A series of ambitious economic reforms aimed at deregulating the country and stimulating foreign investment has moved India firmly into the front ranks of rapidly growing Asia Pacific region. Today, India is one of the most exciting emerging markets in the world. Skilled managerial and technical manpower that match the best available in the world and an educated middle class whose size exceeds the population of the USA or the European Union, provide India with a distinct cutting edge in global competition. This increasing transformation means a more complex economy that demands more sophisticated talent, with global acumen, multi-cultural fluency, technological literacy, entrepreneurial skills and the ability to manage increasingly 'delayered' organizations.

In today's competitive market environment it is widely known that organizations compete head-to-head with rival firms for control of customers, market share and revenue to achieve a leadership position in their chosen mode of operations. With Indian industry all set for the next big leap, the gaps in manpower demand and supply are beginning to show. Poaching of priced talent is rampant and companies across the board from media to telecom are being bled white. Be it the nascent biotech industry or other promising sectors, compelling business pressures and demanding deadlines are facilitating this 'guerrilla warfare' by a subtle name - poaching. The Indian hospitality industry is no exception and is also witnessing a large exodus of employees to other industries that find high performing hotel employees a 'cherry pick'!

Here's our summary evaluation of the issue at hand...

Today the coming together of different corporate psychologies in a competitive business environment makes a hotel professional move from one hotel to another and on a larger canvas makes him move out of the hotel industry to other sectors. The reasons could be many…a different work challenge, the expectation of faster career growth, aspirations for better work-life balance, a hospitality career being a poor fit with one's personality, or a combination of some of these factors. Last but not the least, the temptation of better pay is, more often than not, a prime driver. Research shows that money is like Prozac. Neither necessarily makes you happy, however assists in preventing different forms of unhappiness --in the case of the former, less financial anxiety, affording better housing, better and bigger car, good schooling for the children, metro locations and softer loans. To summarize, it’s a fine mix of employee aspirations, the mirage of other sectors and the finesse of an executive search firm that leads to poaching from hotels!

So who are the 'poachers'? A growing list of industries and sectors, that are witnessing hectic activity, expansions and are passing through a boom. A brief sectoral analysis is presented below.

Retail - Market liberalization and an increasingly assertive metropolitan consumer population is now sowing the seeds of a prolonged retail transformation in India. The retail boom witnessed in India over the last 18-24 months has started bringing in bigger Indian and multinational operators on to the Indian retail scene. International brands such as Wal-Mart, Tesco and Carrefour are eyeing India as their next expansion destination. According to a recent study undertaken by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), organized retail is expected to register an annual growth of 6.0% over the next five years and touch total business of US$17bn against its current business volume of US$6bn. According to India Retail Report 2005 conducted by KSA Technopak, India’s distinct advantage is that it is amongst the least saturated of all major global markets in terms of penetration of modern retailing formats. Amusement park, convention centre, serviced apartments and hotel are some mixed-use concepts that are being combined with retail to present a complete product mix. The opening up of the retail sector in India throws major challenges to the hotels for a majority of retail functions are identical and it enables the retail players to go higher in the hierarchy of poaching, targeting mid to top level executives across key functional areas.

Aviation – International and domestic travel in India is growing by leaps and bounds. It has been estimated that the aviation sector in India is likely to witness a 20.0% YOY growth over the next five years in passenger traffic from the existing almost 60mn. The entry of several low cost airlines in the domestic market, the Open Sky Policy that provides an opportunity for domestic carriers to fly to international destinations and keen focus by the central government on airport infrastructure development are key growth drivers for the sector. In the aviation sector today, apart from trained pilots, engineers and operational staff, there is also a great need for trained staff that can manage key functions such as reservations, yield management, guest relations, sales and marketing. Attractive perks and role enhancement make hotel employees a soft target for poaching since they come with specific expertise, are highly presentable, well spoken and are trained in customer service and guest interactions.

Business Process Outsourcing (BPO) - According to NASSCOM, the projected revenue of the BPO industry in India is expected to touch US$12bn in 2006. The sector hired an average of 400 people on every working day of the year in 2004/05. With annual growth projected at 11.0%, the sector is expected to employ over 1.2 million people by 2008. Various BPOs in India have enhanced their service portfolio by handling knowledge-based activities like budgeting or resource planning, giving their customers access to a complete menu of end-to-end processes in functional areas like HR, finance and customer care growth. With their economic success BPOs are now moving up the value chain and many such outfits are being transformed into Knowledge Process Outsourcing companies or KPOs. The global KPO sector is expected to grow at a CAGR of over 45% to reach US$17 billion by 2010. India, with its highly qualified professionals well versed with the English language, is emerging as the location of choice for a wide variety of KPO work.

BPO industry is on a spree to hire hotel industry graduates. The hospitality industry in India today employs a large number of young executives in different areas of hotel operations. These employees are well trained in different aspects of guest service and interaction, have excellent service orientation and command over English. There is also demand for good chefs, stewards and housekeepers to undertake facilities management related functions. Flexible work schedules, an informal work environment and good pay are some aspects that facilitate the movement of employees from hotels to the BPO industry.

Real Estate – The commercial and residential real estate industry in India is moving closer to the people. No longer a purview of larger-than-life egos and insatiable developers, the real estate industry is more focused on the wants and needs of the consumer. The industry is emphasizing more on branding, and on the marketing of buildings as products that can provide ‘experiences’. The real estate industry has been successful in attracting quite a lot of hotel professionals since they are assumed to excel in selling ‘intangibles’ and provide that unique experience to its demanding customers. Stories of poaching are also rife in emerging sectors like media, finance and investment banking, and insurance.

HVS conducted a survey in order to analyze the quantum of threat with the emergence of the above new sectors. We researched on two specific variables. The first variable was defined as the sectors that present the highest threat of poaching and the second was defined as the functional areas in a hotel that are vulnerable to being poached by these sectors. These functional areas were broadly classified into mid-level functions and top-level functions. Each function was further sub classified based on job responsibility and specific skill sets. Points were assigned by sector for each job responsibility. The points were assigned on a continuum of 1 to 6, where 6 represents the highest threat of poaching. The sum of points for each variable was ranked and the assigned rank was used as a benchmark to evaluate the risk.

Exhibit 1 presents our findings.

Sectors
Functional Areas	Aviation	BPO	Retail/ Food Services	Real Estate	Others	Total	Rank
Mid Level
Front Line	4.71	5.12	4.29	2.24	2.90	19.25	1
Operational	3.76	4.12	4.41	2.24	2.38	16.91	3
Technical	1.94	2.12	2.41	2.82	2.79	12.09	4
Sales & Marketing	4.41	3.24	3.76	3.00	2.69	17.10	2
Senior Level
Development	2.35	3.06	4.00	4.41	2.38	16.20	3
Strategic Planning	2.71	2.41	3.06	3.06	2.07	13.30	5
Finance	2.82	2.94	3.24	3.29	3.24	15.54	4
HR, Training & Development	4.18	4.76	4.29	2.00	2.24	17.48	1
Sales & Marketing	3.94	3.00	3.59	3.53	2.62	16.68	2
Total	30.82	30.76	33.06	26.59	23.31
Rank	2	3	1	4	5

Our research indicates that the retail and food services industry presents the highest threat of poaching from the hospitality industry followed closely by aviation and BPO. In mid-level functional areas the front line staff faces the highest threat of being poached followed by sales and marketing and operational staff. In senior level functional areas, HR, Training & Development executives present the highest threat of being poached followed by executives responsible for sales and marketing related functions.

In reality, our business truth is simple; the quality of your relationships protects you from competitive as well as non-competitive poaching. Changing times call for dynamic and ever emerging strategies. The practices of innovative management techniques and invigorating HR strategies have resulted in major organizational transformations. Individual improvements and lifetime commitments from employees are possible, it’s just the question of how sincere the efforts of the organization are and how involved are the people who matter when it comes to decision making and formulation of strategies. We need to revise our selection and hiring processes to identify candidates with right aptitude and skill sets for hotel as a profession and its demanding pressures. The training culture should also be customized so as to reflect values of loyalty and commitment in an individual towards the organization and empower him to take on the challenges of working under immense pressure. Today, we need leaders who are capable of performance management- creating a system of setting attainable goals, providing feedback and mentoring, reviewing progress and creating developmental plans and a competitive compensation structure. HVS through its various surveys has also observed that people who had left hotels during the boom in the IT industry are coming back to hotels, probably because of increased pressure in the IT industry or rather maybe because their passion for hotels is insatiable!

Probably the hotel industry should focus its energies in creating and retaining trained manpower rather than joining the poaching rat race.