According to the Bureau of Labor Statistics, the hospitality industry’s turnover is over 70%. Because of the high turnover rates, hotels are forced to spend much more than any other sector on hiring and training new employees…and more often. For example, The Society for Human Resource Management (SHRM) conducted a study that estimated replacing an employee can cost 50-60% of that employees salary, with overall costs anywhere between 90-200%. The first step in combating the war on turnover, hotels must explore the actual reasons why their employees leave.
Often times, hotel jobs provide temporary employment, especially with younger generations either starting their career or students working while pursuing another career path. Many hotel jobs are also easily replaceable. If an employee is dissatisfied, it is much easier to find a similar job within the industry, this being especially true with entry-level positions that do not carry as many benefits as higher paying positions.
Another reason for higher turnover in the hotel industry is turnover contagion. In other words, quitting can become contagious throughout a workforce. If one person is dissatisfied, often times an emotional response between employees can be the cause of other co-workers to jump ship. Using a more data-driven approach to analyze departments, roles, regions, and teams can be helpful in determining the source quickly and curbing the effects of rapid turnover cycles.
It is important for hotel managers to consistently be aware of their employee turnover and the reasons that cause it. Once these are identified then working to fix the issue can begin. But where do managers start?
Step One: Acknowledge That People Leave
First, it’s important to recognize that people leave. If managers are more aware of the types of employees that leave more often (such as student or entry-level workers) then they can become more prepared and develop better hiring processes. Conducting exit interviews is also a great way to diagnose employee issues to aid in enhancing employee retention practices.
Step Two: Offer Flexibility
Because of the wide variety of jobs and the 24/7 hustle, the hotel industry is starting to adapt to more flexible work practices. Offering flexible working hours can greatly contribute to employee motivation and loyalty making work-life balance easier and more manageable. This often results in higher retention rates and greater savings on recruitment and training costs.
Step Three: Encourage a More Positive Environment
Organizations that invest in improving their internal communications, company culture, and management styles often reap the benefits of higher employee retention rates. Offering a collaborative management approach gives employees more autonomy and promotes a more laid back work environment. Companies that increases employee engagement and motivation through communication and culture build trust and satisfaction which greatly improve employee retention rates.
Step Four: Provide Growth Opportunities
Having a lack of employee career growth and advancement opportunities can play a large role in a business’s turnover. Hotels that offer cross-training programs, career advancement opportunities, and tuition reimbursement programs can greatly increase the the longevity of their employees. In addition, providing these opportunities will create more passionate and long-term professionals, providing to the future success of businesses.
College Gateway for America works with hotels to greatly reduce employee turnover by providing employees with a debt-free degree while working. CFGA encourages and guides hotel employees to obtain the skills needed for better performance and provides more long-term growth opportunities. Contact us for more information about this program.