It’s February, it’s miserable and, across the country, people are dreaming of their next holiday – white beaches, cocktails, blue skies and sunshine (remember them?). The travel industry might have been hit hard by the recession, with cash-strapped Brits opting for ‘staycations’ over foreign trips, but the latest financial results of FTSE 100 company TUI Travel suggest that is changing.
TUI’s operating profit reached a record £589 million in 2013, up 20% on 2012. A 10% fall in pre-tax profit notwithstanding, it was good news for chief executive Peter Long, whose basic salary has not increased since 2008. Last year, his total pay was £10.1 million – 50% more than he received in 2012.
Against that backdrop of positivity, it’s no surprise that TUI’s group HR director Jacky Simmonds says this is “an exciting time to be working in the travel industry”. Having been in the industry since 2000, holding various senior roles at First Choice before joining its parent company, she is something of an expert on the business of holidays.
“The sector is a healthy one,” she says. But, equally, this is no time to sit back and relax on the sun-lounger. “The industry is affected so heavily by external influences, you can never stop trying to change and adapt,” she adds.
A changing industry
Thanks to the global rise of the middle classes, travel and tourism are big business. According to the United Nations World Tourism Organisation, the industry accounts for 9% of global GDP and 6% of global exports. What’s more, it continues to be one of the world’s fastest-growing sectors, and accounts for one in 11 jobs globally. No wonder Simmonds, who was ranked 20th in HR magazine’s 2013 Most Influential list, has a smile on her face. However, with growth comes intense competition. “Tourism is growing worldwide, but there are more competitors than ever before,” she says. “Organisations have to be agile.”
Then there is the march of technology, putting more and more power in the hands of the consumer. “Customer power has never been greater,” says Simmonds. “New developments in technology allow the customer to compare, contrast and review their choices, as well as interact with suppliers and fellow customers worldwide. Whether customers are looking for unique holidays with bespoke services or simply want to combine a cheap flight with a hotel, they have a wealth of brands and booking options to choose from.”
As TUI is home to 220 brands, including Thomson, Laterooms.com and the cruise specialist Intercruises, the organisation itself certainly presents consumers with a wealth of options. The company, which was created in 2007 by the merger of Thomson Holidays and First Choice, in which Simmonds played a pivotal role, currently employs around 55,000 people worldwide.
Compared with the challenge of merging two big businesses, surely her current remit is a walk on the beach? After all, Simmonds was promoted to head of HR at the National Magazine Company (now Hearst) only one year after joining as an HR adviser, and only three years after beginning her HR career at medical research organisation The Wellcome Trust.
Managing a merger
She admits the merger, which involved cutting 3,000 roles from the business, was one of the “toughest” moments of her career to date, but also one of the most rewarding. “The main challenge was dealing with the uncertainty people experienced and trying to stabilise the workforce at a time when everyone felt destabilised,” she says. “A merger is quite different from a normal change process. The challenge was getting the organisation integrated as early as possible. We needed to reduce roles but at the same time retain people to help with the transition.”
Alongside the merger came relocation, which meant some people naturally left the organisation. Simmonds says TUI really wanted to be “transparent and fair” around the process of selecting people for roles, so that it didn’t “feel like a takeover”.
“One of the first things we did when we merged was identify the values that represent TUI,” she adds. “We brought a lot of different people together and asked them what TUI stood for. There was a surprising degree of commonality. The core values do set the foundation.”
Since the merger, a more aligned approach to HR has been implemented across the group, including the creation of talent programmes, global functions for resourcing and the development of an integrated HR strategy. For Simmonds, some of the best measures of success are the soft ones: “I never hear people ask: ‘What company do you come from?’ People straight away say they work for TUI.”
Boosting employer brand
The next step is re-establishing the employer brand, a task that takes on even more significance in such a competitive market. Simmonds says she is working on “describing TUI from an employment perspective so it doesn’t matter where you work in the organisation, the experience can be the same”.
She admits TUI, despite being one of the UK’s largest listed companies, is not a well-known brand. “Most people know who Thomson or First Choice are, but not TUI,” she says. “It’s something that can have a big impact on the bottom line, so we must get it right. We are doing some excellent things here, but perhaps haven’t been strong enough in getting the word out.” These “excellent things” include an international graduate programme, which is regularly placed in the top rankings.
Nailing employer branding is key to the ambitious international plans of the company, which is active in 31 markets. “We want to have more international people and to promote global opportunities,” Simmonds explains. “From a talent management perspective, we must make sure our employees realise that if they join a business in Belgium, Holland or the UK, there will be the possibility of going to the US, China or Russia.”
However, not everyone will need, or wish, to relocate, which is why Simmonds’ HR team is investing in ?preparing managers to lead virtual teams in different locations, looking at virtual leadership in a “cross-cultural environment”. She explains: “We are aware of the importance of digitally skilling our workforce because technology will be one of the key influencers on travel ?in the future. As a company, we need to work on ?promoting these capabilities and developing digitally literate employees.”
Sometimes these skills are needed so quickly that TUI has no choice but to bring in external resources, but Simmonds would like to establish a strong skills base internally to support wider business strategy. “It’s thinking about how we can move fast and execute our strategy, but at the same time make sure we are building the internal resources needed to secure those skills going forward,” she says. “HR has a significant part to play in identifying the roles we need for the future.”
HR also has a role to play in bringing the organisation’s sprawling arms together into one cohesive group. TUI used to have a decentralised structure, with many different businesses in various countries. Now it is moving towards becoming a single international corporation.
“We want to make the shift from a federated group of different businesses to becoming one global organisation,” Simmonds says. “It’s significant from an HR perspective, bringing your business together and working as one organisation. That will be the focus for HR over the next couple of years.”
Much of the challenge comes down to HR and operational development process. She adds: “As you bring your business together, you need to think about how the structure helps that, how the reward process helps that. How do you drive change in that environment?”
With so many different brands, in so many different countries, with so many different origins, Simmonds says she is looking closely at what binds people together. “We’ve got legacies. It’s not as if we’re a new business that has grown,” she explains. “We operate in a lot of different countries, so there’s no natural way for people to come together. You almost have to force that opportunity.”
For Simmonds, ensuring cohesion across the world is next on her to-do list – a big ambition, then. “I want all of our employees to feel they work for one global organisation, not just in Germany, France or the UK,” she says. “The people challenge will be to increase collaboration and encourage mobility, so our people really do feel part of ?one team.”