Recent weeks have seen a number of high-profile retirements and senior executive moves in the hospitality sector.
Notable international retirements include David Kong, leaving Best Western group after 20 years as president and CEO; and Qi Ji, CEO and chairman of fast growing Chinese group Huazhu, who will step down as CEO.
In the UK, Nick Northam, executive vice president international at Interstate is retiring, after a career of more than 40 years in the sector. His experience included more than two decades with Whitbread managing Marriott hotels in the UK, and a decade with Realstar Hotels. And the reigns of hotel group Dalata were recently passed to new CEO Dermot Crowley, with the group’s longtime leader Pat McCann announcing his retirement.
The sector has also recently lost industry stalwart Anders Nissen, who led hotel owner Pandox for many years, who died earlier this summer while still in post.
In contrast with the well-publicised shortages of hospitality staff at more junior levels – Travelodge this week is looking to fill 750 positions across the UK – senior executives largely avoided layoffs and furlough, as they stayed on to keep businesses afloat, and then plan for their recovery. But according to a recent survey conducted by Deloitte and consultancy LifeWorks, the stress of leading a business through the pandemic has taken its toll. Of senior managers surveyed, 51% were considering leaving, retiring or shifting to a less pressured role; overall, 26% saw resignation as an option they were deliberating over.
“Senior leaders have gone through a period of feeling exponential pressure to deliver, while dealing with personal disruption from the pandemic and extraordinary business disruption,” said Paula Allen, global leader and senior vice president, research and total wellbeing, LifeWorks. “We anticipate seeing a risk of turnover among senior leaders. This is an issue we must immediately address, as senior leaders play a critical role for organisations.”
Brian Krehbiel, an interim leadership expert at consultant WittKieffer covering the healthcare sector, noted in a recent blog that there are some fundamental demographics at play: “Let’s not forget that we’re in the middle of the bell curve of baby boomers retiring. This trend has resulted in a large segment of executives calling it quits in recent years.”
There are also financial issues, while the pandemic has certainly pushed many to reflect on their reasons for continuing to work: “With the stock market riding high and retirement accounts flush, it is simply the right time for many leaders to step away. Covid-19, of course, exacerbates the issue. It is pushing people to retire who, pre-pandemic, might have stuck it out for another two, five or 10 years.”
Lesley Reynolds, managing director at executive search specialist PSD, says the hospitality sector is facing “the most hideous staffing issues”, with shortages at all levels that are forcing some hotels to run at restricted occupancy – effectively turning away business.
“You needed really experienced heads to lead people through a crisis, and there was a responsibility for some to carry on.” Now that the worst is over, she says there is no surprise some are rethinking their next few years. “There is no question it has been absolutely exhausting for those leading – some are now thinking ‘Do I have the petrol in the tank to carry on and deliver?’”
With the worst of the pandemic in the rear view mirror, Reynolds says boards are now taking a harder look at how their senior teams performed: “There are winners and losers – people who had a good pandemic, if you can believe that.” But for those who made bad calls, she says, “patience is running out – that’s a pattern we have seen many times before.”
The challenge for those seeking new faaces at the top, says Reynolds, is that “it has never been so difficult to find high quality talent.” The situation is exacerbated by retirements, and by some companies paying handsomely to retain talent, if one of their top team gets a better offer elsewhere.
Reynolds says now is also not seen as the time to try a left field approach. “I have championed bringing people in from other sectors, but at the moment, the learning curve is just too big. You need people that know where the levers are, and what they do.”
HA Perspective [by Chris Bown]: In some ways, this feels like the changing of the guard. But, as ever, if a company has been well led, then there should be plenty of good talent to follow on.
As Reynolds notes, having a seasoned performer at the head of an organisation has been vital during the pandemic. While nothing quite compares, the experience of surviving previous downturns has meant that those silver hairs have been able to provide invaluable guidance during covid. Now, it’s high time to let the next generation take the reins – just so long as they aren’t left to repeat any mistakes of previous cyclical upturns.
This time has, of course, also been different in that covid-19 was daily front of mind, putting human frailty and individual health front of mind, and reminding many a high flyer that their life could be taken away in a trice.
And enforced working from home reminded many that spending hours in the office may not be the best way to lead a successful business. The attitudinal change towards flexible working, and working from home has yet to completely work through. Many legacy leaders loved to measure involvement by presence; the pandemic has forced a change in attitude, and that could bode well for those longer in years, who wish to retire gently – perhaps shifting lifestyle while still remaining in touch with the business they previously led.