Why Employees Stay at Your Hotel
By JoAnne Kruse Founder, HCpartners | June 2011
Turnover and retention topics have lost their appeal with the recession, but not their relevance. Even in high turnover environments like leisure and hospitality, most employees do indeed elect to stay on average a minimum of 2.5 years, with greater tenure found in the management and professional ranks, as well as with workers over age 35.
Exploring what compels staff to stay with a company offers employers the unique opportunity to understand what is actually working well. A review of retention and turnover drivers provides further insight as to what existing programs - or investment in new ones - are likely to drive a better return on investment and retention of the right employees.
The Great Recession has contributed to a quick change in the talent arena from one that is candidate-driven to an employer's "buyer's market". With a sluggish global economy ahead of us, why should anyone be concerned with turnover? The answer is simple: whether we are in a good or a poor economy, it costs a lot of money to replace personnel. Even when the labor market is soft and the candidate pool is plentiful, it still is expensive to recruit, train and manage new hires, with cost estimates ranging from 30% to as high as 200% per hire(2). Perhaps more important is the impact of turnover on quality and consistency of customer service due to the poor motivation of job leavers, and the lack of job knowledge by new additions.
It comes as no surprise to anyone in the industry that turnover is a systemic challenge. Studies have shown that the average turnover level for line hotel employees in the US ranges from 60%, up to 300%, according to research conducted by the American Hotel and Motel Association(3). There have been many studies as to the reasons for turnover, but for industry professionals suffering through tighter than usual budgets, perhaps the question we should be asking is what is working right to retain employees?
As field practitioners, understanding what factors are effectively keeping employees, other than a poor economy and limited prospects, may be an easier approach to driving retention than reactively assessing why people have left. Exit interviews are helpful, but this is a discussion with someone who has made the decision to leave, not with someone who remains actively engaged and contributing. Getting to these employees, and understanding their motivation, provides information useful in making decisions about current and future people investments.
When we look at what keeps employees at a company, regardless of other opportunities at greater pay, we find that good employment conditions, positive views about working in the business, and realistic opportunities for advancement seem to be the most common drivers(4). Perhaps a short cut for hotel executives is to take a closer look at these areas within their own operations, assess effectiveness, and more effectively market and engage employees to increase retention. Likewise, as budgets remain tight and prioritization of spend key to sustainability, understanding employee priorities and what they value most about current programs really matters.