5 Key strategies to prevent employee turnover in the hospitality industry

Posted on 11/02/2019 by Lukas James

The UK hospitality industry has a staff retention rate of 70% and in the US only 73.8% of employees at any given time will still be working for the same employer 12 months later. These are alarming figures, but of more concern is the direct financial costs of the hiring and training process. In the USA, the average cost for hiring and retraining is an average of $5,864 per employee according to a study by Cornell University’s School of Hospitality Management. That means that staff turnover costs an organization with 250 people is more than $1 million per year!

So, why is this happening?

Whilst some employee turnover is inevitable, in many cases, employees transition to similar roles within the same industry, suggesting that whilst staff attrition is an industry wide problem, companies can improve their systems and processes to limit this turnover. With this in mind, we explore some strategies to help increase staff retention and get the best out of the workforce.   

Get it right from the beginning

The path to any employment begins at the interview stage and careful screening and selection of applicants is a key step in ensuring longer term fit between applicant and the organization.

Applicants that show a history of switching roles should be treated with caution and any references should be carefully checked. A rigorous interview process can unveil a lot about the applicant and determine whether they are an appropriate fit.

The process of hiring an employee is an important step but once they are employed, an effective onboarding process is critical. A study by The Society for Human Resource Management (SHRM) indicated that more than 69% of employees are more likely to stay at their newly joined company for at least three years if they receive a great onboarding experience.

When your employees have a clear understanding of what they are supposed to be doing and where they fit in, it can avoid a lot of ‘friction’ points that can typically characterize the process of starting in a new role.

Use benefits to incentivise long term employment

When it comes to attracting and retaining staff, benefits matter. 55% of employees in the United States rated them as an important reason to stay with their employer according to a study by WIllis Towers Watson.

Retirement benefits are important for all employees but are especially effective at retaining older employees, who more often perform complex, higher value jobs. The cost of replacement of these staff members is higher than lower level employees that perform more basic tasks so having a workforce that knows they are looked after into the future is an important step in ensuring ongoing loyalty.

Whilst knowing that their employer has their future in mind, employees also also need to know their immediate needs are met. A robust healthcare plan can provide this security and can limit the costs associated from medical related leave and illness.

Create a desirable company culture

A strong company culture that encourages and rewards its employees is not only becoming a critical vehicle to attracting the best staff, but it is the best way to keep staff once you have them. There a few ways to build a positive company culture that respects and rewards its workers.

Professional Development

Investing in your staff is a clear way of demonstrating to employees that they are valued and has the added benefit of creating a more skilled workforce that can take care of higher level tasks.

Marriott provides a clear example of a hospitality company using professional development as part of its human resources strategy. The organization provides a range of training and development programs for all levels of employees with a focus on broadening employee expertise and developing role-specific skills. By upskilling employees, the organization benefits from having a pool of well-trained employees that can fill management roles.

Workplace Relations

Co-worker relationships directly impact the turnover and retention in an establishment and creating a safe and inclusive environment greatly enhances worker satisfaction.

Like it or not, the nature of hotel work means that individuals need to work closely together. For younger employees, working together provides a valued social element to the work and this social aspect can be a strong motivating factor as to why staff stay within a role. Conversely, the interactive nature of hotel and hospitality work means that individuals are unable to avoid spending time with people they dislike.

Fostering a strong, collaborative work environment from the top down is an important means to maintaining staff loyalty and ensuring valued staff do not leave their roles. Weaving light humour and keeping a breezy atmosphere translates multifold in staff retention.

Recognition counts

The need to feel valued is a basic human need and when people feel like their work is valued they will want to perform to their full potential. One of the strongest ways to foster a sense of importance in staff is recognizing when work is done well. This can be achieved with employee of the month awards, public recognition for work well done or celebration of important milestones and targets being achieved.

Flexibility is not just for yoga

Flexibility in working arrangements is becoming increasingly important in today’s modern hospitality workforce and and nowhere is this more important than in the housekeeping department. As many hoteliers can attest, this area is one of the most onerous so having some flexibility can go a long way towards creating an environment that values its workers.

When balancing a work/home balance, working rigid hours from 8am until 4pm is not achievable for all staff so if employees are unable to work those hours, allow them to start earlier or later. The odds are it won’t affect hotel operations and they’ll be more likely to have loyalty to a company that recognizes their individual needs. Because if one hotel doesn’t, the next may.

Develop strong leaders

It has been said that people don’t leave jobs, they leave managers and there are few industries where this is more true than in hospitality. A study by Gallup found that 75% of the reasons for voluntary employee turnover can be influenced by managers.

Through developing quality managers, businesses can prevent high turnover rates. One of the best ways to is to foster an environment that values and rewards feedback from its staff members. A simple anonymous survey of employees about their manager can reveal a lot. Whilst employees can have grievances with management, consistent negative feedback can indicate a problem in management style that can lead to high employee turnover rates.

Hospitality companies benefit from programs which promote good management practices. Effective managers know how to delegate effectively, recognize employee achievements and clearly communicate expectations. Indeed, focusing on developing quality leaders that can uplift and inspire could be one of the most effective employee retention strategies in the hospitality industry.

Photo by Val Vesa


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