Enhancing the Guest Experience Through Employee Retention

By Bernard Ellis Vice President of Industry Strategy, Infor Hospitality | May 31, 2015

While many industries are notorious for employee turnover, it is particularly painful for hospitality, where guest service is such a crucial part of the product. How painful? According to the Bureau of Labor Statistics (BLS), the hospitality and leisure industry had the second largest number of employees voluntarily quit their jobs in 2014, with more than 6, 000 people choosing to leave their current position.

One might first conclude that the recovery of the industry brought many employees new opportunities to take better offers with a competitor. After all, “once hospitality is in your blood, you don’t leave, ” as so many in the industry like to say. However, a few years earlier, the downturn offered different evidence, as the opening of new gaming establishments were welcomed in many hard-hit markets, providing jobs for large numbers of employees who were new to the industry. Despite the persistence of high unemployment rates in 2011, new gaming openings still experienced relatively high turnover. Even with such limited alternatives, many employees simply discovered that hospitality was not for them. This challenge will persist the industry, as not only must hoteliers fill vacant positions left behind by job hoppers, but they must also fill new positions, given that the BLS projects a 0.9 percent annual growth rate for the hospitality and leisure industry between 2012 and 2022. The industry as a whole must determine how to improve employee retention and become more skilled in identifying who will truly enjoy working in hospitality in the first place.

Identifying the Impact of Turnover

Replacing an employee is not simply about selecting a new hire. Turnover is both costly and time consuming for hoteliers’ human resources (HR) departments. According to the Society for Human Resource Management (SHRM), direct costs to replace a member of the workforce can “reach as high as 50 to 60 percent of an employee’s annual salary, with total costs associated with turnover ranging from 90 to 200 percent of annual salary.” When considering the labor statistics cited previously, this can quickly add up to become a significant expenditure for hoteliers. If third-party recruiters or training are required each time a new position opens, this creates additional unforeseen expenses associated with onboarding a new employee. Constantly repeating the recruitment process also detracts from HR employees’ ability to promote strategic business objectives, as they must dedicate a large amount of time to screening and selecting candidates.

However, the most important way that employee turnover negatively impacts the hospitality industry is through its effect on the guest. If a hotel property is understaffed, it can cause delays in services such as maintenance repairs or housekeeping rotations. Departments may overwork existing employees or struggle to complete critical tasks because there are not enough names on the payroll. If guests do not have their needs met in a timely manner, it will significantly detract from their brand loyalty and willingness to return in the future, and could potentially deter other guests with unfavorable reviews. Additionally, tenured employees typically provide better service because they are more familiar with processes, know who to contact when an issue arises, and often recognize frequent guests. In order to optimize the guest experience, hoteliers should look to create a workforce comprised of long-term, knowledgeable employees that express dedication to the organization’s strategic business goals.

In today’s increasingly competitive market, hoteliers must question what differentiates their customer experience from another. Many properties offer a variety of accommodations and entertainment options, so why would a guest choose one hotel brand from the next? When a single negative interaction could make the difference in a guest’s brand loyalty, the importance of identifying the best and brightest job candidates becomes clear. Hoteliers across all sizes and locations share a common need to mitigate employee turnover by selecting job applicants that are most likely to be successful in a particular position.

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.