Hospitality Human Capital process model in crisis management: Managing human capital and revealing employees’ hidden capabilities

Abstract

As the hospitality industry is highly human-dependent, proper Human Capital management is crucial for responding to these challenges and becoming resilient in the long-term perspective. This study aims to verify the Value-Driven Process Model of Hospitality Human Capital management in the context of Crisis Management in restaurant SMEs, which is an under-researched part of the industry. The authors adjust the model by Young et al. (2005) concerning two phases of a crisis – crisis event and post-crisis phases. Additionally, we aimed to expand the model by showing what values for businesses emerge from Human Capital management practices. As a methodology, we used semi-structured interviews conducted with restaurant owners or managers who experienced the COVID-19 pandemic crisis. The obtained results were analyzed using content analysis. Our findings revealed that some managerial actions concerning Human Capital may result in quick and successful adaptation to new and unknown conditions. Moreover, we uncovered hidden and unique capabilities of restaurant employees that, if properly managed, may become a substantial additional value for businesses and enhance their competitive advantage and resilience. The study may be food for thought for all practitioners in the hospitality industry, especially in restaurant SMEs that are an under-researched part of the industry. Our findings also fill the gap concerning Human Capital and Crisis Management frameworks in hospitality. This study delivers new knowledge in the field of Human Capital management in hospitality during a crisis.

Keywords

Crisis management human capital hospitality human capital management organizational resilience

Introduction

Managing the business in times of crisis or disruptive changes is an inevitable challenge for business owners and managers, especially concerning the hospitality industry (Leta and Chan, 2021). Since this industry is highly human-dependent (Aman-Ullah et al., 2022), investigating crisis management issues through the lenses of Human Capital (HC) is justified and expected (Alnassafi, 2022). Even though hospitality literature is rising, a significant gap in empirical research on Crisis Management, especially concerning restaurants, is visible (Dayour et al., 2020; Hahang et al., 2022; Wut et al., 2021). The COVID-19 pandemic has caused adverse global effects on the hospitality industry (Baum et al., 2020; Liu et al., 2023) and verified HC strategies implemented by the hospitality business. Investigating managerial activities during the COVID-19 crisis can be the background for verifying previously existing Human Capital Management models and the source of the best Crisis Management practices supporting organizational survival.

Since HC is the source of innovation (Kang et al., 2007; Molina-Morales and Martínez-Fernández, 2010), improves business performance, and augments the competitive position of the business (Jogaratnam, 2018), its pivotal role in the context of Crisis Management has been already noticed (Alnassafi, 2022). Managerial activities should be appropriately adjusted to the crisis and integrated with HC (Vardarlıer, 2016) to achieve organizational resilience. Despite the recognized importance of HC in navigating through crises, there’s a noted absence of a dedicated Crisis Management model that integrates HC, especially one that is tailored to the restaurant business and the broader hospitality industry (Huang and Wang, 2023). This study aims to fill this gap by investigating how HC is managed during a crisis within the restaurant part of the hospitality industry. To do that, we decided to use the Value-Driven Process Model of Hospitality Human Capital (Young et al., 2005), adjust and expand it in the context of Crisis Management by finding the answers to the following research questions:

• What were the mission statements and SOs of restaurant businesses in the time of crisis?

• How was Human Capital managed by managers/owners in the time of crisis?

• Do employees show characteristics described by service-oriented employees, empowered employees and committed employees Human Capital components during the crisis?

• What business values result from HC management during the crisis?

This study makes a novel contribution to the Crisis Management literature within the hospitality sector by highlighting the integral role of HC management in enhancing organizational resilience and adaptability during the COVID-19 pandemic, specifically within small restaurant businesses. Drawing on the Value-Driven Process Model of Hospitality Human Capital (Young et al., 2005), it enriches the theoretical discourse by integrating HC management practices with Crisis Management strategies. Our study offers empirical insights into the effects of specific managerial activities concerning HC and highlights potential business values – innovation, flexibility, organizational learning, and resilience – gained thanks to HC. The findings provide actionable guidance for restaurant managers in formulating robust crisis response mechanisms and pave the way for future research to explore the dynamic interplay between HC and Crisis Management in the hospitality industry. Through a qualitative analysis of restaurant owners’ and managers’ experiences during the pandemic, this research delineates a nuanced understanding of the strategic importance of HC in navigating through crises, thereby filling a significant gap in existing hospitality literature.

Literature review

Human capital in hospitality

Human Capital definitions vary from a measurable component of a company’s capital to an intangible resource that is impossible to represent by any metrics (Nafukho et al., 2004). Even though definitions differ, all of them are related to human skills, capabilities, and experiences. Because hospitality is inherently associated with relationships between individuals (host and guest relationship) and processes that require specific actions from people (customers and hospitality business workforce) (King, C. A., 1995), the hospitality industry is one of the most human-dependent industries, and HC is critical for the high performance of the hospitality business (Aman-Ullah et al., 2022; Kianto et al., 2010; Taegoo et al., 2012). HC is so unique in hospitality (compared to other kinds of businesses) that one can talk about hospitality-specific Human Capital (Young et al., 2005).

Employee intrinsic and extrinsic motivation influence hotel service ratings thanks to the proper human resource practices (V De Souza Meira et al., 2022). Thanks to knowledge sharing among employees, many innovative ideas may emerge, which suggests that HC is a source of innovation (Kang et al., 2007; Molina-Morales and Martínez-Fernández, 2010), and it enhances innovation performance (Nieves et al., 2014; Ordanini and Parasuraman, 2011; Walsh et al., 2008). Considering restaurant businesses, HC can augment its competitive position and improve its overall performance (Jogaratnam, 2018). HC is often treated as one of the intellectual capital (IC) components and perceived as the source of value and profitability (Andreeva and Garanina, 2016; Bontis, 1998; Edvinsson and Sullivan, 1996). Concerning hospitality, there are indications that evaluating a company’s IC is useful (Engström et al., 2003), and a positive relation between IC and return on assets can be observed (Costa et al., 2020). On the other hand, some studies indicate a moderate impact of HC on business performance and suggest that gaining a better understanding of this relationship is extremely important (Aman-Ullah et al., 2022). One of the attempts to understand this relationship in the hospitality industry was the development of the “Value-Driven Process Model of Hospitality Human Capital”, Figure 1, (further referred to as the Hospitality Human Capital model – HHC model) (Young et al., 2005).

The HHC model offers a closer look at HC in hospitality and shows how the business’s strategic objectives (SO) can be achieved thanks to HC and proper managerial activities concerning HC. The model also distinguishes components of HC in hospitality:

- Service-oriented employees – ones who can provide the best service to the organization’s customers; employees who are considerate, cooperative, helpful, customer-focused, perform well under pressure, and enjoy providing the service.

- Committed employees – those fully committed to the organization. Commitment refers to an employee’s overall concern for the organization, influences the employee’s intent to quit, and is positively related to employees’ shared values.

- Empowered employees – those confident in the ability to contribute to the firm’s success; they make decisions, think creatively, and manage to solve problems.

The model describes the process of managing HC in hospitality, starting from the business mission statement. It shows what SOs result from the mission statement and stand behind the specific managerial activities, and which managerial activities affect the particular component of HC.

Crisis management in hospitality

According to Coombs (2021), a crisis can be defined as “an unpredictable event that threatens important expectancies of stakeholders related to health, safety, environmental, and economic issues, which can seriously impact an organization’s performance and generate negative comments”. During a crisis, managerial activities must be adjusted quickly to unpredictable situations affecting the business environment. Each crisis consists of phases to which management activities should be adjusted. Most Crisis Management frameworks are based on 3-stages, for example, Smith's (1990), Richardson’s (1994), Burnett’s (1998), or Coombs’ (2021), stating that each crisis generally consists of pre-crisis, crisis-event/during the crisis, and post-crisis phases. For the purpose of this paper, such a 3-stage Crisis Management framework is used.

Recent studies show that Crisis Management is becoming a global trend in hospitality research (Aksoy et al., 2022), but for now, hospitality Crisis Management literature is relatively scarce what has been shown in literature reviews concentrated on this topic (Ritchie and Jiang, 2021; Wut et al., 2021). A massive boost in such research has been observed in the past 4 years since the COVID-19 pandemic. However, in most cases, authors focused only on hotels (Dayour et al., 2020; Hahang et al., 2022; Wut et al., 2021), which are often large enterprises. Crisis Management research in hospitality focused on SMEs is neglected, while such enterprises are a big part of the industry. According to Herbane (2013), Crisis Management research focusing on SMEs is of enormous importance because usually such enterprises have no formal strategies and are unprepared for any crisis. Moreover, available research usually brings attention to macro-level Crisis Management (Aldao et al., 2021; Dayour et al., 2020; Gkoumas, 2022; Li et al., 2021) and proposes possible strategies that should be taken by governments or by hospitality enterprises collectively. At the same time, very recent studies point out an underresearched area in micro-level Crisis Management and suggest a need for more research in this field (Lai and Cai, 2023).

As discussed, current research in the hospitality industry primarily focuses on hotels while overlooking restaurants, which constitute a significant sector with distinct characteristics. Unlike accommodation-oriented businesses, restaurants focus on providing meals that encompass nutrition, social interaction, cultural engagement, and sensory enjoyment (Pizam, 2009; Symons, 2013). Consequently, their strategies, business operations, and Crisis Management practices will likely differ substantially from hotel businesses, primarily serving tourists and travelers seeking accommodation (Pizam, 2009). For accurate insights, hospitality management research on Crisis Management should distinguish between hotels and restaurants. However, only one recent study exclusively addresses Crisis Management within restaurants (Gkoumas, 2022), underscoring a research gap concerning small and medium-sized enterprises (SMEs). Unlike hotels, which are often large enterprises, restaurants represent small-sized businesses.

Human Capital and Crisis Management

In many industries, HC has proven to play an essential role in managing crises (Alnassafi, 2022). According to Vardalier (2016), all Crisis Management plans should be integrated with HC, bearing in mind that employees play a pivotal role during all crisis phases. These conclusions were partially supported by findings from empirical studies, showing that proper human resource management practices during a crisis positively impact business performance (Mirzapour et al., 2019). Managers’ awareness and knowledge about HC, especially the needs and abilities of employees, are helping organizations to overcome the crisis (Lazarov, 2020). The research concentrated on tourism suggests that developing the capacity of HC to respond to and manage crises has become a major risk mitigation issue for organizations and nation-states (Pforr and Hosie, 2007). However, none of the presented conclusions refers to restaurant businesses or presents any specific model explaining how HC should be managed to survive the crisis. One of the latest studies dedicated to HC’s role in restaurant performance suggests that in comparison to other IC components, HC does not play a significant role in successful business performance (Leon, 2021) in crisis situations, but his approach toward investigating the value of HC is based solely on TripAdvisor customer reviews, what entirely ignores the perspective of managers and employees who compose the HC. Given the importance of HC in hospitality, its role in Crisis Management in hospitality seems to be crucial.

To summarize, there is a clear research gap concerning Crisis Management in the hospitality industry. First, research specifically focused on restaurant businesses is lacking, despite their unique operational and strategic needs compared to accommodation-focused enterprises. Second, existing studies predominantly address large enterprises, often overlooking the experiences and challenges faced by small and medium-sized enterprises (SMEs), which most restaurants represent. Current Crisis Management literature generally lacks a micro-level perspective, particularly one that examines the viewpoints of individual business owners or managers. Furthermore, there is a lack of coherent and unequivocal findings on HC’s role in hospitality businesses, especially restaurants, during a crisis.

This study addresses this gap by exploring Crisis Management practices within restaurant businesses, specifically from the perspective of their owners and managers. It also aims to develop a Human Capital Crisis Management model tailored to the hospitality industry, while critically evaluating the findings of Leon (2021) regarding the role of HC in restaurant performance during crises. To achieve this, the authors elaborate on the proposed HHC model, drawing on empirical research conducted during the COVID-19 pandemic. The authors adapt Young’s model by incorporating crisis-event and post-crisis phases of the Crisis Management framework, demonstrating the strategic objectives that can be achieved through effective HC management during these periods. Moreover, they outline how these goals can be realized and highlight the potential benefits that HC management can bring to restaurant businesses during and after a crisis.

Methodology

Authors assumed that specific components of Young’s model (e.g., SOs, managerial activities) may differ significantly if the time of crisis is considered. To be able to achieve the aims of this study, the authors decided on the following research questions:

(1) What were the mission statements and SOs of restaurant businesses in the time of crisis?

(2) How was Human Capital managed by managers/owners during a crisis?

(3) Do employees show characteristics described by service-oriented employees, empowered employees and committed employees Human Capital components during crisis?

(4) What business values result from HC management during a crisis?

The first two questions directly refer to the HHC model as they allow us to identify the business mission statement, SOs, and managerial activities concerning HC. However, the third one aims to verify HC components proposed by Young, and the fourth aims to expand the model with possible business values gained thanks to HC.

We used face-to-face semi-structured interviews to get a complete insight into organizational processes, reasons, and effects of all decisions or actions (Creswell, 2009). Such a method allowed the flexibility of conversations and the ablity to go deeper into interesting emerging themes (Creswell, 2009). We developed and followed an interview guide with notes and bullet points for the interviewer to follow to ensure that all critical issues were touched on during the interview. We decided on such a form because we aimed to hear the story of what was happening in the restaurants during the COVID-19 pandemic in the context of employees and all related issues. Moreover, it was also more comfortable for the interviewees. It allowed them to describe their feelings and points of view more freely without compelling them to fit any determined or standardized categories. That resulted in obtaining good quality open-ended narrative data.

We decided on convenience sampling to maximize the significance and quality of obtained results and increase the credibility of findings (Maxwell, 2008). Here, in contrast to Young et al. (2005), we chose not HR hospitality professionals with experience in large enterprises of the accommodation industry but small restaurant owners and managers. Such a decision enabled verification of the HHC model in the context of a different part of the hospitality industry that, while designing the model, was not taken into consideration. While choosing the sample, we took into consideration also the following conditions:

• Restaurants located in Tricity (3 cities: Gdańsk, Gdynia and Sopot, Poland)

• Restaurants that managed to survive the COVID-19 pandemic crisis (restaurants that were opened at least 1 year before the pandemic and did not close during the pandemic – at least not until April 2022)

Taking into consideration the suggestions of Gkoumas (2022) to maintain diversity within research samples concerning restaurants, we also decided to differentiate our sampling and include a few distinct types of restaurants:

• Fine-dining

• With specific cuisine (e.g., vegan, Thai)

• “Home kitchen” – restaurants serving typical Polish dishes with informal service

• Based on regional products (mainly fish)

• Canteen – entertainment venues (organizing vernissages, DJ sets, etc.) serving popular dishes like pizza or burgers but with the idea of slow food.

The aim of imposing such conditions for choosing the sample was to ensure the most valid and relevant results in case the information gathered from each interviewee would reveal similar patterns concerning SOs and Human Capital management practices. The final sample included 12 managers or owners of restaurants representing each mentioned type of restaurant. The sample size was limited to 12 restaurants only due to difficulties with pandemic restrictions, which were still valid while conducting the study. Moreover, the aim was to conduct the interviews right after the crisis-event phase to minimize the risk of hindsight bias and obtain the most reliable results (Roese and Vohs, 2012), which also came along with the limited study time. Furthermore, the data analysis showed data saturation (Creswell, 2013). Hence authors decided that continuing the research and enlarging the research sample would not produce new information relevant to answering the research questions. A table summarizing the details concerning the research sample is added as Appendix 1 to this paper.

We focus on the crisis-event phase and the beginning of the post-crisis phase of the Crisis Management framework. All interviews were conducted in 2022 and referred to the period between March 2020 and December 2021. March 2020 is the moment of the COVID-19 pandemic outburst, which refers to the second phase of the framework – the crisis event, while by the end of 2021, most governmental restrictions got loosened, more and more people got vaccinated, the hospitality business got used to periods of closing – post-crisis phase.

Each interview lasted around 40 minutes and was transcribed using Sonix.ai software. Transcriptions were corrected manually by the first author. Obtained text data was analyzed using content analysis by both authors. Following Creswell’s guidelines (Creswell, 2009, 2013), we read transcripts briefly to get a general sense of the obtained data. Then, we proceeded to coding. Since we aimed to verify Young’s HHC model, we decided to use elements of the model (mission statement, SOs, managerial activities, Human Capital) as the framework for the analysis. Therefore, in the first step of coding, following the deductive approach of content analysis (Elo and Kyngäs, 2008), we assumed elements of the model to be the themes we are looking for in the text. Apart from the mission statement, SOs, managerial activities, and Human Capital, we also assumed the theme “values” to code the data necessary to answer the 4^th research question.

Moreover, we decided to code also text segments that bring valuable or interesting information we did not expect to find while designing the research (Creswell, 2013). Therefore, in the the section where results are presented, the authors present such unexpected themes, calling them “emerging themes”.

After finishing the first step of coding, we obtained the small categories of information that matched assumed general themes. Then we analyzed codes, using an inductive approach (Elo and Kyngäs, 2008), in each theme separately and looked for occurring patterns that could be grouped into sub-categories of the themes (Bryman, 2016) so that we could present the specific mission statements, SO’s, managerial activities and HC characteristics within the HHC model. After the coding, the authors discussed the results of the analysis. No discrepancies regarding the first step of coding occurred. However, some disagreements occurred regarding identified and named sub-categories of managerial activities, strategic objectives, and values. To resolve the issue, both authors reread the transcripts, discussing the differences in coding and interpretation of text segments. After the discussion, the authors reached a consensus regarding the names and classification of sub-categories, and the intercoder agreement was reached.

Results

The authors created five categories to represent the results. Created categories refer to specific elements of the HHC model and represent the conducted content analysis. The last category relates to the authors’ objective to expand the HHC model with the next part of the process – the values restaurant businesses gained during the crisis thanks to HC and its components. To make the analysis of the results clearer and easier to follow, the authors present the summary of the content analysis in Table 1.

Table 1.

Summary of the content analysis. The table presents the final result of coding, showing in which investigated cases the specific Strategic Objective, Managerial Activity, Human Capital feature, or Value for the business occurred.

	Restaurants	A	B	C	D	E	F	G	H	I	J	K	L
Strategic objectives	Mission statement: Survival	X	X	X	X	X	X	X	X	X	X	X	X
	Adapt to new conditions	X	X	X	X	X	X	X	X	X	X	X	X
	Keep employees	X	X	X	X	X	X	X	X	X	X	X	X
	Minimize costs	X	X		X		X		X	X	X	X	X
Managerial activities	Open communication	X	X	X	X	X	X	X	X	X	X	X	X
	Involvement in decision-making		X	X	X	X	X	X	X	X	X	X
	Differentiation of duties	X	X	X	X	X	X	X	X	X	X	X	X
	Training						X		X	X		X
	Assuring safety		X	X	X		X	X	X		X	X	X
	Assuring regular salaries and financial support	X		X	X	X	X	X	X	X	X	X
	Prioritizing well-being	X	X	X	X	X	X	X	X	X	X	X
	Engaging employees in all possible activities	X		X	X	X	X	X	X	X	X	X
	Nurture psychological bonds	X	X	X	X	X	X	X	X	X	X	X
Human capital		Service-oriented employeesCommitted employeesEmpowered employees
Values	Flexibility	X	X	X	X	X	X	X	X	X	X	X	X
	Organizational learning	X	X	X	X	X	X	X	X	X	X	X	X
	Innovation	X	X	X	X	X	X	X	X	X	X	X	X
	Resilience	X	X	X	X	X	X	X	X	X	X	X	X

Moreover, the authors decided to show some additional themes that emerged from the content analysis and were not considered while designing the research. Those will be presented under an additional category – emerging themes. This category was not included in Table 1 as it does not refer to the HHC model.

Mission statement

According to reviews of literature concerning mission statements (Mullane, 2002; Salem Khalifa, 2012), it is a statement that defines the business, its essence, and the reasons for its existence. However, according to all respondents, there is no possibility to formulate the mission statement during the crisis. Each respondent claimed that since the COVID-19 pandemic outburst, the only mission they could think of was simply the survival of their business. Only one owner (D) mentioned uniqueness in the context of the mission statement, but nothing specific was hidden behind that. He said he wanted the business “to be somehow unique” but only to encourage customers who were scared of ordering food during a pandemic.

Strategic objectives

To refer to or modify Young’s HHC model (2005), we treat SOs as factors pivotal for achieving the business’s mission. All respondents, while talking about the pandemic, expressed their deep concerns about the future of their restaurants. Each owner or manager was afraid of being unable to pay the bills, loans, or salaries, which would lead to closing the business. Being asked what would be the most important factors to survive the COVID-19 pandemic and lockdowns resulting from it, all interviewees pointed out that they wanted to keep their employees (Table 1 keep employees). The best description of how important this SO was for restaurant businesses is the statement of the owner of restaurant F, who said, “These people are the heart of this place.” Moreover, another SO identified through content analysis is cost minimization. The majority of interviewees very directly defined this factor. Other respondents referred to cost minimization (Table 1 – minimize costs) by pointing out some necessary movements like negotiating lower loan installments, postponing installments, and negotiating lower prices from suppliers or rental fees. In the case of D and H, the owners decided even to change the premises since negotiations were unsuccessful. Other important factors for the survival of the business during the COVID-19 pandemic mentioned by respondents were the creation of a new menu suited for delivery and switching to delivery, adding something completely new and unique to the offer, and closing for the time of hard lockdown. Since all these factors refer to reorganization and changing the business by restrictions and forced regulations, the authors treated them as one SO – adaptation to new market conditions.

Managerial activities

During the interviews, respondents were asked what actions concerning their workforce they took to achieve all the SOs during a crisis. While respondents’ answers concerning mission statement or SOs categories were relatively consistent and similar among all restaurants included in the sample, the ways of treating and managing employees varied slightly.

To both minimize costs and keep employees, respondents decided to engage the whole staff in marketing activities and delivery service. That resulted in avoiding potential costs connected with using popular delivery services (like Uber Eats and Wolt) and assuring working hours for waiters and bartenders who could not do their typical duties (Table 1 differentiation of duties).

All respondents mentioned organizing meetings with the whole staff to openly and honestly discuss the situation and potential risks, including the reduction of working hours. The most critical part of these meetings was managers’ and owners’ honesty towards all the staff concerning the business’s current and potential future state (Table 1 – Open communication).

In most restaurants, the whole staff was invited to share their concerns and it was involved in deciding to remain open despite the restrictions or close during the hard lockdown (Table 1 – Involvement in decision-making). Managers and owners wanted to show their employees how important they are to the business and how valuable they are. Respondent K said, “We tried to implement all possible suggestions from them [to show them how we depend on them].”

Most restaurateurs at such meetings told employees that they would do everything they could to ensure at least the basic salary for everyone (Table 1. - Assuring regular wages and financial support). Owners of restaurants H, I, J, and K sacrificed their savings to ensure regular salaries, and they also offered no-interest loans to employees in the most challenging situations (because, due to no typical service, no one received tips from customers).

Managers and owners also pointed out many activities concerning the safety of their staff, like providing safety training, following all WHO or governmental advice, and introducing shift work with division into fixed employee groups to reduce the risk of infection (Table 1 – Assuring safety). Some statements of respondents emphasize how important was assuring safety to all employees. Owner of restaurant D claimed, “I didn’t want to ask them to work and have contact with people [if they do not feel safe]; no one wants to put family members at risk”, while the owner of restaurant C referred to one employee that was very afraid of the COVID-19 virus “she didn’t have any holidays left, and she stayed at home [while the restaurant remained open], but I treated her all the time like she is at work and she received salary regularly. I really take care of the sense of safety of all of us”.

Owners and managers also took actions concerning employees’ mental health and well-being – sharing positive thoughts, reminding them of the temporariness of the situation, and showing support and empathy in situations of doubts or anxiety (Table 1 - Prioritizing well-being). Some respondents even decided to open the business only to give their employees a piece of “normality” and enable them to have contact with other people. At the same time, such action was not beneficial for the business in the financial aspects (B, C, D, H).

Some decided to involve employees in renovations of the local (D, H, J) to keep them busy and not become depressed. The best illustration of such kind of actions could be the statement of the owner of restaurant E − “we did many things that were absolutely not profitable for us – just to be able to handle this [restrictions to stay at home if one is not working] mentally” (Table 1 - Engaging employees in all possible activities).

Most respondents described the pandemic period as the long process of tightening bonds among employers and employees (Table 1 – Nurture psychological bonds). In some cases, the managers and owners took advantage of the restaurant’s closure to improve their staff’s skills (Table 1 – training). They set up training sessions where employees could share their unique talents or arranged for them to attend online courses and external training programs. Yet, the reason for that was not only to improve the staff skills but also to assure employees with some tasks that would encourage them to stay and wait for the normality.

Hospitality Human Capital and its components

Concerning the characteristics of Human Capital, restaurants pointed out many features of their employees that were especially noticeable. First of all, employees proved they can work under pressure, show they are resistant to stress, and are ready to leave their comfort zone. Each interviewee pointed out that their employees proved highly flexible as they quickly adapted to new conditions and took on new responsibilities. Moreover, some respondents claimed their employees showed multitasking abilities at a significantly higher level than initially expected. Employees also were described as highly creative in tough times and eager to find solutions that could be helpful for the business. All respondents emphasized employees’ tremendous commitment to their work, the business in general, and coworkers – they did not complain about lower wages, reduced working hours, or worse working conditions (meaning difficulties coming from safety restrictions). There was a strong sense of loyalty and dedication among the staff, willing to make personal sacrifices for the greater good of the restaurant. Despite the lack of the possibility of regular service, some employers mentioned that their employees showed how deeply they care about customers and enjoy their work, for example, through actions that allowed strengthening the bonds with customers online or through delivery.

Values

Respondents were also asked to summarize the pandemic period and elaborate on what their business gained during this time, thanks to HC. Everyone claimed that, in general, it was the time of learning about each other and from each other. They gained much more experience and awareness of the business and how much it depends on employees as the source of knowledge and skills. Such responses show that the value they recognize is organizational learning. Moreover, managers and owners stated that thanks to employees they can call their business flexible and ready to adapt to emerging changes. Some respondents even went further concerning this flexibility and referred to resilience as the long-term value gained thanks to HC during the pandemic crisis (A, C, I, J, K). Interviewees got very emotional while describing HC’s merits for the business and used such sentences as “the staff itself is our biggest value” (E) and “we survived it only thanks to our team” (F). In a few cases, respondents mentioned that thanks to the engagement of employees and their efforts concerning the fight for the restaurants, the restaurant also managed to tighten the bonds with customers and strengthen their overall position on the market (B, H, K). Last, but not least, employees’ engagement and creativity resulted in finding many unique and novel solutions, considered as innovation in the context of previous business activities (like boxes of food to share, packs of goods, new products, and ways of selling them).

Emerging themes

Through data analysis, we observed some codes forming ideas that did not match any categories that could be represented in the HHC model assumed by the research design, nor did they answer our research questions. However, the authors decided that these additional sets of ideas form some themes that could bring further insight into the importance of HC in hospitality. One of the observed themes was the hidden potential of employees. In some cases, respondents elaborated on the capabilities and skills of their employees of which they were not aware, and thanks to the crisis, they noticed how helpful the staff may be in many kinds of business activities (marketing activities, building relations with customers, inventing unconventional solutions). As a result, they realized they could count on the staff much more and delegate them more difficult or responsible duties.

The additional theme we identified is employee support. In most cases respondents mentioned the big support employees gave during the difficult times and pointed out that employees took care of employers wellbeing as well. Showing support worked both ways, and respondents emphasized how motivated they were during the crisis, thanks to employees’ attitude, commitment, and loyalty.

Discussion

In his model, Young did not focus on identifying a mission statement. However, to make the model more explanatory, the authors identified the specific mission statement of restaurant businesses during crises. While “survival” may not fully align with traditional definitions of a mission statement (Mullane, 2002; Salem Khalifa, 2012), which typically emphasize the essence and purpose of a business, the unprecedented challenges of a crisis compelled restaurant owners and managers to prioritize immediate survival over broader strategic considerations. The situation’s urgency left little room for crafting or reflecting on a traditional mission statement. Nonetheless, framing “survival” as the mission during crises provides a coherent explanation for the decisions and actions taken amidst uncertainty. This also supports the findings of Ngoc Su et al. (2021), who emphasized that according to hospitality managers and owners, the primary mission is to survive. Moreover, while investigating strategies SMEs incorporate during crises, scholars call them “survival strategies” (Arslan et al., 2022). For these reasons, we incorporated “survival” as the mission statement in the adapted HHC model. The original HHC model, developed under “business as usual” conditions, presumes that Human Capital Management processes originate from a well-articulated mission statement, which subsequently informs specific SOs. However, such a conventional mission statement is absent in a crisis context. The authors’ identification of “survival” as the mission statement suggests fundamental shifts in the further parts of the model when applied to crises.

Through content analysis, authors were able to identify three SOs for the time of the COVID-19 pandemic crisis: keep employees, adapt to new conditions, and minimize costs. Since the mission statement differs from the typical one assumed by Young, the SOs identified by the authors deviate from those in Young’s model. One can argue that the identified SO “keep employees” may reflect “treat employees well” in the original model. However, keeping employees is a much broader perspective. It contains all the factors that may influence employee’s willingness to stay in business during the crisis, including how employees are treated and the general condition and capabilities of the business itself to maintain employees. Therefore, the SO “treat employees well” proposed by Young does not encompass the meaning and essence of the general managers’/owners’ objective.

Adaptation to new conditions was the only way for restaurants to operate during the pandemic or wait out this period and that is the second identified SO. The conditions resulting from the pandemic required all businesses to look for solutions that would enable them to exist. As our respondents mentioned, the pandemic was not the time of looking for the biggest profits but hoping to be able to pay the amount due. Hence, the aim was to reorganize and rearrange to remain open or receive financial aid for the most extended possible period.

The last identified SO is cost minimization. According to restaurant business owners and managers, it was the key to the survival of the COVID-19 pandemic. Since the revenues decreased significantly overnight and many activities aimed at generating profit were limited due to sudden restrictions announced, minimizing all possible costs could allow the business to endure the demanding conditions for a longer time.

The strategic objectives of hospitality businesses we identified in our research do not align with Young’s model. As we assumed, significant differences considering components of the model are visible in the context of a crisis as opposed to a “business as usual” situation. Providing extraordinary service was not the main thought of restaurant managers or owners during the pandemic, as it was forbidden due to restrictions. Moreover, in contrast to Young, the authors did not obtain any responses from interviewees that would suggest providing shareholder value as the SO. However, our identified SOs of restaurant businesses during the crisis are in line with the findings of Ngoc Su et al. (2021), who suggest protecting and maintaining human resources, reorganization and adaptation to the new reality, and cost minimization as the primarily used and effective strategic approaches of hospitality managers.

The analysis of results addressed the 2^nd question by identifying managerial activities related to human capital (HC) and their connection to strategic objectives (SOs) through patterns in respondents’ answers. Following the assumptions of the HHC model, SOs indicate managerial actions aimed at HC management. Therefore, the authors discuss the findings by outlining which managerial activities result from specific SOs and how these activities are designed to influence HC. The authors present the identified managerial activities with their description and connection to SOs in Table 2 to make the discussion easier to follow.

Table 2.

Managerial activities and their connection with identified SOs concerning HC.

Identified managerial activity	Description	SOs
Open communication	Managers and owners pointed out that being honest with the staff about the difficult situation and giving the employees the space to express their concerns and present their ideas freely was one of the most important actions taken during the pandemic	Keep employees
Involvement in decision-making	Employees were encouraged to take part in decision-making processes, and the most critical decision – to remain open or close during the hard lockdown – was taken by the whole team	Keep employees
Differentiation of duties	Managers distributed duties among all employees, no matter the skills or position employees used to have	Keep employees,Minimize costs
Training	Free time was used for developing the skills and competencies of employees	Keep employees,Adapt to new conditions
Assuring safety	Managers and owners emphasized the importance of safety environment in the workplace and assured all necessary means to minimize the risk of infection among employees	Keep employees,Adapt to new conditions
Assuring regular salaries and financial support	Despite problems with earning profits and paying all dues, regular employee salaries were prioritized. In some individual cases, employees could ask their employer for a no-interest loan	Keep employees
Prioritizing well-being	Many actions concerning the well-being of employees were taken. Managers and owners emphasized that they tried to maintain a positive attitude, assure their staff that everything would be ok, and listen to employees’ needs. To avoid employees’ anxiety, managers and owners sometimes even decided on actions that were not profitable for the business	Keep employees
Engaging employees in all possible activities	While adapting to new conditions, restaurant businesses changed their typical activities, and current employees were asked to perform completely different tasks – managing marketing activities, delivering food, renovating the local, etc.	Keep employees,minimize costs
Nurture psychological bonds	During the time of crisis, managers tried to strengthen the bonds with their employees, offering them support at many different levels and showing empathy	Keep employees

The findings reveal that only two managerial activities identified – “nurturing psychological bonds” and “training” – align with those proposed by Young. However, nurturing bonds with employees exemplified actions aimed at retaining staff in the crisis period when the risk of losing the employee was much higher than in a typical environment. According to results, in crisis conditions, this managerial activity is marked by tightening the bonds on a higher, more personal level. Moreover, training during the crisis served dual purposes: retaining employees by supporting their development and facilitating adaptation to new conditions, such as compliance with pandemic restrictions. Hence, the “nurturing psychological bonds” and “training” managerial activities in the original HHC model do not fully address the complexities of managerial activities in crises.

Several identified managerial activities only partially connect to Young’s framework. For instance, “open communication” identified by authors somewhat aligns with “fair employer” from the original model. Still, it emphasizes transparency about organizational challenges, demonstrating a crisis-specific focus on retention. In contrast to Young’s model, where general managerial activity “meet employees’ expectations” was presented, the authors distinguished many actions aimed at satisfying employee’s needs – “assuring safety,” “prioritizing well-being,” and “assuring regular salaries and financial support.” By categorizing these actions separately, the study underscores the multi-dimensional nature of employees’ needs and the heightened challenges of meeting them during a crisis. It is worth noting that activities like ensuring safety were not only employee-centered but also driven by compliance with emerging restrictions, linking them to the strategic objective of adapting to new conditions.

The study also identified three managerial activities absent in Young’s model – “engaging employees in all possible activities”, “differentiation of duties”, and “involvement in decision-making”. These practices arose directly from crisis conditions and contrasted sharply with Young’s emphasis on the hiring process. Limited resources during the COVID-19 pandemic made traditional hiring strategies impractical. Instead, managers relied on existing HC, reallocating employees to non-standard tasks (e.g., renovations, marketing, delivery). This approach simultaneously minimized costs and retained employees, aligning with multiple SOs, as presented in Table 2. Additionally, involving employees in decision-making became critical for maintaining morale and fostering a sense of collective impact, further emphasizing the inadequacy of Young’s model in addressing the nuances of crisis-driven management.

Our results show that, in contrast to Young’s model, managerial actions result from more than one SO (Table 2). That indicates that during a crisis, not only are SOs different, but they also require more complex and omnidirectional managerial activities. That suggests that managerial activities may be multidimensional in the context of the goals they are aimed to achieve. Moreover, considering the nature of the actions taken and the goals of managers and owners to support their employees, a people-centered approach is visible. That shows empirical support for the micro-level Crisis Management conceptual framework proposed by Lai and Cai (2023).

The third research question of our study aimed to examine the characteristics of Hospitality Human Capital, specifically assessing whether the components proposed by Young align with the perspectives of managers and owners during a crisis. As detailed in the previous section, our findings confirm that hospitality employees exhibit the traits described in Young’s HHC model. These results are consistent with Young’s identification of hospitality employees’ key characteristics and skills. However, a significant divergence from Young’s model emerged in our analysis: we found it challenging to treat the three components proposed by Young as distinct, separate categories. In contrast to Young’s framework, where HC is conceptualized in clearly defined components, our respondents viewed their employees as a unified group characterized by a broader set of abilities and traits. This holistic view led us to propose a more integrated approach to Hospitality Human Capital, which encompasses the individual components identified by Young but considers them as a cohesive set of features rather than isolated categories. This distinction highlights a critical difference in how HC is perceived and managed in crisis contexts.

The analysis of the results provided a clear answer to the 4^th research question. Recognizing that Young’s model is a value-driven process of HC, the authors sought to identify the specific values businesses could derive from HC during a crisis. Our findings reveal four key values that emerged from effective HC management. First, HC enabled restaurants to adapt and respond to market changes swiftly, demonstrating business flexibility (Golden and Powell, 2000). Second, during the pandemic, employees engaged in peer learning, shared experiences, and acquired new skills, contributing to long-term organizational improvements. This finding supports the concept of organizational learning (Maranville, 1996). Third, employee creativity and engagement led to introducing unique and innovative products and services, underscoring the importance of innovation. Finally, restaurant businesses exhibited organizational resilience as they developed effective responses to the disruptive event, not only maintaining the capacity to return to a state of perceived normality but also demonstrating the ability to innovate in an unstable environment (Ngoc Su et al., 2021). These findings highlight the pivotal role of HC in fostering adaptability, learning, innovation, and resilience – key factors for business survival during crises.

Such findings confirm HC’s enhancing influence on innovation (Ordanini and Parasuraman, 2011). Respondents claimed they provided new kinds and unique services only thanks to employees’ contributions. Since the values gained thanks to HC have their roots in managerial activities, according to Young’s HHC model, our findings support suggestions proposed by Lai and Cai that open communication with employees, reassurance, creating space for sharing concerns and support are crucial and have the positive effect on organizational resilience (2023). Moreover, managerial actions aimed at encouraging employees to develop, take on new duties, and learn new things, together with employees’ potential, skills, and engagement, resulted in achieving business flexibility by restaurants that the authors investigated. That supports Kaushal’s and Srivastava’s (2021) findings that employees’ skills and ability to take on multiple responsibilities or change their typical roles were crucial to fast adaptation and surviving crisis.

Taking a closer look at the additional themes that emerged during our research, restaurant owners and managers highlighted colossal potential, creativity, capacities, and ability to cope with stressful situations (hidden potential of employees). That shows that restaurant employees showed off their talent during the pandemic as they adapted to new circumstances very quickly and came up with many creative ideas that could ensure the future of the business (Ali and Al-Aali, 2016). Moreover, the gratitude expressed by interviewees towards their employees (employee support), alongside the mutual support between managers and staff, reinforces the findings of Ngoc Su et al. (2021), highlighting the reciprocal benefits of such relationships for both the business and its employees. Employees’ commitment empowered employers, motivating them to continue working hard and persevere through the crisis. This behavior can be interpreted as intrinsic motivation (Lai and Cai, 2023), as employees were eager to overcome obstacles and assist their employers without external pressure. This suggests that the HC management process presented in Young’s model may involve a loop from Hospitality Human Capital to SOs, representing how employees’ motivation influences management and achievement of strategic objectives.

In summary, our findings offer a significant extension of Young’s HHC model, highlighting its limitations and providing a novel perspective on the role of Human Capital during crises. While the model’s core components were confirmed, our research reveals essential differences in how strategic objectives and managerial activities are enacted in crises, particularly during the crisis and post-crisis phases. This distinction underscores the need to reconsider the model’s applicability in such contexts. Identifying four key values – business flexibility, organizational learning, innovation, and resilience – further contributes to developing Young’s model. Furthermore, in contrast to Leon’s findings (2021), it emphasizes the pivotal role of HC in performance during a crisis. Moreover, the proposed feedback loop, where employee motivation drives HC, influencing the achievement of strategic objectives, represents a new dimension in the framework. The adjusted and extended model authors are presented in the graph (Figure 2).

Conclusions

This study’s findings contribute significantly to the body of knowledge on Human Capital in the hospitality industry, particularly regarding its role in Crisis Management. Our research fills the literature gap by applying, modifying, and developing Young et al.'s (2005) Value-Driven Process Model of Hospitality Human Capital in a crisis context. It offers new insights into the strategic value of HC during crises (Do et al., 2022). According to the authors, this is the first attempt to create an HC Crisis Management model in hospitality. We added a new element to the model, emphasizing potential business values of the crisis-adjusted Human Capital management process. Such extension of the model opens new paths for investigating Human Capital management’s influence on the hospitality business and its performance. Our findings emphasized the necessity of viewing employees not merely as operational assets but as central figures in crisis resilience and recovery strategies. This shows that HC is pivotal in achieving organizational resilience (Ritchie and Jiang, 2021). Since organizational resilience and its importance become increasingly apparent in the face of dynamic and disruptive changes, for example, geopolitical issues, sustainability, and climate changes, such findings stress the importance of further investigation of managerial activities concerning HC and their potential enhancing effects on it.

This study is based on empirical research on small restaurant businesses, while most of the existing studies on hospitality and tourism are concentrated on hotels or other big enterprises. Given the distinct characteristics of restaurants compared to other hospitality businesses, focusing on restaurants strengthened the reliability and validity of the authors’ findings in this specific context., which adds to our study even more outstanding value (Kaushal and Srivastava, 2021). Moreover, since HC is proven to be country-related, investigating Polish hospitality HC is an additional contribution of our study to HC management knowledge (Andreeva et al., 2021).

The practical implications of our research underscore the vital importance of strategic Human Capital management in bolstering the resilience and adaptability of businesses within the hospitality sector, particularly small restaurant businesses, during crises. This study highlights the necessity for hospitality businesses to prioritize and invest in their workforce through continuous training, empowerment, and flexible work arrangements, ensuring that employees are prepared to face current challenges and are equipped to contribute to innovation and strategic problem-solving during crises or turbulent times. Through modification and extension of Young’s model, our study delivers the know-how for hospitality managers and owners by presenting good practices concerning Human Capital management. Implementing such practices enables businesses to navigate through crises more effectively, maintaining service quality and customer satisfaction while also laying a foundation for sustainable growth and competitive advantage in the post-crisis environment. Our findings advocate for a shift in perspective among hospitality leaders, viewing HC not as a mere operational expense but as a critical strategic asset that can drive recovery, resilience, and long-term success.

The study, while offering valuable insights into the strategic role of HC in hospitality during crises, acknowledges several limitations. Firstly, it primarily relies on the experiences of owners and managers without incorporating the perspectives of employees, which could provide a more comprehensive understanding of HC practices. Secondly, the research is contextualized within the COVID-19 pandemic in its crisis event and only the beginning of post-crisis phases, presenting a particular scenario that may not fully translate to other crises. Additionally, the sample size is relatively small and geographically limited to businesses in cities in Northern Poland, potentially affecting the universality of the findings. Lastly, the qualitative nature of the study introduces the possibility of bias.

Future research could explore a broader perspective on Crisis Management within the hospitality sector by incorporating employees’ views, alongside those of owners and managers, to offer a more holistic understanding of HC dynamics during crises. Additionally, investigating responses to different types of crises and their further phases could provide deeper insights into the HC Crisis Management model proposed in this study across various contexts. Expanding the research sample to include a wider and different geographical area and a larger number of businesses, including other kinds of hospitality businesses, would enhance the generalizability and robustness of the results. Furthermore, future studies might employ a mixed-methods approach to complement qualitative insights with quantitative data, reducing potential biases and offering a more nuanced understanding of Human Capital’s impact on organizational resilience and performance during crises.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iDs

Jagoda Goll

Krzysztof Zieba

Research sample

Restaurants	Type	Interviewee	Time of the interview	Amount of obtained data [words]
A	Fine-dining	Manager	68 minutes	4927
B	Fine-dining	Manager	32 minutes	3300
C	Fine-dining	Owner	58 minutes	5872
D	Fine-dining	Owner	50 minutes	6801
E	With specific cuisine	Owner	37 minutes	5153
F	With specific cuisine	Owner	33 minutes	4945
G	With specific cuisine	Manager	28 minutes	3001
H	“Home kitchen”	Owner	35 minutes	5085
I	“Home kitchen”	Manager	24 minutes	2806
J	Based on regional products	Manager	30 minutes	3065
K	Canteen	Co-owner	47 minutes	7102
L	Canteen	Brand manager	57 minutes	4164

Author Biographies

Jagoda Goll, MSc International Management, PhD Candidate in Gdansk University of Technology. Her scientific interests concern hospitality management, especially restaurants. Her PhD research plan is dedicated to sustainable technology adoption within the restaurant part of hospitality industry.

Krzysztof Zieba works as a professor for the Department of Entrepreneurship, at Faculty of Management and Economics on Gdansk University of Technology. His major scientific interests include nascent entrepreneurship, family business, as well as small and medium size enterprises.

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