How Employee Referral Bonus Programs Can Help Your Hotel Business
By Megan Schuyler Director of Strategic Accounts, Adecco Staffing USA | June 25, 2017
Traditionally, the hospitality industry has been prone to high employee turnover. In fact, according to the U.S. Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover report, in February 2017 the accommodations and foodservice industry experienced 6.2 percent employee separation -- meaning quits, layoffs and discharges, and other separations from their employer -- a rate much higher than the overall average of 3.5 percent experienced across all industries. Each of these separations can cost a company, on average, $6,000. According to Adecco Staffing's turnover calculator, when looking at national averages, this means it can cost a company upwards of $18,600 - $43,800 to replace 50 employees being paid between $10.50 - $14.00 per hour.
By nature of the hotel industry, it can be challenging to find and keep talent. There are many overnight and hourly positions to fill, both year-round and during peak travel season. However, when considering the high rate of turnover and the high cost of that turnover, it is apparent that hotels should, not only develop a solid pipeline of candidates, but fill that pipeline with the potential employees who fit into the organization.
As the war for talent continues, hotels and other business must get more creative in their recruiting and retention efforts. According to a recent Adecco study, 37 percent of Best-in-Class employers -or those with low turnover rates, sizable revenue growth and annual decreases in time to hire- are using Employee Referral Bonus Programs as part of their recruiting practices.
These programs continue to gain popularity in part because they are a low-risk solution that can be tailored to fit the needs and budgets of companies across a range of geographies and sizes. A chain hotel or independent boutique, for example, can customize and scale their program to fit their needs. Such programs can be an effective way to overcome the challenges of finding candidates with specific skill sets and quickly ramping up seasonal hiring.
Benefits of Employee Referral Bonus Programs
Employee Referral Bonus Programs can help hotel businesses not only find and attract best fit talent, but also retain top performers and improve employee morale.