Financial Times

Hotel staff - the choice between Lankans and expats
Members of the audience at the Hotels Association's recent AGM who listened to the Chairman, Tourist Board, Udaya Nanayakkara, express the view that hotels could hire expatriate staff in the context of a shortage of skills, evidently went away with the impression that a new dispensation concerning the hiring of foreign staff was in the offing - probably with a shift towards more liberalization. Harking back to the time when liberal economics came to rule many aspects of business, one realises that procedures have undergone progressive liberalization not only in relation to the approval of foreign direct investment but also in employment of expatriates.

From the late 1970s up to the 80s , the quantum of foreign investment in projects was limited to a maximum of 49 percent except in cases where the capital required was so large that it was hard to be procured locally. Any foreign entrepreneur had to have a local collaborator who would hold a majority of equity in a joint venture, except where there was a need for very high capital input. Project approvals included a stipulation that the employment of expatriates would be allowed in certain identified key positions and for a limited period during which local staff had to be trained to take over.

Projects with 100 percent foreign capital are now approved and ventures begun exclusively with local capital are also seeking - and getting - the right to employ foreign staff. For BOI projects, there is a requirement of a minimum of US $ 50,000 in investment funds.

A lot revolves around the residence visa, issued by the Department of Immigration on the recommendation of the line ministry, which allows expatriates to live and work in the country. In the case of the hotel industry, the Tourism Ministry would depend on the Tourist Board to scrutinise applications and determine whether each request is justified. The onus is on the Trade Standards Officers (TSOs) to analyse the situation relating to the availability of local expertise that might fit into the positions proposed to be filled with foreign staff. The possible leakage of funds abroad from the payment of a higher salary and the expatriate's suitability for the job are some of the other factors that they look into. The employer must therefore submit the expatriate's bio-data and the contract proposed to be signed.

Family accommodation is provided to most overseas recruits. This is looked upon by some as a positive aspect because the presence of the family implies that a considerable part of the expatriates' earnings would be spent in the host country.

Hotels are always required to submit training and understudy programmes when recruiting foreign staff but they are frequently not forthcoming. Instead, requests for extensions of visa for those previously approved are invariably made. Government sources also say that some hotels have resorted to inventing designations to justify adding foreign staff, thus damaging their own credibility. An example is "Consultant, F & B Development and Operations", when there is already an approved F & B Director. One responsibility of this Consultant is claimed to be: "Development of the F & B concept"!

A proposal is being made to require hotels to advertise in local Sinhala and Tamil newspapers all vacancies that arise in their establishments. Hotels may then be required to furnish documentary proof of their inability to recruit locally before a position is offered to an expatriate.

Government sources say that visas for recruits to restaurants serving ethnic food or speciality foods have been granted with little restriction. Important positions like the General Manager, Resident Manager and Chef were allowed to be filled by expatriates on merit. Travel agents and tour operators have also been able to hire expatriate Resident Representatives and Tour Leaders.

The President of the Hotels Association, Malin Hapugoda, welcomed the employment of expatriates as long as it resulted in an upgrading of the quality of the hotels. If, however, it leads to the hotels exploiting the concession in order to overload the plant with foreign staff, the Association will not be in agreement. Has the Hotel School not produced all or most of the skills required by the industry? Hapugoda's view is that the quality of the intake of the school has dropped over the years owing to the lack of interest among school leavers in careers in hospitality.

The reason for this attitude was the slackness in the industry and the lower earning capacity of its staff in the recent past owing to the revolt in the north. Additional Secretary, Tourism Ministry, George Michael, is appreciative of the difficulties of hoteliers who have invested considerable capital in this country. Many are reluctant to incur further costs in expensive training when most beneficiaries of such training are on the look out for more lucrative jobs abroad. "Our work culture must change," he says.

The Sunday Times FT specialist writer on travel and tourism, Pani Seneviratne, examines the pros and cons of employing foreign staff in local hotels.

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