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Brace Yourself for Turnover - People are GOING to Leave you!

The economy is strengthening – the signs are everywhere. 1st quarter profits in all segments of hospitality are up and some are way up.

With increased business volume comes the hiring crunch. If you have been following my blogs you will know that I have been trying to prepare companies for this “next” step of the economic recovery for a while. Trying to get them to take care of the people they have in house, get the training in, get the cross training in – prepare them to grow.

Well, here we are – at a growth stage. Are your people ready to be promoted? Did you take the past year of “down time” to cross train, educate and prepare your current stars for growth? Or did you decide to run lean, not hire, not incur and extra labour costs and work them to the bone? If you did the latter I am afraid to tell you – you are in trouble!

Yes the economy has been slow but that does not mean that people are not burnt out. If you got rid of staff that didn’t perform and put a lot or responsibility squarely on the shoulders of your top performers, they might be over worked, under paid and burnt out. As I have been warning, 50% of you staff and managers are just waiting for the economy to strengthen so they can leave you and work for someone they feel is a better employer. If you staff are showing sign of fatigue, frustration or just being ill tempered – you can expect a big turnover.

Here is a question for you. What costs more carrying a few extra % on labour over lean times or training a staff that is 50% new in times of growth when you should be putting your best foot forward? Just a reminder here, it costs you approximately 12-18 months of wages per position to have the new person up, trained and productive enough to recoup your costs. So for a server making $10/hr that equals over $20k per!

Another thing to be concerned about is promoting within, regardless if that employee is ready. Everyone gets caught up on promoting within. We take a great employee, throw them into the deep end and then ask ourselves the question “what happened, they used to be so good?” What happened is you! The climate is perfect for this exact scenario, right now. You have staff that are great but perhaps have not been challenged in a while (in terms of managing), are maybe a little burnt out due to working on a lean staff, have not had the benefit of any extra training or education (can’t afford that in lean times) and now you are going to “throw them in the deep end.” Be careful – you will lose them!

If you haven’t done it yet – now is the time to check the temperature of your operation. Talk to the staff and LISTEN to them, don’t make excuses and see how they are doing. Truthfully you should have been doing this for the past 12 months but better late than never. You may save a few but if you haven’t taken care of your people because you were worried about the economy you are going to lose a large % of them. Get ready.

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Comment by Marsha Keeffer on May 1, 2010 at 3:11pm
Well said, Corey. This is the time for companies to invigorate their retention efforts. And for those who have been squeezing profits out of their people by conducting huge lay-offs, get ready for the pain of it coming back to bite you on the bottom. When employees can leave you, they'll stampede.

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