Employee Turnover is a Hospitality Industry Problem: Here's 5 Ways to Fix It

The hospitality industry is growing. That’s the good news. Now for the bad news: employee turnover continues to be a problem within the industry. According to a Deloitte Hospitality report, the average hotelier spends 33 percent of revenues on labor costs alone. In the U.S., the average employee turnover is 31 percent, while it ticks up to 34 percent in the UK.

Employee turnover can cost you in a myriad of ways, including pre-departure costs, recruitment, selection, onboarding and training, and loss of productivity. Plus, all that turnover can be a killer of your company culture.According to a report by the Cornell Center for Hospitality Research Studies, co-workers’ attitudes over time play a large role in whether a person leaves or stays with the organization.

The “contagion effect” is when the overall attitude in an organization becomes impossible to ignore. If you have a negative workforce and a negative company culture, it can be impossible for even the most sunny individual to withstand the pressure. But there is good news: the contagion effect also works positively, and great company culture fosters employee engagement and morale.

You need to improve your company culture and retention to keep workers happy and help your bottom line. Here are five ways to fix hospitality turnover:

Hire better with new technology

Since recruiting, onboarding and training account for the largest turnover cost, it’s time to adjust your hiring strategies. You need to find better people who will fit into your company culture and therefore be more likely to stick around, all without breaking the bank.

Some cost-effective sourcing methods gaining traction through new technology include social recruiting, employee referrals, and video interviewing. These methods allow you to understand the personality and even the work ethic of potential employees.

Through social media, you can build relationships with candidates, store them in your talent pipeline, and wait until the perfect opportunity. Employee referrals can lead to better fitting hires, since your current employee understands the company needs and the potential fit of the referred candidate. And video interviewing can help you breeze through a high volume of candidates without losing the personal connection you need to hire the best.

For instance, in a one-way video interview, candidates answer your questions on video, which you can then view at any time. You retain a personal feel for the candidate, while research from the Aberdeen Group shows you can watch 10 of these interviews in the time it takes to perform just one phone screen.

Educate your employees

The onboarding process is the time to educate your employees before sending them out into the wilds of your company. Use this opportunity to outline organizational goals and values. It’s important to ensure these messages are ingrained in their performance, so everyone is kept on track. It’s also important to focus on continuing education, since such professional development opportunities can keep employees feeling refreshed and ready to tackle new challenges.

Be a mentor

Most employees want mentorship, and they want management to take an interest. Meet with employees often, discuss their performance, share advice, and help keep your workforce on track. If employees are having a tough time at work, it’s important to be aware of the issue and take steps to address it.

You need to stop problems as they are occurring, instead of down the road when it’s too late. Use real-time feedback and foster open communication, so employees feel comfortable coming to you with issues and concerns. When they have someone on their side, particularly someone in a leadership position, they’ll be less likely to act out or leave due to unhappiness.

Incentivize extra efforts

A recent Gallup poll showed 70 percent of workers are currently disengaged on the job. This is probably because many of your employees feel their efforts are not being recognized or appreciated.

When employees work hard or go above and beyond, they should be incentivized for their efforts. These incentives can take many forms, including social recognition, bonuses, gift cards, a prime parking space, and more flexible working options. This can boost engagement, give them motivation to perform well, and make them feel appreciated as part of the team.

Understand when it’s you, not them

It’s easy to point the finger at employees, but is your turnover problem actually closer to home? Leadership may also be a contributing factor to your high employee turnover rate. If your leadership style, ability to assign tasks, or how you interact with teams is causing issues, you need to change things up.

Since less than one-third of employees felt their organization would be willing to change practices based on feedback, show them your company is different. The best way to address problems and change in valuable ways is to turn to your employees for valuable feedback on how to be better.

Employee turnover is a huge problem in the hospitality industry, but it doesn’t have to be. If you adopt better practices and hire right from the start, you can improve your company culture and keep your best people around for years to come.

What are some tips you have for improving retention? Share in the comments!

Josh Tolan is the CEO of Spark Hire, a video interview solution used by more than 2,000 companies across the globe. Learn more about using video interviewing for hospitality hiring and connect with Spark Hire on Facebook and Twitter.


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