The Wave of Turnover is Coming

By Sherri Merbach Managing Director, C-Suite Analytics | June 26, 2011

If history repeats itself, your employee turnover is about to shoot up. This has been true during the recovery periods after each recession in the past 20 years, and it makes sense that workers who have slowed their urges to change jobs now have pent-up drives to do so. More importantly, those who survived the great recession by “doing more with less”, which is another phrase for working their tails off, are ready for a scenery change. This is especially true if they feel unappreciated or work for a manager who they don’t trust. Various studies indicate anywhere between 50% and 90% of workers plan to change.

Added to this news is undeniable data that your best workers can find another job anytime. Looking back to the depths of the recession, voluntary quits fell just 11%. Or said another way, your chances of losing a worker you wanted to keep was a full 89% as it was when the economy was strong. Another study indicates that voluntary quits went up rather than down after layoffs.

So ask yourself: Who is held accountable for undesirable turnover? What are the consequences of unacceptable turnover? Who provides recognition, training, and coaching on turnover? When was the last time an employee said “I’ve got a jerk for a boss but am staying here for the company picnic?” Does your company solve retention with processes driven from the top or with programs driven by HR?

If you are ready to tackle your turnover challenge, continue reading to learn the “secret sauce” - three key solutions that will help you solve this problem. Specific actions and tactics are included for implementation. After these solutions the precise role that HR should play is detailed out as well as the critical role that leaders play.

Drive retention from the top is the first solution. Executives have the greatest impact on achieving retention goals. Executives must direct this initiative by positioning retention as one of their top five priorities. Think about how your company manages sales, service, quality, and safety and then build those same methods for retention. This means holding leaders of every department accountable for their retention and leveraging HR to support them with redesigning processes and training from initial hiring processes to leadership skill-building.

Next solution is to build momentum with data. Only 33% of U.S. organizations place a cost on employee turnover, and this number decreases to 18% around the world. Consider that if 80%+ of your competitors are “old school” on retention, how much of a competitive advantage is available to you by going “new school” by establishing and enforcing retention goals? Ideally, collect and report on who quit, when they quit, and whom they worked for. A 20,000 employee insurance company created this reporting in their HRMS system and found that turnover happens disproportionately across the company and is concentrated among a few supervisors.

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Guest Service: Empowering People

Excellent customer service is vitally important in all businesses but it is especially important for hotels where customer service is the lifeblood of the business. Outstanding customer service is essential in creating new customers, retaining existing customers, and cultivating referrals for future customers. Employees who meet and exceed guest expectations are critical to a hotel's success, and it begins with the hiring process. It is imperative for HR personnel to screen for and hire people who inherently possess customer-friendly traits - empathy, warmth and conscientiousness - which allow them to serve guests naturally and authentically. Trait-based hiring means considering more than just a candidate's technical skills and background; it means looking for and selecting employees who naturally desire to take care of people, who derive satisfaction and pleasure from fulfilling guests' needs, and who don't consider customer service to be a chore. Without the presence of these specific traits and attributes, it is difficult for an employee to provide genuine hospitality. Once that kind of employee has been hired, it is necessary to empower them. Some forward-thinking hotels empower their employees to proactively fix customer problems without having to wait for management approval. This employee empowerment—the permission to be creative, and even having the authority to spend money on a customer's behalf - is a resourceful way to resolve guest problems quickly and efficiently. When management places their faith in an employee's good judgment, it inspires a sense of trust and provides a sense of higher purpose beyond a simple paycheck. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.