Labour shortage problem is a major problem that the Hotel management hopes to solve by outsourcing. The tourism industry is a rapidly growing industry. This rapid growth however is not met by the needed human resources and there is an employee shortage (Breakey, & Craig-Smith, 2008). As Richardson (2009) argues with a primary research, students in Australian institutions believe that the hospitality industry might not be able to meet their career goals for the future. This is one reason that students prefer to work with agencies that have outsourced job requirements. This has created a direct to hire labour shortage problem where hotels are seen to subcontract to agencies for their resources.
A HRM function is needed in organizations, as the HRM will ensure that employees are working to the best of their knowledge in order to fulfill the strategic objectives of the organization. The traditional HRM function would have ensured that the employees are satisfied in their workplace, and will provide or recommend for the necessary training programs for the staff in order to improve their proficiency and their productivity. However Australian hospitality industry is seen to have a high labour turnover where there are employee loss in the industry ranging anywhere from 30% and 80% (Davidson, Timo, & Wang, 2010). This happened while HRM practices and strategy were still being practiced in the traditional way. HRM practices of the mid 1970s to the late 1990s were seen to be based on the concept of excellence theories that proposed how workplace excellence could be created by means of focusing on the quality management improvement. Total quality management and motivation theories that brought employees into the strategic loop of the organization, satisfying customers, especially in the context of front line service where first contact with customer was made were seen to be significant issues for the hospitality industry (Davidson et al, 2011). However, in current times the issues for the hospitality industry has changed and so has the trends.