(Recruitment And

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Recruitment and training in small firms

Stephanie M. Jameson

Centre for the Study of Small Tourism and Hospitality Firms, School of Tourism

and Hospitality Management, Leeds Metropolitan University, Leeds, UK

Background

Small firms and training

Although definitions of small firms have

been extensively debated, there is no

disagreement that the most commonly found

tourism or hospitality enterprise is small

(Thomas, 1998). To date, very little research

has been conducted in these organisations.

This is no surprise and as Matlay argues:The issue of training in the small business

sector of the British economy has largely

been neglected by academic researchers and

human resource planning, development and

management specialists who, until recently,

were content to suggest solutions which weremore relevant to the businesses strategies of

larger firms (Matlay, 1996, p. 648).

This is supported by Johnson and Gubbins

(1992, pp. 28-9) who suggest that:relatively little is known about the extent,

nature and determinants of training in small

and medium-sized businesses, either on a

national or on a local basis.

It is argued that with the growth of tourism

and hospitality and the importance of human

resources within them this neglect should

not continue.

Research conducted in hospitality andtourism firms of all sizes has discovered that

informality and a relatively unsophisticated

management style characterise the approach

taken towards recruitment and training

(Goldsmith et al., 1997; Price, 1994; Lucas,

1995; Baum, 1995). Research on recruitment

and training in small firms in general

(Jameson, 1998) has also indicated that an

informal approach towards the management

of human resources is the norm in these

firms. One of the major themes in small

business literature has been the examination

of the informality of relations betweenemployers and employees. A correlation has

been found to exist between the size of firm

and level of formality in various sectors of

the economy (see, for example, Scott et al.(1989); Curran et al. (1993)). Research

conducted specifically in hospitality firms

(Price, 1994, p. 49) found that:one of the main findings from the survey was

the importance of the relationship between

establishment size and employment practices

F F F there was a strong correlation between size

and the extent to which establishments had

introduced personnel policies, procedures or

other arrangements which met the

requirements of employment law.

The significance of this relationship cannot

be underestimated and must be borne inmind when interpreting the results on

recruitment and training in the small firms

in the sample.

Any meaningful analysis of recruitment

and training cannot be undertaken without

some understanding of the labour market

within which small tourism and hospitality

firms operate. Much effort has been expended

developing theoretical models of the labour

market. As far as the tourism and hospitality

industries are concerned one of the most

useful theories is dual labour market theory.

Goldsmith et al. (1997) summarize this

succinctly. Dual labour market theoryproposes that the total labour market can be

segmented. One section is the primary labour

market, where jobs tend to be supplied by

large, highly profitable firms with a high

capital to labour ratio and high productivity.

Here, production is usually large scale with

high investment in technology. Employment

in these firms is normally stable with

relatively high skill and wage levels. In this

context, there are normally opportunities for

training. The secondary labour market is

normally characterised by small firms with

low capital to labour ratio, low productivityand small scale production. In these firms,

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[ 4 3 ]

Journal of European IndustrialTraining24/1 [2000] 4349

# MCB University Press[ISSN 0309-0590]

Keywords

Recruitment, Training, Small

firms, Hospitality, Tourism

Abstract

The hospitality and tourism

industries are two of the fastest

growing and most dynamic

sectors of the UK economy. Both

industries are highly labour

intensive and, because of this, the

effective management of human

resources is critical to their

success. A defining characteristic

of these industries is the high

incidence of small firms. The issue

of training in the small business

sector in general has been

neglected by academics and man-

agement specialists and this is

also the case specifically in

tourism and hospitality. This

article goes some way to address

this gap in knowledge and

examines the recruitment and

training practices of small tourism

and hospitality firms. The issues

examined include sources of

recruitment, the extent to which

small tourism and hospitality firms

had training plans and training

budgets, participation, and

evaluation of training.

Received February 1999Revised September 1999
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wage and skill levels tend to be low,

employment is unstable and training

opportunities are usually limited. Small

tourism and hospitality firms normally tendto operate within the secondary labour

market.

There are obvious relationships between

recruitment and training. One relationship is

where training can provide solutions to

problems in the labour market. Campbell and

Baldwin (1993) suggest that in many

industrialised countries there is a concern

that skills shortages and mismatches are

appearing in the labour market and that

policy makers are aware that recruitment

difficulties and skill shortages may reduce

the competitiveness of small and large firms.Bradley and Taylor (1996) suggest that there

is a growing awareness that education and

training systems can influence the skill and

occupational mix of a locality and local

economic wellbeing. Another type of

relationship is one where the level of

recruitment affects the level of training. In

tourism and hospitality, with their reliance

on the secondary labour market and high

rates of labour turnover, there is a strong

tendency to have high levels of recruitment

and low levels of training. The arguments

being that either it is not worth investing in

training or there simply is not time.

Recruitment

Research on tourism and hospitality firms in

general (i.e. not specifically small firms)

refers to informal and unsystematic

recruitment methods (Lucas and Boella, 1996).

Others, who have carried out research into

recruitment in small firms in general have

found a reliance on informal methods (see, for

example, Curran et al., 1993). Millward et al.

(1992) found that, whereas larger enterprises

relied greatly on formal methods and

bureaucratic procedures by specialistpersonnel departments, the small business

owner/manager is likely to handle recruiting

and personnel matters without delegating and

is unlikely to have any relevant skills.

Training

Tourism and hospitality have one of the

highest levels of skill shortages (HCTC, 1995;

HEFCE, 1998). If, as Bradley and Taylor (1996)

suggest, training can influence the skill of a

locality, then it is interesting to see how

seriously small tourism and hospitality firms

take training.

According to Curran et al. (1996) small

businesses experience problems in providing

training for both owner-managers and

workers. It has also been discovered that the

hospitality industry displays one of the

lowest levels of training activity in the UK

economy (HCTC, 1995). These points should

be borne in mind when the results of this

survey are interpreted.Two of the indicators of a systematic

approach to training are the existence of a

training plan/policy and a specific budget for

training.

According to the Hospitality Training

Foundation (HtF, 1996) 63 per cent of

employers in all industries had a training

plan. In catering and hospitality 64 per cent

had a training plan. The most recent

research on training and small firms found

that only 28 per cent of such firms had a

training plan.

It is appropriate to discuss trainingbudgets alongside training plans. It is also

useful to compare the survey findings with

all industries and with the hospitality

industry (no figures are available for

tourism). In all industries 55 per cent of

employers had training budgets; in

hospitality this figure was 43 per cent

according to IFF research (HtF, 1996).

However, research carried out by the HtF

found that only 19 per cent of hospitality

firms had a training budget.

In the UK, the provision of training to

SMEs has become a central issue of economic

policy (Miller and Davenport, 1987). Storey

(1994) has described this as a major indirect

small firms policy initiative. Over the last

decade, the provision of training and support

to SMEs has increased considerably

involving national and local Government, the

private sector, and further and higher

education institutes (Westhead, 1996. In the

survey on small tourism and hospitality

firms, the issue of training provision was

examined.

There is little point in investing in training

without attempting to measure its

effectiveness. Measuring the effectiveness oftraining is extremely difficult in any size of

firm. The small firms literature suggests that

owner-managers of small firms assess the

value of workforce training in an informal

way and tend to use various kinds of

subjective assessments. The firms in the

survey were questioned on if and how they

measured the effectiveness of training.

Research method

Researchers at The Centre for the Study of

Small Tourism and Hospitality Firms based

at Leeds Metropolitan University, UK, were

keen to examine business practices in small

firms both by breadth and depth. As such, it

was decided to administer a questionnaire to

[ 4 4 ]

Stephanie M. JamesonRecruitment and training insmall firms



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4,331 small firms. In total, 1,103 were returned

completed, giving a response rate of 26

percent. The project focused on four regions:

Cumbria; Heart of England; West Country;and Yorkshire. Eight sectors were chosen to

provide a broadly based cross-section of these

industries. These sectors were public house/

bar; travel agent; hotel; visitor attraction;

B&B/guesthouse; fast food/takeaway;

restaurant or cafe; self-catering. The vast

majority of firms in the sample were

independently-owned single outlet

businesses (80 per cent). The definition of a

small firm adopted for the survey is fewer

than 50 employees and is a conflation of the

European Commission's definition of very

small (or micro) enterprises (fewer than tenemployees) and small (between ten and 49

employees). The sample source was the

Business Database (British Telecom) and a

disproportionate stratified sample was

specified within the four regions to provide a

cross-section of experiences. This article

presents some of the findings of the national

survey of small tourism and hospitality

firms. The survey is the most comprehensive

of its kind ever to be undertaken in the UK

and examined business performance, the

business environment, marketing and

recruitment and training in small tourism

and hospitality firms. The survey representsa barometer of the changing attitudes and

behaviour of those operating small tourism

and hospitality firms.

This article concentrates on the

recruitment and training practices of the

firms in the survey. The aim of the research

was to discover the extent and nature of



Results

Informality and a relatively unsophisticated

management style characterise the approach

taken towards recruitment and training in

the small firms in the survey.

When respondents in the survey were

questioned about their recruitment activity

during the past year (see Table I), and more

specifically were asked about the methods

used to recruit staff, word of mouth was the

most commonly used recruitment method,

followed by local press and job centres.These findings support the advice in the

recruitment literature which normally

suggests that small firms should recruit from

the local labour market and should keep their

recruitment spending within a very tight

budget.

In addition to questions on recruitment,

respondents were asked a series of questions

on training practices. When they were asked

if they had a training plan for their business,

the results were as indicated in Table II.

Although only 11 per cent of small tourism

and hospitality firms had a formal writtenplan, significantly more had some sort of

training plan. Although this is lower than for

other industries and the hospitality industry

in general, it is higher than the figure for

small firms, and does indicate some

commitment to a systematic approach to

training.

As far as training budgets were concerned,

12 per cent of firms in the sample had them

(see Figure 1). This figure of 12 per cent is not

discouraging, and in fact, is almost identical

to the figure of 12.5 per cent for small firms in

general (Curran et al., 1996). Although both

the figures for training plans and budgetsappear encouraging, more details are

required on the exact nature of the training

plans and the precise amount of money

devoted to training in relation to turnover

etc. However, results from the survey do

seem to indicate that some small tourism and

hospitality firms are taking training

seriously.

Respondents were asked if they had

provided training during the past 12 months

(see Table III). On-the-job training was the

most common training method used by small

tourism and hospitality firms. This wasfollowed by external training courses and

induction. These results are unsurprising as

small firms in general tend to favour

informal training methods and usually value

training which is specific to the job in

question. Although on the job training may

be appropriate for many jobs in small

tourism and hospitality firms, this reliance

on informal, unsophisticated trainingTable I

Sources of recruitment

Value Rank order

Word of mouth 805 1

Local press 444 2Job centre 358 3

College/training providers 171 4

Other 111 5

Trade press 95 6

Table II

Incidence of training plans

Number Percentage

Yes, a formal written plan 124 11

Yes, an informal unwritten

plan 280 25

No 315 29

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methods is typical of weak internal labour

markets which generally have low skill

requirements and lack training and

promotion opportunities. This can be

interpreted as part of the whole package of

the informal, unsophisticated approach to

the management of human resources in small

firms which is characterised by vague hiring

standards and unsystematic recruitment. It

runs counter to the primary labour market

which has a strong internal labour market

with precise hiring standards, formalised

recruitment, high skill requirements and

opportunities for training and promotion.

Respondents in the survey were askedabout training courses provided by external

agencies and their replies produced the

following response (see Table IV).

As far as the small tourism and hospitality

firms in the sample were concerned the

courses which they found to be ``very helpful''

were organised by private providers (42 percent found them to be very helpful). The

provider who ranked second in the ``very

helpful'' category was trade associations with

40 per cent. Courses provided by the banks

appeared to be the least helpful as they had

the highest percentage of respondents in the

``not very helpful''category. Banks continue

to be in the limelight as far as services to

small businesses are concerned. Obviously it

depends on which bank and which courses

small tourism and hospitality businesses

have experienced. Much also depends on the

expectations that the owner/managers haveof such a service. When the positive

responses were combined, i.e. ``very helpful''

and ``helpful'', the providers who fared best

were private providers (86 per cent), trade

associations (83 per cent) and local

authorities (83 per cent). The banks' results

were worst with only 40 per cent of

owner-managers finding their courses

helpful.

When respondents were questioned on

active involvement in education or training

initiatives, the results showed the following

(see Table V). As far as Investors in People is

concerned the 9 per cent of small tourism andhospitality firms which were either

committed to or recognised as Investors In

People is still much higher than the industry

average of 3 per cent. This contrasts with the

HtF's suggestion that small firms are only as

likely as large firms to engage in Investors in

People activity.

Another finding which contradicts the

HtF's view is that NVQ/SVQs have not been

implemented in smaller hospitality

establishments. Again, 17 per cent of small

tourism and hospitality firms in the survey

were participating in NVQs and SVQs.Highest participation was work experience

for school pupils and work experience for

college students and both of these

Figure 1

Incidence of training budgets

Table IIIForms of training offered by sample forms

Value Percentage

External training courses in

work time 354 32

Induction training 313 28

Internal off the job training

courses 153 14

On the job training 633 57

Other 33 3

Table IV

Assessment of courses by various providers

Bank

Chamber of

commerce College/university Local authority Private provider Tourist board Trade association

No. % No. % No. % No. % No. % No. % No. %

Very

helpful 4 13 8 18 50 32 43 31 65 42 38 26 46 40

Helpful 8 27 19 43 73 47 71 51 67 44 81 54 8 7

Not very

helpful 5 17 5 11 19 12 13 9 9 6 20 13 12 10

Don't

know 13 43 12 27 14 9 11 8 13 8 10 7

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` initiatives'' have traditionally been

extensively utilised by tourism and

hospitality firms of all sizes.

As mentioned above, it is pointless to

invest in training unless some attempt is

made to measure its effectiveness. In this

survey of small tourism and hospitality firms

one-third of respondents attempted to

measure the effectiveness of training within

their firm (see Figure 2). This again indicates

that some small tourism and hospitality

firms are taking training seriously.

In the survey a question on future training

intentions was divided into three sections;

those relating to owner-managers, managers,

staff. The results are summarised in Table VI

Not surprisingly, the most likely recipients of

training in these firms in the next 12 months

will be staff. This may illustrate an intention

to take training seriously but, of course, this

intention needs to be reviewed in a year's

time. It is also necessary to evaluate the level,

type, and quality of training being provided.

Although there is an intention to train

owner-managers in the next 12 months these

are the people in small tourism andhospitality firms least likely to receive

training in the next year. Given their

importance as trainers, there is a case to be

made that they should receive more support

and training on how to train their workers

more effectively. Authors such as Pittaway

(1999) discovered that SME owners felt that

their own skills impacted on the performance

of the business and that they needed further

training.

ConclusionIn conclusion, this research has been

undertaken as a result of the gap in

knowledge on training in small firms, and

more specifically on training in small

tourism and hospitality firms. It suggests

that this gap should not be allowed to

continue, due to the growth and increasing

importance of the tourism and hospitality

industries and the nature of human

resources within them. The research

operates from the premiss that small firms

are not microcosms of large firms, and as

such require separate treatment. It is

therefore inappropriate and inadequate

simply to utilise previous research which is

based on the large firm sector.

This research has attempted partially to fill

the gap in knowledge about the extent and

nature of training in small tourism and

hospitality firms.

As expected, recruitment and training in

small hospitality firms are largely carried

out on an informal basis. This is entirely

appropriate for the sizes of firms in question

and is consistent with research conducted in

various industry sectors. Implications ofinformality, however, may include being in

breach of current employment law and may

also result in recruiting people who are

inappropriate in the long run. Informal

Figure 2

Measuring training effectiveness

Table VI

Provision of training: owner-managers,

managers, staff

Owner/

manager Manager Staff

Intention to train No. % No. % No. %

Probably 159 14 215 20 390 35

Possibly 75 7 87 8 186 17

Unlikely 305 28 224 20 219 20

Don't know 66 6 46 4 63 8

Table V

Government training initiatives

Number PercentageInvestors in People: committed 39 4

Investors in People: recognised 56 5

Education and business

partnership 12 1

Modern apprenticeships 53 5

Work experience for school

pupils 213 21

Training for S/NVQs 179 17

Training for work (unemployed

adults) 19 2

Work experience for college

students 178 17

Youth training/youth credits37 4

[ 4 7 ]




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recruitment practices and inappropriate

selection can lead to high labour turnover.

Compared with other industries,

hospitality and tourism have higher thanaverage skills shortages, labour turnover and

hard to fill vacancies at every level (HEFCE,

1998). The scenario is one in which firms rely

heavily on the secondary labour market and

exhibit high levels of recruitment. It is

argued that high levels of recruitment can

affect the level of training in a firm. In fact,

Hendry et al. (1991) found that in some cases,

managers may prefer to recruit rather than

train. Wynarczyck et al. (1993) discovered

that the absence of an internal labour market

in a small firm can impede the provision of

formal training. Although this survey hasnot found a high level of formal training in

small tourism and hospitality firms, it has

discovered that in some firms, training is

being taken seriously.

Although as mentioned above, small

businesses experience problems in providing

training and the hospitality industry has one

of the lowest training levels in the UK, small

firms in this sector actually had higher

incidences of training plans than small firms

in other sectors.

Informality is again present in relation to

the types of training offered in the firms. As

expected, on-job training predominates.Although it is essential to train people to do

the job for which they have been appointed,

this reliance on informal training can result

in the exclusion of staff development in a

more general sense and can reduce the

likelihood of developing an internal labour

market. Dependence on informal on-job

training can increase the utilisation of the

external labour market which enforces the

vicious circle of high levels of recruitment

and low levels of training.

Optimism regarding training in small

tourism and hospitality firms can again beseen when examining results of relationships

with Investors In People and NVQs. The

results of this survey indicated that in both

cases small firms had higher levels of

commitment than the hospitality industry in

general.

Overall this research has offered a

snapshot of the nature and extent of



It is suggested that more research needs to

be conducted to establish if correlations exist

between training activity and the type and

size of small tourism and hospitality firm. It

is also proposed that whether or not a firm is

in a stage of growth can determine attitudes

towards and participation in training. Future

research should concentrate on depth rather

than breadth and a more qualitative

approach would be appropriate which

determine the reasons why small firm owner-

managers decide to train/or not, how theydecide on the type of training and if the type

of training is effective in the small firm

context.

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the European Tourism and Hospitality

Industry A Strategic Approach, Chapman &

Hall, London.

Boella, M.J. (1996), Human Resource Management

in the Hospitality Industry, 6th ed., Stanley

Thornes, Cheltenham.

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formation and local economic performance'',

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[ 4 9 ]



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