Impact of Foreign Employee Recruitment Strategy on Financial Performance of Hotels and Lodges in Meru District Council, Tanzania

The performance of hotels and lodges in Tanzania is heavily influenced by strategic human resource practices, particularly the recruitment of foreign employees whose expertise can enhance operational efficiency and profitability. However, the exact financial impact of foreign employee recruitment and the moderating role of labour and immigration laws within the hospitality sector of Meru District Council have remained empirically understudied. Grounded in the Resource-Based View (RBV) and Institutional Theory, this quantitative study evaluated the effect of foreign employee recruitment on net profit margin (NPM) and operating profit margin (OPM), while assessing the role of governing legal frameworks. Structured questionnaire data were gathered from 72 finance managers and hotel/lodge managers (a 92% response rate from a sampled 78 establishments) across treatment (with foreign employees) and control (without foreign employees) groups. Statistical analysis conducted via SPSS using independent samples t-tests and Pearson correlation revealed that establishments employing foreign staff achieved significantly higher NPM (Mean = 3.14, Standard Deviation = 0.43) and OPM (Mean = 3.10, Standard Deviation = 0.44) compared to those without (Mean = 1.94, Standard Deviation = 0.21 and Mean = 1.98, Standard Deviation = 0.25, respectively; p < .001). Furthermore, adherence to clear, supportive labour and immigration laws significantly moderated financial outcomes by reducing administrative overhead, training costs, and compliance penalties (p < .001). The study concludes that recruiting skilled foreign personnel alongside navigating supportive legal regulations substantially drives hospitality profitability, offering concrete guidance for hotel managers, investors, and policymakers.

Foreign employee recruitment, financial performance, Net Profit Margin

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