Industry Update
Opinion Article15 August 2019

Seatrade Europe and Thomas Mielke In Conversation

Sustainability, Recruitment And Leadership Development In The Cruise Industry

By Thomas Mielke, Managing Director, AETHOS Consulting Group London

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Seatrade Europe recently spoke to Thomas Mielke, London-based Managing Director of AETHOS Consulting Group. Mielke will be moderating a panel discussion at the upcoming cruise conference to be held at the Hamburg Messe Hallen September 11-13, 2019. Here is what he had to say on some of the topics which will be picked up during the session entitled "Sustainability with a Twist - How to Future-Proof the Cruise Sector from a Recruitment, Talent Pipeline and Business Leadership Perspective".

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What progress do you think the industry has made on sustainability in terms of recruitment and leadership development over the last 5 years?

"People are the product if the hospitality industry" - this most certainly holds true for the cruise sector. Without the continuity of the talent bench-strength cruise companies would be unable to execute on their ambitious growth plans. As the fight for talent has continued and intensified throughout the last few years, cruise companies have started to embrace an approach which can be coined as "future-casting" - in other words, rather than focusing on proven track record and/or domain knowledge, they have moved away from assessing task competencies. This shift in their recruitment efforts has enabled them to identify people with potential who are adaptable, inquisitive and knowledge-thirsty and who perform well in high-pressure work environments such as the cruise industry.

Yet, adapting one's recruitment profile is only part of the equation. Cruise companies have equally focused on improving their in-house talent management and succession planning efforts - in other words, instead of relying too heavily on fresh recruits, they have gotten better at identifying whom they already have on their payroll and what their specific development capabilities are. However, there is still a long-way to go for cruise companies to fully deploy the full potential of their in-house talent - too many organizations are unaware of who is ready for the next step up and/or who could be cross-promoted into a different division. To some extent, the problem in leadership development is intensified as international mobility, somewhat counterintuitively, remains relatively low within the industry. At the same time, career movements from ship-based positions to land-side continue to be the exception to the rule. Partially, this is because they attract different characters and personalities based on the very nature of the different jobs and functions. However, it also ties back to a more 'systemic' issue that speaks to business and human resources strategies which are not fully aligned with one another. This is by no means deliberate - often times, it is merely the result of leadership being pulled into different directions, forced to take quick ad-hoc decisions and/or an overstretched human resources department which has put in place the right strategies and tactics, but which is ultimately forced to 'put out fires' elsewhere or divert its attention. Leadership development is thus much more opportunistic and organic as opposed to structured and planned.

In summary, awareness has risen for the 'problem areas' and actions have been taken to rectify those. The shift to assessing contextual performance as opposed to domain knowledge has been the first step. Improving and investing in internal talent management and succession programs - targeted and fine-tuned for three rather distinct cultures (ship-side, land-side [non-corporate] and land-side [corporate]) - the second. Future obstacles to overcome continue to be topics centred around international mobility, cross-promotions and the fostering of a company culture which better aligns business strategies with a firm's HR programs.

What is the biggest challenge for businesses in the cruise industry when it comes to sourcing and recruiting? How do you feel this will impact the future of the industry?

The Cruise Lines International Association (CLIA) predicts, based on its membership data, that as of this summer there will be almost 275 cruise ships in operation - providing more than 1.1 million staff with employment opportunities across the globe. And the order books of the shipyards are full for years to come… In other word, the pressure keeps on rising for corporate human resources departments to develop, sustain and safeguard a steady talent pool of future industry leaders. The challenge that industry leaders are faces with is thus both an internal and self-imposed one as well as an external and enforced upon 'issue' by the various industry stakeholders.

Companies have set themselves high growth targets to capture untapped business opportunities, new target markets and customer segments as well as underdeveloped destinations. Shareholders consequently seek ever hired returns. All this means that leadership teams are putting themselves under enormous pressure to deliver on those targets - and this necessitates securing a very large number of staff to be able to deliver on those business strategies. Whilst for many corporate land-side positions cruise companies are quite open and happy to recruit from other industry sectors - in particular in branding, marketing, sales and, for example, finance - securing ship-side talent is arguable the much more difficult task. Virgin Voyages, for example, recently announced that is launching a six months recruitment road show across 18 countries to find crew members. In which other industry do business executives have to greenlight such initiatives just to secure their employee base? In line with that, it is worthwhile to reflect that, in consequence, many of the new recruits are coming from culturally very diverse backgrounds. Ensuring that such a multi-cultural workforce is aligned, and is buying into a common vision, is not an easy task. Some might argue that it also brings on board challenges as it relates to managing one of the most important topics the industry is facing - that of 'sustainability'. In a lot of the regions from which the cruise industry is recruiting from, sustainability has not necessarily risen to the top of the agenda when it comes to discussing the workplace and/or the business environment. A lot of the times, other more basic needs and requirements have to be met first. The cruise industry is thus in a unique position to promote and educate staff from all over the world on sustainability - but conveying the importance of the message whilst monetary, health or other more 'basic' concerns are front-of-mind is not an easy feat. Ultimately, for many employees, however much they care about sustainability, pragmatism will trump principles when faced with actual career decisions.

Arguably, there are also external forces which the industry is grappling with - one of them is tied to said topic of sustainability. Increasingly, customers, the general public and employees alike are putting more emphasis and the issue and there are studies, for example, on the positive correlation between a firm's Corporate Social Performance (CSP) and its reputation and attractiveness as an employer. Cruise Information Classification: General companies need to deliver on those high expectations. A lot of progress has been made - from fuel efficiencies to waste reduction and sustainable food sourcing to more inclusive excursions which positively impact host communities. However, the sector is - partially based on the aggressive growth targets - impatient and best practices can easily, however unintentional, fall to the wayside. It is thus a mammoth task for leaders and the HR teams to instil and engrain the importance of those sustainable best practices in its workforce. This might mean aligning reward and bonus programs to specific targets and/or a general performance program which is properly aligned with an organizations sustainability strategy and tactics. This might also mean that promoting sustainable credential whilst offering shore-excursions which include, for example, heli-skiing, might not be sending a consistent message.

Any further comments?

When talking about leadership challenges it is also worthwhile to reflect upon the general state of the industry and the 'hot topics'. Experts currently talk, for example, a lot about the concept of VUCA; in other words those situations and/or business environments where (1) volatility, (2) uncertainty, (3) complexity and/or (4) ambiguity might complicate management and/or the decision making process.

The hospitality, travel and tourism sector can certainly be described as a fast-paced business environment and one where decisions taken might have immediate and/or significant impacts. It is no doubt a high-risk environment - consequently, one of the biggest challenges cruise companies are faced with is securing employees and leaders with the right skill set, character traits and grit to survive in such an environment. Going forward, cruise executives and the human resources department alike are thus likely to apply the VUCA framework to probe their teams, staff members and employees on those scenarios with a view to assess, or foster, behaviours and skills which help to efficiently and effectively operate within such a business context.

* As published by Seatrade Europe in Summer 2019.

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Thomas Mielke

Thomas Mielke is a founding member of AETHOS Consulting Group, and has a track record in successfully placing senior executives at leading hospitality companies across the EMEA region. He is an AESC certified consultant and is working together with travel wholesalers, real estate developments firms, investment companies and sovereign wealth funds as well as leading restaurant brands in identifying key talent and has joined forces with clients in establishing compensation schemes as well as organizational structures and workflows.

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