This paper will describe the service and competitive advantage of HR outsourcing. Specifically, for the hospitality industry, HR outsourcing allows the hotels to maintain the required number of employers and increase work efficiency.
Product
The service discussed in this analysis is the HR outsourcing specifically designed to target the needs of Hotel Jacksonville University Inn. HR outsourcing will deliver the services of hospitality, payroll, and recruiting services. According to SHRM (n.d.) HR outsourcing a contract or an agreement between two particles, the third party and the employers, where the latter transfers the management and responsibility for the human resources function to this third-party service provider. The primary goal of such agreements is the enhancement of the employer’s work efficiency.
Target Market Customer Needs
The customer and the target market operate in the hospitality industry and provides accommodation services to travelers. The Hotel Jacksonville University Inn requires employees to work at the front desk, the cleaning services personnel, and maintenance personnel to facilitate the operations of the Inn. Moreover, the hospitality industry is characterized by seasonality, and therefore, there are timeframes during which the hotel requires more employees, while during the low season, the number of workers will be reduced. The outsourcing of the HR services addresses the cost and resources issue for the Inn because an outsourcing company has a pool of candidates skilled to work in the hospitality field and can find the required number of workers. As opposed to not using the outsourcing services, the hotel would have to maintain their HR personnel who would spend time advertising positions and interviewing candidates. Thus, this service addresses the customer’s needs by allowing the hotel to increase their productivity.
Segmentation Strategies
Marketing segmentation allows one to predict where the service is in demand based on geographic, demographic, behavioral, and psychological characteristics. The service of HR outsourcing allows hotel owners to avoid the necessity for searching for new personnel, which is important considering that most hotels have seasonal demand and adjust the number of employees based on the number of guests who arrive. Moreover, the payroll services are also expensive to maintain in the house because the hotel management has to pay at least one professional who will be in charge of managing the payments.
While large hotel chains handle the HR and outsourcing practices in their central offices, which allows them to save costs and maintain high efficiency of work, the smaller and mid-sized hotels cannot practice this approach. Hence, they have two options, either have these operations in-house or work in collaboration with an outsourcing firm. This business market is interested in reducing the financial burden associated with recruiting and payroll management, which will also affect the efficiency of their operations. Additionally, these businesses want to ensure that they can hire more employees during the high season as temporary workers.
The small single-location hotels and inns may be more interested in this service due to the lower profit margins and inability to manage personnel across different locations, as opposed to middle-sized hotel chains. The latter benefit from having several locations, which allows them to negotiate better deals with suppliers and shift personnel from one location to another depending on their demand. Hence, their profit margins are higher, and the efficiency of operations is better when compared to the small hotels with only one location.
Niche Marketing
The specific niche for this HR outsourcing service is hotels located near Universities or other educational institutions. These are the small hotels that have either one location and middle-size chains that do not have centralized HR and payroll management.
Gap Analysis
Hampton Inn Suites is a part of the chain of hotels by Hilton. Hence, the HR management and payroll services are managed by the group, which means that the efficiency of this hotel is higher because their location in Hampton does not have to spend resources on the hiring and personnel development operations. The gap here is the efficiency and productivity that Hamptons have since, as opposed to the Inn, their HR operations are already outsourced to the owners of the hotel chain. Hence, this gap falls into the category of “gaps, costs, and performance” (“Gap analysis,” n.d.).
Sleep Inn Oxford is a hotel located in Alabama that offers its visitors accommodation, free breakfast, parking, and a seasonal pool at the price of $102 per night (“Sleep Inn Oxford Anniston I-20,” n.d.). This hotel does not use outsourcing services, and all of the personnel is employed directly by the management. Hence, there is a gap in performance because this hotel needs to manage the human resources and payroll in-house, which requires hiring an HR specialist and a payroll professional. This hotel also falls into the category of “gaps, costs, and performance” since the issue in question is the efficiency of operations and the effective use of financing.
Benchmarking
Benchmarking will be based on the analysis of the competitors in the niche of HR Outsourcing for the hospitality industry. The core benchmark would be to ensure that all of the frontline personnel and payroll professionals are outsourced to the service provider. The Inn can continue hiring its managers and executive personnel. Next, the profit margins of the hotel chains should be another benchmark because it will serve as proof of the efficiency that HR outsourcing provides when the margins increase once the hotel signs an outsourcing contract.
Competitive Advantage
The main competitive advantage of the offered service is the increased efficiency that allows small hotels to compete with the larger chains and offer their clients better experiences. This service reduces the financial expenditures and ensures that the hotel consistently has the number of workers that they need to support the operations. Hence, the costs that they have saved can be used to invest in renovations or the provision of additional services to the visitors.
The main competitive advantage that this HR outsourcing service will offer is the high quality and training of the personnel. Since this company is specifically targeting the hospitality industry, it can invest in the training and development of the candidates to ensure that they understand the specifics of this industry and work in it effectively. Again, this allows the Inn to save costs and improve its efficiency as the training and development element is outsourced and, therefore, provides its visitors with an even better experience.
Conclusion
In summary, this paper is the summary of the case study for the HR outsourcing service that targets human resources management and payroll services. The competitive advantage is the increased work productivity and provision of workers trained to be employed in the hospitality industry.
References
Gap analysis. (n.d.).
SHRM. (n.d.). Outsourcing the HR function. Web.
Sleep Inn Oxford Anniston I-20. (n.d.). Web.