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BSN550 – ASSESSMENT 2
SYSTEM DYNAMICS MAPPING – WORKER EXPLOITATION IN THE HOTEL INDUSTRY
Student Number –
Word Count – 1646
Submission Date – 25th September 2022 (48 Hour extension approved)
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Introduction
The global hotel industry is a people-based industry employing 330 million people per year
worldwide (iom.org). The market maintains growth across leisure and business travel
throughout developed and developing nations, operating under a complex interaction of
many market players. Due to scale, vulnerability, and lack of transparency in the labour
market, hotels are at high risk of modern slavery (Anscombe, 2019). This essay will analyse
relationships between market factors and key actors from a system thinking perspective to
demonstrate modern slavery as a by-product of the industry.
Modern Slavery can be described when an individual, against their will, provide a service or
labour through force, coercion, or fraud. Human trafficking, forced labour, slavery and
servitude are all factors of modern slavery (IHG 2019). Failure to mitigate human rights issues
in the supply chain can result in failure to meet national/international regulations, fines,
reputational risk, loss of commercial opportunities and investment
(sustainablehospitalityalliance.org).
Overview of Systems thinking
A Systems Map
A system is an entity made up of parts; stakeholders, actors, and market interventions
(factors). Systems demonstrate the interaction and interrelatedness of parts forming a
complex whole (Kim, 2000). Systems thinking is a universal approach to identify and analyse
different parts of a system for growth or problem solving. System archetypes can be identified
to ‘fix a fail’ in a reinforcing loop. Any attempts to adjust one area will have a flow on effect
through the loop (Kordova, 2018). Analysis of actors, stakeholders and a PESTLE analysis can
be seen in Appendix 5 & 6.
A system perspective helps oversee the system operation and gaps of concern to assist
decision making. Archetypes and causal loops indicate balance or reinforce growth or resolve
an issue within the system, a leverage point and thus identify problems to ‘reframe’ from a
different perspective (Kim, 2000).
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A systems map enables a visual analysis of different elements interacting in a dynamic
network. By altering actors or factors, the system will shift. The complex system demonstrates
how interdependent factors determine outcomes of other factors (Arnold, 2015). By gaining
great insight into the organisation, the dynamics of the system will show cyclical interactions
thus forming archetypes based on patterns of behaviour (Kim, 2000). Modern Slavery is
perpetuated by key players within the labour market. Contract, Migrant and Vulnerable
workers show weakness to exploitation. By using a systems perspective, we can identify
potential leverage points to drive change and restructure.
Many subsections allow modern slavery to be transparent to both the organisation and the
consumer. A causal loop diagram aims at identifying reinforcing issues that may be occurring
whilst identifying system breakers (Melville, 2014). A system analysis allows further
understanding of unintentional and deliberate exploitation of vulnerable workers due to
factors. Identified ‘fixes’ can be adjusted to break the cycle (Arnold, 2015).
This system map (Appendix 1) will focus on worker pressure and exploitation within the hotel
industry. It is worth noting that hotels are impacted through human trafficking/sexual
exploitation of perceived ‘guests’ as well as supply chain complexities, highlighting further,
concerns of modern slavery within the industry (IHG, 2019).
System Analysis of Worker Exploitation –
Profit, Competition and Globalisation
Consumer Demand is central to the system, causing upward pressure on growth, competition,
and seasonal tourism peaks. Brands push for greater market share and higher profit earnings
(ACSI, 2019). Appendix 1 shows this reinforcing loop (R1) that increase profit leads to greater
competition and increase demand for cheap labour.
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Exploitation occurs when brands want to increase profit further by reducing variable labour
and operating costs by lowering wages, whilst retaining profit, thus slavery being transparent
to the consumer as effect of lower operating costs are not passed onto consumer (Minderoo
Foundation, 2019). Temporary and vulnerable workers also fill the gap during seasonal
sensitivities (Irwin, 2021).
Globalisation allows transnational trade of labour. The availability of cheap migrant labour
attracts companies seeking cost minimisation (ACSI, 2019). Increasing multinational
companies and franchisees, R3 (Appendix 1) reinforces the archetype between consumer
demand and worker-exploitation. Slavery flourishes when people are removed from social
and economic development and rule of law (ethicaltrade.org).
Globalisation and seasonal demand are faced with growth paired with a limited labour supply.
The pool of talent within developing countries is driven by vulnerable low-skilled workers that
migrate from other countries looking for stable employment (Kotecha, 2020). Within growth
corridors, government often has poor control and regulation, allowing exploitation as
employment laws are hard to enforce. Thus, workers exposed to long hours, poor working
conditions and often debt bondage to recruitment fees (Thomson, 2022).
Fast paced growth promotes a casualisation of labour and franchise agreements often
stipulate less about worker conditions (Kotecha, 2020). Exploitative practice to reduce labour
costs facilitate a pathway to slavery. With many different business models, companies have
less control over employment practice of individual properties and supply chains (Lea, 2018).
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Migrant and Vulnerable Workers
Outsourcing Labour Hire
Labour sensitivity occurs as low barriers to entry are attractive and accessible to vulnerable
populations due to the low-skill level required. Base skilled workers and migrant workers
often have low socio-economic status, limited education, and culturally linguistic diverse
backgrounds (ACSI, 2019). Underpayment (below minimum wage), withholding of wages and
excessive working hours are common. The by-product of this marginalised population is lack
of reporting. Without clear accessible avenues for raising grievance, the cycle will continue
and worsen. Roles available are not protected by company or unions (Kotecha, 2020).
Linkages are clearly identified between migrant and vulnerable workers and how they interact
with their employer creating modern slavery risks. Specifically, exploitation through
outsourcing labour to external organisations. Whilst increasing operating efficiency, hidden
work contributes to poor working conditions, demeaning roles, or non-payment with
fraudulent contracting by third parties (ACSI 2019).
Outsourcing labour, as seen by archetype R2 (Appendix 1-3), focus on hiring low-skilled
workers from vulnerable migrant workforces. Poorly governed, unethical and follow unfair
recruitment practices enable a workplace culture to exploitation. Recruitment fees charged
to the employee should be prohibited, however, research shows that only 8% have prohibited
fees (business-humanrights.org). These fees, when paired with a lower than minimum wage,
become difficult to repay and lock workers into a debt-bondage cycle. Outsourcing labour
fails to address risks in direct operation and lack effort to protect against exploitation with
poor workers’ rights. Contracts often also include coercion and restrictions on movement
(ACSI, 2019).
Failing to address outsourced labour the consequence of the reinforcing loop would be
greater exploitation. Supporting all human rights of workers is essential for the integrity of
the industry and mitigating the risk of slavery. To ‘fix’ the fail, education of workers is
necessary to increase transparency, improve regulation and enforcement of codes.
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Labour Supply – Archetype R3
The effects of COVID-19 are still being felt throughout the industry and labour supply. Largely
caused by many workers changing industry during restriction and border closures and migrant
workers moving away (Thomson, 2022). Hotels are trying to gain back consumers, regain
profitability and decrease substantial debt sustained during closures. Labour supply is being
lured back however, unpaid overtime to base-skilled workers and low wages cycles back to
worker exploitation and hence modern slavery (Minderoo, 2019).
COVID-19 had a very specific impact on the hotel industry. Demand ceased and labour supply
shrunk through redundancy and staff minimisation. Migrant workers with recruitment
contracts suffered from ties to the third party (Thomson, 2022). This specific factor had a huge
effect on the poverty cycle. Debt bondage, loss of income, requirements to fill staff gaps all
perpetuated the poverty and debt cycles (Appendix 4). With consumer travel increasing, the
cycle will hopefully reverse.
The resurgence in travel has pressured brands to expedite training and oversight of new
employees to have staff ready to serve. The system archetype is evident between a vulnerable
workforce, worker exploitation and forced labour. Applying leverage at a government and
corporate level through regulation and education, exploitation can be stemmed. The
introduction of a modern slavery statement for large organisations and a push from nongovernment organisation for greater control of visa regulation of migrant workers will
continue to slow exploitation (ShivaFoundation.org). Current statistics demonstrate not
enough is changing through use of the modern statement alone (businesshrcentre.org).
The crossover of factors demonstrates the interrelatedness of the system (Kim 2000). It is
rare that one factor alone impacts actors. Government, corporate and visa regulation provide
stability and rules as well as support from non-government agencies. Without a systems
model identifying the issue, slavery can go unnoticed. Brands are often reluctant to raise the
issue due to market perception and potential of lost clients (Anscombe, 2019). With many
moving parts, slavery is often hidden from the consumer. Consumer awareness can help stem
the problem.
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A systems perspective identified that factors of consumer demand, globalisation, labour
supply and outsourcing can lead to worker exploitation. Leverage can be applied at a
government level as well as a brands level to change the workings of the system. No leverage
or intervention would continue to reinforce growth but also worker exploitation. Adding a
leverage point to the system will change the flow of the system, however, it must be realised,
that subsequent consequences will occur throughout the complex system also (Goodman,
2000).
Conclusion
System thinking allows for a detailed understanding of the factors that pressure the hotel
industry towards worker exploitation and modern slavery. Through identifying actors and key
stakeholders, linkages and archetypes allow the observation of effects and consequences of
certain factors leverage points can be identified to try and alleviate the issue modern slavery
(Kim, 2000).
Once modern slavery is identified, it is important to implement a ‘fix’ to the system. Hotel
Slavery is largely transparent. If you don’t look, you don’t see it and therefore nothing to fix
(Orrick, 2019). A system diagram identifies the issue, allows a leverage to recommend change
and thus breaking a vicious cycle. The treatment of human rights shouldn’t be less important
than business profitability and success.
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APPENDIX 2
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APPENDIX 3 – OUTSOURCED LABOUR
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APPENDIX 4
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Appendix 5 – Stakeholder analysis for modern slavery

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Appendix 7- PESTLE ANALYSIS

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