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Page 1: Global Talent Trends and Issues for the Travel & Tourism Sector

Final Report - January 2015 1

January - 2015

Global Talent Trends and Issues for the Travel & Tourism Sector

Page 2: Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 20152 3

Global Talent Trends and Issues for the Travel & Tourism Sector

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

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Contents

Foreword Introduction Human capital issues in context Talent demand-supply balance and enabling environment analysisEconomic cost impact of talent gaps and deficienciesAnnex AAnnex B Annex C Annex D

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ForewordThe 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.

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.

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.

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.

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.

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.

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 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 ScowsillPresident & CEOWorld Travel & Tourism Council

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Introduction

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.

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

3 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.

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.

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.

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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.

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.

• 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.

• 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.

• 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.

• 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.

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

‘ 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

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

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.

1.1 • 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.

• 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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Human Capital Issues in Context

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.

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.

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.

Travel & Tourism talent supplyThe 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.

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.

2.1

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.

5 UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-tourism6 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-talent-gap/

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2.2

2.2.1

2.2.2

Imbalances between Travel & Tourism talent demand and supplyTalent imbalances in Travel & Tourism take many forms, covering both shortages and surpluses:

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

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

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

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.

Lack of country-specific Travel & Tourism talent imbalance evidence

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’.

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).

Economy-wide talent imbalances

• 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.

Impacts of talent imbalances

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.

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.

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.

• 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.

2.2.3

2.2.4

9 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

10 Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf 11 https://www.gov.uk/government/publications/tourism-sector-skills-insights12 Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf

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

Career attractiveness and pathways

• 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.

• 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.

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

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

• 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.

Competition

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

• 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.

• 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.

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.

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

• 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.

• 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.

Uncompetitive pay

• 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

• 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.

• 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.

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

2.3

13 British Columbia Labour Market Strategy: http://www.jtst.gov.bc.ca/skills_for_growth/14 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_briefing15 http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourism.pdf16 UK state of nation report 2013: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism17 UK state of nation report 2013: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism18 UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-tourism19 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).

20 UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-tourism21 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-tourism23 Rwanda Development Board – Rwanda Skill Survey 2012 – T&H Report: http://www.lmis.gov.rw/scripts/publication/reports/Tourism.pdf

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Structural characteristics

• 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 in-house human resources department.

• 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.

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

• 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.

Government policy and engagement

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

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

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

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

Economy-wide reasons for talent shortages • 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 projectionsReplacement 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.

• 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.

2.4

24 UK state of nation report: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourism25 http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourismpdf26 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 Sectorhttp://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/

29 Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf30 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-insights-tourism32 UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-tourism33 http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourism.pdf

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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.

Travel & Tourism talent best practice policy 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.

Economy-wide talent best practice

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.

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:

2.5.1

34 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.ashx36 http://www.whatsonsanya.com/news-18722.html37 2012 Study by the Singapore Tourism Board (STB) and The Boston Consulting Group38 Manpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdf

• A strong customer service base

• A youthful workforce

• Aflexiblelabourmarket

• 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

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2.5.2 2.5.3General Travel & Tourism talent best practice

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

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

• 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.

Travel & Tourism talent best practice42

• 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, pre-employment 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.

INDUSTRY EDUCATION GOVERNMENT

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

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

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

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

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

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

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

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

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

39 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”

42 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

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2.5.4

2.5.5

2.5.6

2.5.7

Australia case study43

• 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

• 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.

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.

• 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.

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 www.etf.org.eg47 Pacific Asia Travel Association: http://www.pata.org/Members/6461

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Talent demand-supply balance & enabling environment analysis

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.

Talent demand-supply balance projection analysisQuantifying 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).

3.1

3.1.1

Source: Oxford Economics, WTTC

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.

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)

DEMAND RANK SUPPLY

1 1

2 2

3 3

4 4

5 5

42 42

43 43

44 44

45 45

46 46

THAILAND

TURKEY

TURKEY

SAUDI ARABIA

SAUDI ARABIA

PHILIPPINES

CZECH REPUBLIC

BAHRAIN

COSTA RICA

OMAN

OMAN

SOUTH KOREA

SOUTH KOREA

AUSTRALIA

AUSTRIA

RUSSIA

JAPAN

JAPAN

NORWAY

GERMANY

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).

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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.

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.

Travel & Tourism talent demand-supply balance projections: Long-run (2014-2024)

37ofthe46countriesareforecasttohavedeficitTravel&Tourismtalenttrendsoverthenextdecade, 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.

Thefollowing12countriesareprojectedtohavethemostacutedeficit 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 EconomyOver 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). Nocountriesareprojectedtohaveeconomy-widetalentdeficittrends 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.

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.

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).

43of46countrieswithprojectedtalentdeficittrendsatbelowhighschoollevel,ofwhichfor32thedeficitisgreaterthan1percentagepoint,isastrikingfinding.

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 growingdemandforbelowhighschoolleveltalent–withtheeffectoftechnologynotseeminglyreplacingthisdemand(seeboxbelow)-andadecliningshareofthelabour supply with below high school attainment, are they key factors behind this challenging talent projection for Travel & Tourism.

3.1.2

3.1.3

3.1.4

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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 extentandmainlywithsupportandadministrativeroles.

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 medium-terms that HR managers most need to prepare their current workforce for.

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.

3.1.5

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

Travel & TourismAll education levelsLong-run (2014-2024)

Travel & TourismAll education levelsLong-run (2014-2024)

Total EconomyAll education levelsLong-run (2014-2024)

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

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

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Travel & Tourism

Long-run (2014-2024)

CollegeUniversity level

HighSchool level

BelowHighSchool level

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

Table 3.2: Countries with projected talent deficit trends < -1% (acute talent shortages)

Travel & TourismAll education levelsLong-run (2014-2024)

Travel & TourismAll education levelsMid-run (2014-2019)

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

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

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

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

-2.9-1.4

-2.1-1.4

-1.3-1.6-1.6

-1.6-1.4

-2.5

-2.3-2.6

-1.1

Travel & Tourism: Talent deficit

All education levels

Long-run (2014-2024)

All education levels

Medium-run (2014-2024)

College /University level

Long-run (2014-2024)

High school level

Long-run (2014-2024)

Below High school level

Long-run (2014-2024)

- - - -

- - -

- -

- -

- -

-

-

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-

-

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-

-

-

- - - -

- - -

- -

- -

-

-

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- -

-

-

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-

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-

- - - - -

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-

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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.

3.1.6

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

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

Travel & Tourism

Feedback from survey of WTTC member companies

Too optimistic

Too optimistic

Too optimisticToo optimistic

Too optimisticToo optimistic

Too optimistic

Too optimistic

Too pessimistic

Too pessimistic

Too pessimisticToo pessimistic

Too pessimistic

Too optimistic

Too optimisticToo optimistic

Too optimistic

Too optimistic

Too optimisticToo optimistic

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

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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.”

Countries where projections were deemed pessimistic

• 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.

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

• 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.

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

Source: Oxford Economics, WTTC

Source: Oxford Economics, WTTC

Source: Oxford Economics, WTTC

Source: Oxford Economics, WTTC

-4.5

-4.0

-3.5

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

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

Economy: Total supply minusdemand

T&T: Total skil l weighted supplyminus demand

Thailand: Talent supply minus demand future balance

Source: Oxford Economics, WTTC

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

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

T&T: College educated supply minusdemand

T&T: High school educated supplyminus demand

T&T: Below high school educatedsupply minus demand

Thailand: T&T supply minus demand future balance

Source: Oxford Economics, WTTC

-4.5

-4.0

-3.5

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

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

Economy: Total supply minusdemand

T&T: Total skil l weighted supplyminus demand

Thailand: Talent supply minus demand future balance

Source: Oxford Economics, WTTC

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

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

T&T: College educated supply minusdemand

T&T: High school educated supplyminus demand

T&T: Below high school educatedsupply minus demand

Thailand: T&T supply minus demand future balance

Source: Oxford Economics, WTTC

Thailand: Talent supply minus demand future balance Thailand: T&T supply minus demand future balance

India: Talent supply minus demand future balance India: T&T supply minus demand future balance

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

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

Economy: Total supply minus demand

T&T: Total skil l weighted supply minus demand

India: Talent supply minus demand future balance

Source: Oxford Economics, WTTC

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

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

T&T: College educated supply minusdemandT&T: High school educated supply minusdemandT&T: Below high school educated supplyminus demand

India: T&T supply minus demand future balance

Source: Oxford Economics, WTTC

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

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

Economy: Total supply minus demand

T&T: Total skil l weighted supply minus demand

India: Talent supply minus demand future balance

Source: Oxford Economics, WTTC

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

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

T&T: College educated supply minusdemandT&T: High school educated supply minusdemandT&T: Below high school educated supplyminus demand

India: T&T supply minus demand future balance

Source: Oxford Economics, WTTC

3.1.7

Page 20: Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 201538 39

Talent enabling environment analysisAn 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

Talent enabling environment: Overall and individual pillarsThe 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.

• 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).

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.

3.2

3.2.1

Page 21: Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 201540 41

Talent enabling environment: Country comparison, Singapore versus RussiaThe 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.

3.2.2

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

Table 3.4: Travel & Tourism talent enabling environment pillar z scores

Overal Customer service

Demo-graphics

Flexibility of labour market

Industry relative attractive-ness

Openness TrainingPrioritisation of T&T and existing T&T skill base

Quality of general human resources

Recruitment competition

Spare la-bour market capacity and female participation

Travel & Tourism: Talent enabling environment overall and pillar z scores

Weight

QatarUAESwitzerlandSingaporeMalaysia

100% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

USAustriaSwedenUKThailandCosta RicaCanadaBermudaBarbadosNetherlandsSaudi ArabiaBahrainMoroccoSouth AfricaOmanTaiwanAustraliaNorwayChinaJapan

Peru

Turkey

Chile

Mexico

South Korea

France

Phillippines

Spain

Kuwait

Brazil

Indonesia

India

Germany

Greece

Poland

Colombia

Argentina

Italy

Egypt

Russia

CzechRepublic

0.880.810.760.580.520.460.440.420.380.370.360.330.310.28

0.250.210.17

0.040.070.110.11

0.00-0.02-0.03-0.05

-0.06

-0.06

-0.07

-0.10

-0.14

-0.14

-0.15

-0.15

-0.15

-0.16

-0.16

-0.19

-0.21

-0.28

-0.28

-0.33

-0.33

-0.38

-0.74

-0.22

-0.22

0.470.521.650.890.820.861.251.111.06

-0.640.180.65

-0.08-0.081.33

-0.040.00

-0.92-0.14-0.640.360.460.84

-0.470.92

-1.34

-0.98

-0.10

-0.62

-0.08

0.34

-0.32

-0.95

-1.62

-0.01

-0.39

-0.63

1.23

-0.33

-1.43

-0.98

-1.28

-2.15

-1.39

-0.02

-1.88

1.330.641.610.840.750.661.541.440.440.620.070.82

-0.71-0.710.550.09

-0.13-0.73-0.690.381.260.480.26

-1.022.45

-0.26

0.62

-0.77

-0.29

1.04

-0.62

0.42

-0.75

-0.69

-0.35

-0.84

-0.66

0.75

-0.27

-0.07

-2.61

-0.49

-0.99

-2.49

-0.57

-1.06

1.651.82

-0.450.011.11

-0.26-0.50-0.45-0.400.070.85

-0.47-0.08-0.08-0.591.071.220.821.012.35

-0.13-0.21-0.290.21

-0.99

1.02

0.77

0.37

0.98

-0.13

-0.54

1.10

-0.64

1.25

0.75

0.85

1.02

-0.85

-0.41

0.81

0.51

-0.82

0.90

-0.36

-0.53

-0.71

1.731.802.012.041.281.89-020-0.951.311.121.001.750.980.98

-0.791.560.580.41

-1.190.440.13

-0.65-1.001.09

-0.98

-0.36

1.05

-0.08

-0.51

-0.41

-1.14

-0.39

-0.86

-0.04

-0.53

0.86

0.48

-0.81

-0.27

0.08

-1.09

-1.02

-0.58

0.04

-0.44

-0.46

0.690.26-0.31-1.210.03

-0.480.46

-0.670.801.30

-0.68-0.03-0.21-0.891.40

-0.192.982.290.25

-0.75-0.65-0.351.01

-0.711.12

-0.02

1.05

1.34

-1.01

-0.18

1.13

-0.31

-0.87

1.08

1.32

1.41

-0.88

-0.44

0.41

1.08

-0.46

-0.33

2.48

-1.23

0.53

0.02

2.06

2.091.081.070.450.29

-0.310.670.500.00

-0.210.05

-0.08-0.210.810.711.13

-0.18-1.15-0.44-0.77-0.640.630.70

-0.84

-0.36

-0.53

0.54

-0.19

-0.68

-0.80

-0.96

0.15

1.08

-0.64

-0.21

-0.77

-0.14

-0.76

-0.11

0.40

-0.04

-1.13

-1.08

-0.53

-0.30

-0.590.930.090.631.03

-0.280.82

-0.200.420.780.53

-0.402.082.260.40

-0.800.361.490.430.37-0.280.27

-0.33-0.58-0.42

-0.49

-0.20

-0.64

0.69

-0.56

0.40

-0.10

0.82

-2.02

-0.71

-0.67

-0.31

-1.08

-1.39

-0.67

-0.45

-0.24

0.55

-1.55

0.01

1.13

0.550.901.421.410.001.460.631.071.14

-0.740.131.110.370.371.04

-0.19-0.31-1.50-1.36-0.850.300.530.80

-0.040.10

-1.02

-0.68

0.31

-0.80

0.18

0.17

-1.27

0.25

-0.54

-1.01

-1.57

-1.34

0.64

-0.27

-0.89

-0.70

0.05

-1.58

-0.94

0.08

-0.19

2.08-0.010.580.430.140.640.99

-0.281.87

-0.030.360.04

-1.27-0.290.26

-0.62-0.33-0.840.06

-0.420.510.18

-0.99-1.420.31

0.99

-0.35

-1.24

-1.19

0.59

0.29

-1.11

-1.09

2.38

-0.12

-0.83

-1.78

-0.74

0.54

-1.30

0.48

0.46

-0.83

1.26

0.14

-0.98

-1.14-0.83-0.03-0.28-0.490.280.050.610.27

-0.16-0.220.401.950.730.38

-1.13-0.61-0.431.83

-0.72-0.220.210.210.19

-0.30

0.12

-0.25

-0.16

-0.42

-0.35

0.65

0.03

1.86

-0.47

-0.02

-0.14

0.70

-0.25

0.06

0.40

0.07

0.52

-0.46

0.31

1.70

0.38

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

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

Travel & Tourism: Talent enabling environment pillar z score

SINGAPORE RUSSIA

Overall

Customer service

Openness

Flexibility of labour market

Quality of general human resources

Demographics

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

Industry relative attractiveness

Recruitment competition

Spare labour market capacity and female participation

Training

0.84

-1.21

0.01

1.07

2.04

0.63

1.41

0.43

-0.28

0.89

0.58

-2.49

-1.23

-0.36

-1.08

0.04

-1.55

-0.94

1.26

0.31

-1.39

-0.74

Page 22: Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 201542 43

Composite talent measureThe 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.

• 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.

• 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).

3.3Table 3.6: Travel & Tourism talent demand-supply balance projections and talent enabling environment ranks

Source: Oxford Economics, WTTCTalent 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

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

Thailand

Poland

US

Barbados

Kuwait

Canada

Peru

Australia

Norway

UK

China

Austria

South Africa

Colombia

Bermuda

Oman

Singapore

Malaysia

Morocco

Sweden

Costa Rica

Switzerland

Saudi Arabia

Japan

Indonesia

Russia

Egypt

Chile

Turkey

Bahrain

Brazil

Mexico

France

Germany

UAE 1 35 8 15 2 13

Spain

South Korea

Taiwan

Qatar

Czech Republic

Greece

Italy

India

Argentina

Philippines

Netherlands

Methodology 1Combined

Weights 100% 10% 10% 30% 50%

Talent demandprojections(2014-2024)

Talent supply projections(2014-2024)

Talent demand-sup-ply balance projections(2014-2024)

Talent enabling environment

Rank difference:Talent demand-supply

balance projections minus talent enabling

environment

Methodology 2

2 34 12 22 1 21

3 17 22 16 6 10

4 8 26 10 14 -4

5 39 2 4 17 -13

6 19 21 17 12 5

7 23 24 32 3 29

8 4 27 6 22 -16

9 1 39 3 23 -20

10 13 29 26 9 17

11 31 11 13 18 -5

12 7 42 29 7 22

13 25 17 12 19 -7

14 36 14 34 5 29

15 11 34 25 13 12

16 44 1 21 16 5

17 26 31 38 4 34

18 29 5 1 32 -31

19 10 25 14 24 -10

20 16 28 31 15 16

21 28 32 39 8 31

22 21 10 2 37 -35

23 3 45 18 25 -7

24 42 15 41 11 30

25 18 18 9 35 -26

26 15 23 20 28 -8

27 43 3 33 20 13

28 33 13 19 29 -10

29 22 19 11 36 -25

30 2 41 7 38 -31

31 12 30 24 31 -7

32 27 9 8 42 -34

33 46 37 46 10 36

34 9 33 23 33 -10

35 30 7 5 45 -40

36 5 44 27 30 -3

37 45 4 36 27 9

38 40 6 30 34 -4

39 32 38 44 21 23

40 41 16 42 26 16

41 6 43 28 39 -11

42 14 36 35 40 -5

43 24 35 37 44 -7

44 38 20 40 43 -3

45 37 40 45 41 4

46 20 46 43 46 -3

Page 23: Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 201544 45

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

Source: Oxford Economics, WTTC

0

5

10

15

20

25

30

35

40

45

50

-4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0

Travel & Tourism: Talent trend and talent enabling environment

Source: Oxford Economics, WTTCDEFICIT ---------- Talent balance projected trend (2014-2024) ---------- SURPLUS

TOP

RAN

K---

-----

Tale

nt e

nabl

ing

envi

ronm

ent-

------

-BO

TTO

M R

ANK TALENT PROJECTED TREND DEFICIT

WEAK TALENT ENABLING ENVIRONMENT

TALENT PROJECTED TREND SURPLUSSTRONG TALENT ENABLING ENVIRONMENT

Poland

Russia

Thailand

Bahrain

Egypt

Greece

Italy

Argentina

Peru

Taiwan

SingaporeSwitzerland

US

China

India

Brazil

Travel & Tourism: Talent trend and talent enabling environment

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

Page 24: Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 201546 47

Economic cost impact assumptionsIt 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.

Table 4.1: Economic cost impact assumptions of Travel & Tourism talentgapsanddeficiencies

4.1 Travel & Tourism: Country economic cost impactoftalentgapsanddeficienciesassumptions(2014-2024 pp adjustment to annual average growth versus baseline)

Employment Labourproductivity

Thailand

Poland

Taiwan

Russia

Argentina

Italy

Peru

Turkey

Czech Republic

Greece

Costa Rica

France

South Korea

Colombia

Spain

Oman

Kuwait

Malaysia

Morocco

Sweden

Singapore

Switzerland

Saudi Arabia

Japan

Indonesia

Bermuda

Egypt

Chile

Austria

Bahrain

Brazil

Mexico

UK

Germany

UAE

Canada

South Africa

Barbados

Qatar

China

US

Australia

India

Norway

Philippines

Netherlands

-2.3

-1.5

-1.5

-1.5

-1.5

-0.5

-0.5

-1.5

-1.1

-0.7

-0.7

-0.7

-0.6

-0.6

-1.3

-1.3

-1.2

-1.2

-1.2

-1.2

-0.6

-0.6

-1.0

-1.0

-1.0

-1.0

-1.5

-1.5

-1.3

-1.3

-1.2

-1.0

-1.5

-1.0

-1.0

-1.0

-1.0

-1.0

-1.0

-1.0

0.0

0.0

0.0

0.0

0.0

0.0

-0.5

-0.5

-0.5

-0.5

-0.5

-0.5

-0.4

-0.8

-0.7

-0.7

-0.7

-0.7

-0.6

-0.5

-0.4

-0.4

-0.4

-0.4

-0.3

-0.5

-0.5

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-0.8

-1.5

-1.5

-1.5

-1.5

-1.5

Source: Oxford Economics, WTTC

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Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 201548 49

4.2 Economic cost impact results: 14 million jobs and nearly US$610 billion GDP by 2024The 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%.

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

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

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 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.

Travel & Tourism: World economic cost impactoftalentgapsanddeficiencies(2024 versus baseline)

TOTAL

T&T employment

T&T GDP

Millions

US$ bn 2013 prices & exchanges rates

%

%

-5.5

-270

-4.4%

-8.0%

-14.1

-607

-4.0%

-5.5%

Source: Oxford Economics, WTTC

UNITS DIRECT

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

Annex A

Literature review bibliographyAustralia 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-SkillsBritish 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-tourism-labour-market-strategyCanadian 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.ashxCEDEFOP – Future skills supply and demand in EuropeCEDEFOP Panorama series 115 – Trends and Skills Needs in Tourism: http://www.cedefop.europa.eu/EN/Files/5161_en.pdfE&Y Tracking global trends: How six key developments are shaping the business world - Demographic shifts transform the global workforceIndia Hospitality Review - Shortage of Skilled Manpower in Hospitality Industry: http://www.indiahospitalityreview.com/article/shortage-skilled-manpower-hospitality-industryLocal Government’s engagement in tourism – Australia (2006): http://www.lga.sa.gov.au/webdata/resources/files/Local_Governments_Engagement_in_Tourism_-_July_2006.pdfManpower 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=AJPERESManpower Group - 2014 Talent Shortage Survey Results: http://www.manpowergroup.co.uk/media/137404/2014_talent_shortage_wp_us2.pdfMcKinsey and Company – The State of Human Capital 2012: http://www.mckinsey.com/client_service/organization/expertise/human_capitalMcKinsey 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_briefingNavigating the next phase of Asia’s tourism: http://www.yoursingapore.com/TravelRave/resources/TravelRave2013-Highlights-Report_Navigating-the-next-wave-in-Asia%27-Tourism.pdfNew 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 magazineNew Zealand Tourism Skills Shortage Report: http://www.dol.govt.nz/PDFs/industry-profile-tourism.pdfRwanda Development Board – Rwanda Skill Survey 2012 – T&H Report: http://www.lmis.gov.rw/scripts/publication/reports/Tourism.pdfStanding 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.htmlThe Boston Consulting Group: Creating people advantage 2011 - Time to Act: HR certainties in uncertain times: http://www.bcg.com/documents/file87639.pdfThe Hospitality Talent Gap, China Business Review: http://www.chinabusinessreview.com/the-hospitality-talent-gap/UK Commission for Employment and Skills – Skills Sector Insights: Tourism: http://www.ukces.org.uk/publications/er55-sector-skills-insights-tourismUK State of Nation Report 2013: http://www.people1st.co.uk/research/reports/state-of-the-nation-hospitality-and-tourismUNDP 2013 Human Development Report: http://hdr.undp.org/en/2013-reportWorld Economic Forum Travel & Tourism Competitiveness Report 2013: http://www.weforum.org/reports/travel-tourism-competitiveness-report-2013

ChinaThailandIndiaIndonesiaUSRussiaBrazilTurkeyMexicoItalyUKMalaysiaMoroccoArgentinaJapanFranceSpainPeruPoland

South AfricaTaiwan

South KoreaColombiaCanadaSweden

Greece

Saudi Arabia

Australia

Switzerland

Netherlands

Australia

Germany

Czech Rep.

Costa Rica

UAE

Singapore

Chile

Oman

Egypt

Kuwait

Qatar

Barbados

Bermuda

Norway

Phillippines

Bahrain

-3,773-1,617-1,584

-647-647-640-467-412-385-372-352-312-281-265-264-219-192-189-140-111-111-104

-92-86-81

-67

-65

-64

-61

-61

-60

-55

-54

-48

-48

-40

-38

-12

-7

-6

-3

-1

0

0

-11

-10

ThailandRussiaTaiwanPolandCosta RicaTurkeyItalyArgentinaMalaysiaMoroccoSwedenPeruSingaporeSwitzerlandSaudi ArabiaOmanBermudaAustriaCzech Rep.

GreeceBahrain

UKUAEFranceCanada

Netherlands

South Korea

South Africa

Spain

Colombia

Barbados

Japan

Indonesia

Kuwait

Chile

Qatar

Brazil

China

US

Australia

India

Germany

Egypt

Norway

Phillippines

Mexico

-20%-14%-14%-14%-14%-14%-12%-12%-12%-12%-11%-11%-11%-11%-11%-10%-10%-9%-9%-9%-8%-8%-7%-7%-7%

-7%

-6%

-6%

-6%

-6%

-6%

-6%

-5%

-5%

-5%

-5%

-4%

-4%

-4%

-4%

-2%

0%

0%

0%

-4%

-4%

8,2554,647

8141,027

3553,0473,0942,2192,6482,429

7161,676

354561599116

9674577121846

4,662696

3,2621,286

932

1,624

1,774

3,077

1,494

54

4,660

11,957

135

801

121

10,684

93,039

1,636

43,837

2,187

3,673

224

5,491

9,602

17,560

ChinaUSItalyRussiaFranceThailandUKJapanTurkeySpainBrazilMexicoIndonesiaArgentinaMalaysiaSwedenCanadaSouth KoreaIndia

GermanyPoland

AustraliaGreeceTaiwanAustria

Switzerland

Peru

Saudi Arabia

Singapore

Netherlands

Morocco

UEA

Czech Rep.

South Africa

Colombia

Chile

Egypt

Costa Rica

Oman

Kuwait

Bahrain

Barbados

Bermuda

Norway

Phillippines

Qatar

-78-76-43-36-32-32-28-27-26-24-19-17-11-11-10-10-9-9-9-8-8-8-7-7-6

-6

-6

-6

-6

-4

-4

-3

-3

-3

-3

-2

-2

-2

-1

-1

0

0

0

0

-1

-1

ThailandPolandTaiwanItalyRussiaTurkeyArgentinaPeruCosta RicaCzech Rep.GreeceOmanMalaysiaMoroccoSwedenSingaporeSwitzerlandSaudi ArabiaFrance

BermudaSouth Korea

SpainAustriaColombiaBahrain

Kuwait

UK

Japan

Indonesia

UEA

Canada

Netherlands

Chile

South Africa

Brazil

Barbados

Mexico

Qatar

Germany

China

US

Australia

India

Norway

Phillippines

Egypt

-23%-19%-18%-17%-17%-17%-16%-16%-15%-14%-13%-12%-12%-12%-11%-11%-11%-11%-10%-10%-10%-10%-9%-9%-9%

-9%

-8%

-7%

-7%

-7%

-7%

-7%

-7%

-6%

-6%

-6%

-6%

-5%

-4%

-4%

-4%

-4%

0%

0%

-4%

-4%

1374536

251216158663710245310843687515753

31092

1251

68316

13

375

381

158

51

136

65

39

50

309

2

289

28

1,933

2,056

213

239

43

54

51

198

Total T&T employment000s unless stated

Impact % Impact 2024 baseline

Travel&Tourism:Countryeconomiccostimpactoftalentgapsanddeficiencies(2024 versus baseline)

Impact % Impact 2024 baseline

Total T&T GDPUS$ bn 2013 prices & exchange rates unless stated

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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.

Methodology 1: Talent demand-supply balance projections

Source of demand and supply projections

• 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.

• OxfordEconomicsGlobalTalentservice: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.

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

• 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.

• 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.

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.

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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 demand-supply 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.

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. Flexibilityoflabourmarket: 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. PrioritisationofTravel&TourismandexistingTravel&Tourismskills 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.

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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.

48 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.

Table A.1: Talent enabling environment pillar proxy variables

Travel & Tourism: Talent enabling environmental pillar variables and sources

Pillar and variable Year Source Additional detail

Customer service

Demographics

Degree of customer orientation

15-24% total population

WEF T&T Competitiveness Report Executive opinion survey question: How well do companies in your country treat customers?

2013

2014 UN15-39% total population 2014 UN15-64% total population 2014 UN50-64% 15-64 population 2014 UN15-24% total population pp change in share UN15-39% total population pp change in share UNpp change in 15-64% total population 2014-2024 UN

FlexibilityoflabourmarketHiring and firing practices WEF T&T Competitiveness Report Executive opinion survey question: How would you

charicterize the hiring and firing of workers in your country?2013

Industry relative attractivenessHigh level occupation share T&T minus whole economy

Oxford Economics Global Talent High level occupations sum of executives, professional and technical & administrative roles

2014

OpennessNet migration % total population OECD2008 - 2012International migrant stock % total population UN2013Ease of hiring foreign labour WEF T&T Competitiveness Report Executive opinion survey question: To what extent does labour

regulation in your country limit the ability to hire foreign labor?2013

Qualified labour inflow INSEAD Global Talent Competitiveness Index

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

2013

PrioritisationofT&TandexistingT&TskillsbaseGovernment prioritisation of T&T industry WEF T&T Competitiveness Report Executive opinion survey question: How much of a priority is the

development of the T&T industry for the government of your country?2013

T&T direct employment % total economy employment

WTTC/Oxford Economics Annual Economic Impact Research

2014

Quality of general human resourcesINSEAD Global Talent Competitiveness Index overall score

INSEAD Global Talent Competitiveness Index

2013

Heidrick & Struggles Global Talent Index overall score Heidrick & Struggles Global Talent Index2015Quality of labour force Heidrick & Struggles Global Talent Index2015 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)

Talent environment Heidrick & Struggles Global Talent Index2015 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 proper-ty and meritocratic remuneration (EIU risk briefing)

Availability of qualified labour WEF T&T Competitiveness Report (Sub-pillar measure)

2013

Recruitment competitionWholesale & retail employment demand growth Oxford Economics Global Talent2014 - 2024Wholesale & retail employment demand growth pp difference T&T employment demand growth

Oxford Economics Global Talent2014 - 2024

Spare labour market capacity & female participationFemale labour force participation rate ILOLatest

available

Female labour force participation rate pp differ-ence total labour force participation rate

ILOLatest available

Unemployment rate ILO2014

TrainingExtent of staff training WEF T&T Competitiveness Report2013 Executive opinion survey question: To what extent do companies

in your country invest in training and employee development?

Local availability specialised research & training WEF T&T Competitiveness Report2013 Executive opinion survey question: In your country, to what extent are high-quality, specialized training services available?

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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.

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.

Gulf Cooperation Council (GCC) larger weight for openness and labour marketflexibility: 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 marketflexibility: 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 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 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.

Table A.2: Talent enabling environment pillar weights

Source: Oxford Economics, WTTC

Travel & Tourism: Talent enabling environmental pillar

Weights

10.0%Customer service

10.0%Demographics

10.0%Flexibility of labour market

10.0%Industry relative attactiveness

10.0%Openness

10.0%Prioritisation of T&T and existing T&T skill base

10.0%Quality of human resources

10.0%Recruitment competition

10.0%Spare labour market capacity and female participation

10.0%Training

100.0%Sum

Page 31: Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 201560 61

Annex C

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

Australia

Brazil

AustriaBahrain

BarbadosBermuda

Argentina

CanadaChileChina

ColombiaCosta RicaCzech Rep.EgyptFranceGermanyGreeceIndiaIndonesiaItalyJapanKuwaitMalaysiaMexicoMorocco

Netherlands

Norway

Oman

Peru

Phillippines

Poland

Qatar

Russia

Saudi Arabia

Singapore

South Africa

South Korea

Spain

Switzerland

Taiwan

Thailand

Turkey

UAE

UK

US

Sweden

-2.610.481.54

-0.13

-0.71-0.71-0.350.82

-0.77-1.02-0.070.07-0.57-0.99-0.620.75

-1.06

-0.66-0.84-0.492.45

-0.690.75

-0.29-0.73

0.55

0.26

0.38

-0.26

0.42

-0.27

1.33

-2.49

0.09

0.84

-0.69

1.04

-0.75

1.26

0.62

0.62

0.64

0.44

0.66

1.44

1.61

0.78-0.20-0.650.26

0.020.020.91

-0.400.770.201.291.22

-1.001.41

-0.52-1.11-1.301.520.98

-1.30-1.390.391.671.49

1.44

-0.58

-0.24

2.67

1.57

1.91

-0.55

-0.12

-0.72

0.64

0.17

1.46

-0.06

-1.45

-0.06

-0.09

0.98

-0.02

-0.53

-0.03

-0.42

-0.71

0.28-0.24-0.621.59

-0.16-0.16-0.52-0.40

0.160.15

0.450.64

-0.30

0.55-0.68-0.90-0.700.610.44

-0.93-0.991.720.85

0.490.62

-0.75

-0.46

2.85

0.60

0.57

-0.03

2.85

-0.05

0.97

0.03

0.75

-0.12

-0.58

-0.12

-0.03

0.50

3.00

-0.54

-0.34

-0.60

-0.51

-0.46-0.18-0.021.89

0.620.62

0.300.170.371.16

-0.170.520.12

-0.81-0.74-0.28-0.35-0.25-0.18-0.54-1.201.190.33

-0.34-0.01

-0.34

-0.38

1.50

-0.42

-1.00

0.61

3.00

0.75

0.27

1.34

-0.44

1.19

-0.12

1.19

1.03

0.01

3.00

-0.51

-0.19

-0.81

0.04

0.70-0.05-0.431.88

-0.23-0.230.82

-0.56

0.330.340.96

0.82-0.25

1.22-0.42-0.84-0.391.17

1.11-0.53-0.582.231.171.211.07

-0.61

-0.16

2.68

1.26

1.42

-0.43

2.56

-0.47

1.67

-0.19

1.27

-0.15

-0.17

-0.15

0.05

0.96

3.00

-0.23

-0.35

-0.25

-0.32

0.94-0.65-0.361.20

-0.46-0.46

1.16-1.170.00

-0.571.100.76

-0.83

1.49-0.25-0.55-0.071.621.990.00

-0.440.870.89

1.690.13

-0.43

-0.15

0.63

1.53

1.68

-1.82

0.66

-0.98

2.17

-1.19

1.34

-1.39

0.10

-1.39

-0.06

1.23

0.82

0.07

-0.56

-0.16

-0.24

-1.09-0.65-0.20

0.980.98

0.58

-0.531.75

-0.081.190.081.00

-0.44-0.58-1.14-0.81-0.460.48

0.86-1.02

-0.98-0.04

1.28-0.510.41

-0.79

-1.00

0.44

-0.36

-0.39

-0.27

1.73

0.04

1.56

2.04

-1.19

-0.41

-0.86

0.13

1.12

1.05

1.80

1.31

1.89

-0.95

2.01

1.08-0.650.46

-0.19

-0.21-0.031.08

-0.68

1.151.010.411.30

-0.44

2.48-0.18-0.880.53

1.141.32

-0.46

-0.71-0.87

0.031.342.98

-0.89

-0.35

0.25

1.12

1.13

0.02

0.69

-1.23

1.40

-1.21

2.29

-1.01

-0.31

-0.75

0.80

-0.02

0.26

-0.67

-0.48

-0.05

-0.31

-0.200.090.082.29

-0.14-0.14-0.210.35

-0.14-0.15-0.200.070.03

-0.20-0.09-0.06-0.05-0.24-0.370.05

-0.242.020.05

-0.48-0.18

-0.03

0.38

0.47

-0.44

-0.26

-0.11

3.00

0.10

0.27

0.96

0.03

-0.23

0.03

-0.03

-0.08

0.04

3.00

0.12

0.09

0.19

0.40

-0.210.960.352.330.131.04

-0.430.61

-0.33-0.440.43

-0.01-0.24-0.430.140.160.01

-0.42-0.440.03

-0.352.61

-0.02-0.40-0.44

0.15

0.25

1.11

-0.43

-0.43

-0.36

3.00

-0.05

1.15

1.73

-0.21

-0.32

0.26

-0.26

-0.16

-0.32

3.00

0.18

0.28

0.36

1.02

1.02-1.44-0.660.66

-0.53-0.53-1.02-0.361.00

1.520.42

-0.47-0.50-1.13-1.30-0.330.14

-1.22-0.060.53

-1.270.83

0.750.080.06

1.27

0.80

-1.36

-0.30

-1.25

-0.69

1.88

-1.38

0.77

0.97

-1.88

-1.19

0.58

-1.41

0.11

-0.55

1.96

0.61

0.22

0.91

1.33

-0.68-0.02-0.060.480.520.520.100.680.44

-0.29-1.600.29

-1.53-2.73-0.600.21

-2.490.02

-0.37-2.30-0.33-0.480.25-0.72-0.75

0.60

0.64

0.48

-0.41

-1.14

-2.07

0.48

-2.18

0.48

0.87

-0.56

0.37

-1.45

0.37

-0.17

-1.26

0.72

0.79

0.75

0.56

0.91

-0.610.350.91

0.631.511.51

-1.010.14

-0.93-0.72-0.570.73

-0.560.630.57-1.21-0.06-1.02-0.82-0.95-0.09-3.000.770.241.25

-0.52

-0.70

0.93

-0.26

0.18

-1.96

-0.16

-1.93

-0.62

1.09

0.53

-0.45

1.05

0.06

0.68

0.33

1.20

0.18

-0.43

-0.36

0.61

-0.290.200.730.083.00

2.65-0.41-0.95-0.35-0.44-0.770.32

-0.570.470.24

-0.96

2.320.41

-0.530.47

-0.75-1.051.301.13

1.74

1.32

0.04

-0.19

-0.72

-0.38

-0.81

-1.03

-1.17

-0.98

0.18

0.32

-0.67

0.59

-0.61

0.88

-0.74

0.66

0.65

-0.12

-0.04

-0.42

-0.730.810.85

-0.260.410.41

-0.920.960.18

-0.45-1.40-0.220.53

-2.100.610.77

-0.81-1.87-1.91

-0.020.57

-0.96-0.06-1.36-2.14

1.16

0.92

-0.26

-1.16

-1.48

0.14

0.06

-0.61

-0.26

1.32

-0.77

0.30

0.02

0.30

-1.44

-1.24

0.65

1.12

1.04

1.24

1.36

-0.121.530.59

-0.66

0.63

0.63-0.591.47

-0.03-0.11-0.69

0.070.03

-1.061.13

1.32-0.17-0.54-1.800.080.07

-0.59-0.66-0.54-1.64

1.27

1.57

-0.66

-1.00

-0.79

-0.07

0.32

-0.45

-0.66

-1.53

-0.91

0.45

0.23

0.73

-0.78

-0.88

0.84

1.26

2.85

1.69

1.42

-0.091.370.77-1.710.470.47-0.601.48-0.31-0.81-0.68-0.030.05-1.311.061.36

-0.400.39

-1.63

-0.220.30

-0.62-0.65-0.64-1.56

1.34

1.36

-1.71

-1.15

-0.16

0.03

0.19

-0.34

-1.71

1.52

-0.58

0.36

0.14

0.53

-0.65

-0.83

0.65

0.91

1.71

1.58

1.46

-1.490.661.49-1.080.520.52-0.750.660.25-0.17-1.08-0.020.25-0.911.081.160.00-0.75-2.33

0.000.75

-0.66-0.75-0.41-1.67

1.08

0.66

-1.08

-0.83

-0.58

-0.41

0.22

-0.41

-1.08

1.49

-0.08

0.75

0.08

1.41

-1.00

-0.50

0.72

1.41

2.24

1.08

1.49

-0.82-0.420.110.480.170.17-1.461.150.790.69-0.450.60

-0.38-1.55-1.19-0.14

0.42-1.86-0.88

0.23-0.63-0.050.75

-0.51-0.72

0.72

0.26

-1.15

-0.91

-1.83

-0.79

1.34

-1.80

0.85

1.40

-2.79

-0.26

0.57

-0.29

0.05

-0.11

1.31

1.09

1.06

0.51

1.43

-0.090.941.20

-1.010.19

-0.980.070.24

-1.09-1.10-1.50-0.900.78-1.060.690.18

-0.77-1.81-0.79

0.561.221.77

-0.21-1.59-1.18

0.52

-0.08

-1.48

0.20

-1.33

-0.01

1.87

1.49

-1.78

0.37

0.00

1.28

-0.73

0.26

0.72

-1.51

-0.39

0.00

0.36

0.96

0.72

0.73-0.150.40

-0.04-0.49-1.39-0.20-0.04-1.31-1.56-1.22

0.34-0.13-0.730.12

-1.13-1.08-1.77-0.85

0.42-0.092.640.46

-1.01-0.70

0.15

-1.38

0.04

1.32

-1.02

0.77

2.17

1.16

-0.12

0.45

0.08

0.30

-1.24

0.62

2.36

0.15

0.16

-0.40

0.05

1.00

0.52

-0.500.720.38

-0.641.002.290.071.02

-0.351.350.05

-0.45-0.06-2.270.13

-0.37-0.530.250.10

-0.96-0.150.64

-0.22-0.63-2.06

0.74

0.26

1.56

-1.38

-0.26

-0.05

-0.18

-0.09

1.06

-2.58

0.60

-0.17

-0.05

0.91

-0.66

1.25

-0.68

0.51

0.67

0.15

1.30

-0.080.370.38

-2.240.570.77

-0.010.60

-0.350.55

-0.19-0.660.06

-1.910.55

-0.420.01

-0.04-0.78-0.04-0.18-1.10-0.81-0.84-1.65

0.37

0.79

-1.48

-1.75

0.43

-0.58

0.23

-3.00

0.51

-2.82

0.07

0.34

-0.22

0.31

0.55

0.22

-2.46

0.39

0.42

0.27

0.75

0.31

0.00-0.18-0.05

0.692.23

-0.050.13-0.04-0.320.700.00

0.100.630.86

-0.15

3.001.10

-0.01

1.20-0.39-0.63-0.48-0.20

0.52

0.26

-0.43

0.04

-0.16

0.14

0.26

0.62

-0.93

0.00

-0.09

-0.68

3.00

-0.49

-0.47

-0.34

-0.76

-0.33

0.16

0.10

3.00

0.33

-1.29

0.160.640.25

0.100.100.010.31

-0.13-0.34-1.880.13

-0.43-2.74-0.220.61

-2.36-0.61-0.16-2.590.84

-1.70

0.79-0.96-1.20

0.76

0.73

-0.01

-1.47

0.04

-0.76

0.67

-1.62

-0.04

0.90

0.22

-0.25

-2.06

0.07

-0.46

-0.90

0.49

0.58

0.55

0.82

0.96

-0.670.771.86

-0.26-0.26-0.26-0.040.99

-0.06-0.60-0.98

0.230.40

-1.560.891.86

-1.40-0.65-0.620.040.99

-1.530.85

-0.28-0.64

1.91

0.95

-1.26

-1.20

-0.68

0.10

0.27

-1.16

-0.04

0.88

-0.51

0.09

0.16

0.64

-0.82

-1.05

0.55

1.54

1.16

1.40

2.34

WEF T&TCompet-itiveness Report

Local availability special-ised research & training

Female la-bour force participa-tion rate pp difference total labour force participa-tion rate

Wholesale & retail wmploy-ment demand growth pp difference T&T em-ployment demand growth

Wholesale & retail wmploy-ment demand growth

Availability of qualified labour

Talent en-vironmet

Quality of labour force

Female la-bour force participa-tion rate

Unemploy-ment rate

Extent of staff training

WEF T&TCompet-itiveness Report

INSEAD Global TalentCompet-itiveness Index

INSEAD Global TalentCompet-itiveness Index overall score

T&T direct employ-ment % total economy employ-ment

Govern-ment pri-oritisation of T&T industry

Qualified labour inflow

Ease of hiring foreign labour

Interna-tional migrant stock % total pop-ulation

Net migration % total popula-tion

High level occupa-tion share T&T minus whole economy

Hiring and firing practices

pp change in 15-64% total pop-ulation

50-64% 15-64 popula-tion

15-64% total pop-ulation

15-39% total pop-ulation

15-24% total pop-ulation

Degree of customer orienta-tion

Customer service

Demographics OpennessFlexibility of labour market

Industry relative attractiv-iness

Prioritisation of T&T and existing T&T skills base

Recruitment competition

Spare labour market capacity and female participation

TrainingQuality of general human resources

INSEAD Global TalentCompet-itiveness Index

WTTC/Oxford Econom-ics AnnualEconomic Impact Research

WEF T&TCompet-itiveness Report

Heid-rick & Struggles Global Talent Index

Heid-rick & Struggles Global Talent Index overall score

Heid-rick & Struggles Global Talent Index

Heid-rick & Struggles Global Talent Index

ILOILOILOUNUNUNUNUNUN

2013 2013 2013 2013 2013 2013 2013 20132015 2015 20152014 20142014 2014 2014 2014 2014-2024

2008-2012

OECD Oxford Economics Global Talent

Oxford Economics Global Talent

Oxford Economics Global Talent

WEF T&TCompet-itiveness Report

WEF T&TCompet-itiveness Report

WEF T&TCompet-itiveness Report

WEF T&TCompet-itiveness Report

2014-2024

2014-2024

Latest available

Latest available

2014 2013 2013

Travel & Tourism: Talent enabling environment pillar variable z scores

Page 32: Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 201562 63

Source: Oxford Economics, WTTC1 = best rank; 46 = worst rank

Sensitivity analysis 1: Non-equal pillar weights• 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.

Annex D

Talent enabling environment sensitivity analysis

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.

• Gulf Cooperation Council (GCC) larger weight for openness and labour marketflexibility: 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.

• 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

Core: Equal 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

10.0%Customer service 6.7% 3.8% 12.5%

10.0%Demographics 15.0% 3.8% 12.5%

10.0%Flexibility of labour market 6.7% 20.0% 0.0%

10.0%Industry relative attactiveness 15.0% 3.8% 12.5%

10.0%Openness 15.0% 50.0% 0.0%

10.0%Prioritisation of T&T and existing T&T skill base 6.7% 3.8% 12.5%

10.0%Quality of human resources 6.7% 3.8% 12.5%

10.0%Recruitment competition 15.0% 3.8% 12.5%

10.0%Spare labour market capacity and female participation 6.7% 3.8% 12.5%

10.0%Training 6.7% 3.8% 12.5%

100.0% 100.0%100.0% 100.0%Sum

Thailand

Poland

Austria

France

Kuwait

US

Peru

Canada

Norway

UK

Australia

South Africa

Colombia

Bermuda

Oman

Singapore

Costa Rica

Malaysia

Malaysia

Morocco

Sweden

Switzerland

Saudi Arabia

China

China

Indonesia

Russia

Egypt

Chile

Turkey

Bahrain

Brazil

Mexico

France

Germany

UAE UAE

1

Spain

South Korea

Taiwan

Qatar Qatar

Czech Republic

Greece

Italy

India

Argentina

Philippines

Netherlands

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

3233

34

35

36

37

38

39

40

41

42

43

44

45

46

Thailand

Japan

US

Barbados

Kuwait

Singapore

Peru

Austria

Norway

UK

Barbados

Canada

South Africa

Spain

Bermuda

Oman

Argentina

Morocco

Sweden

Costa Rica

Switzerland

Saudi Arabia

Japan

Indonesia

Russia

Egypt

Chile

Turkey

Bahrain

Brazil

Mexico

Colombia

Germany

1

Australia

South Korea

Taiwan

Czech Republic

Greece

Italy

India

Argentina

Philippines

Netherlands

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

3334

35

36

37

38

39

40

41

42

43

44

45

46

0

0

0

1

-2

5

4

0

7

7

-3

-6

4

5

19

9

-9

17

7

-8

-6

-6

-7

9

-11

-9

-7

-9

11

-14

-3

-8

-3

2

4

4

4

-4

-9

1

1

4

1

-2

0

0

Travel & Tourism: Talent enabling environmental overall ranks

Core: Equal weights Sensivity analysis 1:Non-equal weights

Rankchange

Page 33: Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 201564 65

Source: Oxford Economics, WTTC1 = best rank; 46 = worst rank

Sensitivity analysis 3: Smaller weight for openness (0%) and labour market flexibility (0%) pillars

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

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.

Source: Oxford Economics, WTTC1 = best rank; 46 = worst rank

UAE

Poland

Austria

India

Kuwait

US

Peru

Canada

Norway

UK

Australia

Barbados

Colombia

Bermuda

Oman

Singapore

South Africa

Sweden

Malaysia

Morocco

Sweden

Switzerland

Singapore

Peru

China

Saudi Arabia

Russia

Chile

Chile

Turkey

Bermuda

South Korea

Mexico

France

Germany

UAE Austria

1

Spain

South Korea

Taiwan

Qatar Qatar

Czech Republic

Greece

Italy

Czech Republic

Phillippines

Spain

Netherlands

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

Thailand

China

US

Barbados

UK

Malaysia

Japan

Thailand

Turkey

Australia

Oman

Morocco

South Africa

Italy

France

Canada

Argentina

Netherlands

Costa Rica

Costa Rica

Switzerland

Saudi Arabia

Japan

Indonesia

Russia

Egypt

Norway

Mexico

Bahrain

Brazil

Bahrain

Poland

Colombia

1

Germany

Greece

Brazil

Indonesia

Kuwait

Argentina

India

Egypt

Philippines

Taiwan

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

0

12

4

4

0

3

-5

0

-3

20

-1

5

9

-16

-6

-11

-6

-9

-1

-3

0

2

2

-1

-2

-5

-1

-1

-3

5

-3

4

3

-1

4

4

3

2

-5

0

Travel & Tourism: Talent enabling environmental overall ranksCore: Equal weights Sensivity analysis 3:

GCC smaller weight openness and labour market flexibility

Rankchange

6

-8

3

6

5

0

Singapore

Poland

Austria

Brazil

Kuwait

US

Peru

Canada

Norway

UK

Australia

Kuwait

Colombia

Bermuda

Oman

Singapore

Malaysia

Saudi Arabia

Malaysia

Morocco

Sweden

Switzerland

US

Australia

China

Chile

Russia

Spain

Chile

Turkey

Canada

France

Mexico

France

Germany

UAE Qatar

1

Spain

South Korea

Taiwan

Qatar UAE

Czech Republic

Greece

Italy

Poland

Norway

Mexico

Netherlands

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

Thailand

Colombia

UK

Barbados

Thailand

Bahrain

Barbados

Austria

China

Bermuda

Morocco

South Africa

South Africa

Indonesia

Turkey

Netherlands

Argentina

Costa Rica

Sweden

Costa Rica

Switzerland

Saudi Arabia

Japan

Indonesia

Russia

Egypt

Peru

Phillippines

Bahrain

Brazil

Oman

Argentina

Egypt

1

South Korea

Czech Republic

India

ItalyGermany

Greece

India

Japan

Philippines

Taiwan

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

4243

44

45

46

0

-2

12

1

0

0

-3

-3

-3

20

11

7

5

-8

6

-14

-5

-4

3

3

2

2

-3

-1

-5

-1

-1

-1

-1

-3

-5

-1

2

3

1

-1

-2

-3

0

0

Travel & Tourism: Talent enabling environmental overall ranksCore: Equal weights Sensivity analysis 2:

weight openness and labour market flexibility

Rankchange

-5

-3

-5

2

5

-2

Page 34: Global Talent Trends and Issues for the Travel & Tourism Sector

Global Talent Trends and Issues for the Travel & Tourism Sector Final Report - January 201566 67

The Harlequin Building 65 Southwark Street London SE1 0HR - United Kingdom

Tel +44 (0) 207 481 8007Fax +44 (0) 207 488 1008Email [email protected]

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Global Talent Trends and Issues for the Travel & Tourism Sector68


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