An investigation of the impact of internal labour markets in the hotel industry

Maintaining a stable and competitive workforce is a key element of the role of management, and there has emerged a barrage of ‘recipes’ to achieve this. All too frequently, however, these new concepts replace the old, with little justification other than being innovative. This article investigates the concept of an internal labour market [ILM] as a strategic management tool. Past studies by labour market researchers have confirmed the value of the components of an ILM, yet none has investigated the concept of an ILM as a coherent whole. This paper investigates the impact of the components of an ILM – training, promotional opportunity and job security – on the key employee attitudes of job satisfaction, organisational commitment and employee intention to leave. It then examines the impact of this concept as a single variable on the employee attitudes. The study is conducted in the service industry, in particular, the hotel sector, and examines the responses of 297 non-supervisory hotel employees. The findings suggest that the use of a holistic ILM strategy could provide a new means for management to retain and develop a stable and satisfied workforce.