of business, the room increment rate is

(345-240)/240 = 43.75%

Scenario analysis on future staff number

Occupational Saff Same level Optimistic Pessimisti Retiremen Turnove
Group Number of business level of c level of t r
(Existing) (143.75%) business business
(125%) (75%)
Management 9 12.9375 16.171875 9.703125 2 2.25
Reception/Clerica - - - - - -
l
Supervisors 6 8.625 10.78125 6.46875 0 1.5
Staff 15 21.5625 26.953125 16.171875 3 4.5
Housekeeping - - - - - -
Supervisors 5 7.1875 8.984375 5.390625 0 1
Staff 9 12.9375 16.171875 9.703125 2 6.25
Maintenance 5 7.1875 8.984375 5.390625 1 1
Caterings - - - - - -
Supervisors 9 12.9375 16.171875 9.703125 2 2
Chefs 6 8.625 10.78125 6.46875 1 1
Kitchen staff 11 15.8125 19.765625 11.859375 0 3.75

Each occupational group can share the same level of business, optimistic and pessimistic
business scenarios. With 25% turnover rate, each group shows a different percentage of each
scenario. Retirement was manually obtained from the case data. The retirement age is 65 years
old.

However, the housekeeping group has a 69-year-old maintenance staff. This shouldn't have
happened. This is an unusual situation that needs to be resolved. The Recommendations section
highlighted this situation with a solution.

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No of people required based on different Scenario
Staff Number Same level of
Occupational Group Optimistic Pessimistic
(Existing) business
Management 9 8 12 2
Reception/Clerical - - - -
Supervisors 6 4 8 0
Staff 15 15 24 2
Housekeeping - - - -
Supervisors 5 3 5 0
Staff 9 19 34 1
Maintenance 5 4 5 1
Caterings - - - -
Supervisors 9 8 11 2
Chefs 6 4 5 1
Kitchen staff 11 10 20 0
Bartenders/waiters 9 8 16 0

The staff number can be increased, decreased or remain same based on different situation.
However, in this business same level business could be more preferable.

Action Plan
From what we learned from the case study, in order to upgrade the standard of services and
lower the cost strategy, the Hotel needs to make an action plan by formulating a timeline for
when specific tasks need to be completed and determining what resources are required.
Organization performs better only when employees share their ideas and concerns. So the first
obvious thing we need is more employee involvement in the matter. We include everyone in
decision making for which employee’s need active participation.

From what we can see in the case study “Strategy and HR Planning at the Capital Hotel”, we
know the work load of Housekeeping staff is comparatively less than the work load of Catering
staff. In that case, we can do a shift swap to keep work balance between all the staffs in order to
have an active work life. For that, these Housekeeping staffs can be trained up to cater kitchen
requirements during the rush times as Housekeeping. Staffs are usually idle for about 2 hours of
their shift. Therefore, they can utilize that time by helping out the Catering staff as well.

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Discipline is another vital thing here. We have to keep record of who has the most absences
without providing a valid reason. That helps us to determine whether they can finish their
assigned work on time or not.

HR department needs to evaluate the employee’s performance by providing employees with

feedback to improve and maintain job performance. It helps with identifying those areas in
which employees need to improve. In that case, trainings and internship needs to be provided to
the young and new staff members in order to make them more efficient in the workplace at a low
cost.HR department also needs to set a performance standard for the next period so that staffs
can cope up with the given level. We have further seen that the turnover rate is higher in the
catering department. The main reason behind it is the age factor. That means the organization
failed to forecast the impact in advance and its consequence. In this circumstance, employee’s
retirement could have been reconsidered if they don’t have any physical issue. These retired
chefs can be hired as trainers to train new upcoming staff. In that way, we don’t have to hire
trainers from outside and these resources can be used somewhere else.

The Organization needs to increase the wage of the staff member by small amount every year
based on their experience level and job performance in order to keep them motivated. As the
catering system is very vital for smooth run of their hotel then it means the chefs are the most
important employees of the hotel as they are the ones who will determine whether the customers
return based on what they ate. You could have all the great things set but if the food tastes
horrible no one is coming back. So the management should give exclusive benefits to the Chef to
retain him or else the competitors will take him/her away which will be a huge loss for the
business.

Recommendations
There has been a trend in the last two years that many new employees are leaving the hotel so
the management should work on it.

 First the management should figure out the reason of this unusual pattern of turnover and
then work on the solutions. Some reasons for the turnover might be internal politics as it
is often seen in organizations that old employees don’t like the infusion of new blood so

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 when someone new joins then they want them to abide their rules and if they revolt then
gang up against them.
 Another reason might be the compensation policy. Maybe the compensation is not what
they had expected while joining or maybe they are not happy with it or may be the
competitors are paying more. The new employees might not be happy with the work
structure or the responsibilities bestowed upon them so they wanted to switch. The
management should indulge the staff in more team building exercises so that the new
blood can mix with the old one and create some new bonding. They might review their
compensation structure and does a market survey to know the compensation policy of
their competitors.
 The retirement age of the hotel staff is 65 but there is an employee in the housekeeping
department with an age of 69 which is unusual as he had passed his retirement age four
years back and is still working in the hotel. As the management is so keen to keep him
then it might be possible that he knows some business secrets and is unwilling to share to
anyone for which the management can’t replace him. Maybe he is a favorite of the old
customers and they want him to stay. Whatever the reason maybe but the management
need to send him for retirement soon because this is against their company policy and in
future some other employee might give his reference and urge to stay beyond their
retirement service.
 The hotel follows a shift working patterns for the employees which can be really hectic at
times especially when the hotel is at high demand so the management should try to work
on their working hours to make it more flexible for the employees so that they can have
proper work life balance

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Conclusion
The capital hotel needs to work closely on their turnover rate and find solutions to reduce it
because each employee is like an asset and knows about their business so if they go to their
competitors then it might badly affect their business as they might also take away their
customers. Most of the current workers are middle aged so after their extension they should
recruit more young and energetic candidates as they will bring some new ideas, techniques, skills
which will help their aim of rejuvenating the hotel. Along with that they need to motivate their
current employees as well as retain them by providing the best compensation policies so that
they can compete with their new competitors.

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